NVIDIA Successfully Fixed Blackwell Design Flaws with TSMC's Help, According to Jensen Huang

NVIDIA CEO Jensen Huang stated on Wednesday that the design flaws in NVIDIA's latest Blackwell AI chip have been fixed with the help of long-term partner TSMC, which previously affected production.

NVIDIA launched the Blackwell chip series in March this year, with shipments originally expected in the second quarter but were delayed. Analysts say this could impact customers such as Meta, Google parent company Alphabet, and Microsoft.

According to Huang, the Blackwell chip series had design defects that resulted in low yield rates, far from meeting the needs of mass production, forcing NVIDIA to re-improve and redesign it to meet normal commercial mass production requirements.

"We had a design flaw in Blackwell. It was functional, but the design flaw caused the yield to be low. It was 100% Nvidia's fault," he said.

He also refuted rumors of a rift between NVIDIA and TSMC, stating that TSMC remains an obvious partner, and NVIDIA is very grateful for TSMC's strong assistance in helping NVIDIA successfully fix the flaw and enable the Blackwell chip series to be mass-produced smoothly.

"In order to make a Blackwell computer work, seven different types of chips were designed from scratch and had to be ramped into production at the same time. What TSMC did, was to help us recover from that yield difficulty and resume the manufacturing of Blackwell at an incredible pace," he added.

At a recent Goldman Sachs conference, Huang said he expects the Blackwell chip to ship in the fourth quarter.

Driven by the AI boom and optimism about the Blackwell chip, NVIDIA's stock price has risen about 190% this year. Investors are currently preparing for the company's next earnings report, which will be released on November 20th.

Wall Street analysts currently generally expect NVIDIA's third-quarter revenue to grow by 83% to $33.1 billion; earnings per share are expected to reach $0.74, a year-on-year increase of 84%.

In addition, Wall Street bigwigs also expect the stock to have more room to rise and continue to raise NVIDIA's target stock price. Bank of America strategists last week raised NVIDIA's target stock price from $165 per share to $190. The bank's analysts pointed out that the artificial intelligence market will grow exponentially in the next few years, presenting a generational opportunity for NVIDIA.

Goldman Sachs estimates that Blackwell can also help NVIDIA generate billions of dollars in revenue.

"By integrating seven chips, and each playing a role in delivering higher performance at the data center level, we view the introduction and ramp of Blackwell not only as a near- and medium-term revenue growth driver but also a dynamic that extends Nvidia's competitive advantage. The ramp of Blackwell-based products remains on track with several billion dollars in revenue expected in the January quarter followed by further growth in April and beyond," the investment bank said.