Nvidia’s recent earnings report has sent shockwaves through the supply chain, particularly impacting partners like TSMC, ASEH, KYEC, and Unimicron, as highlighted by Citi analysts in a recent note. Let’s delve into the details and implications of these revelations:
- Nvidia’s Strong Performance: The impressive 94% year-over-year revenue growth in FY3Q24, largely fueled by a staggering 112% increase in data center sales, has exceeded market expectations. The rapid success of Nvidia’s H200 GPUs as the fastest product ramp in the company’s history underscores its dominance in the sector.
- Blackwell GPU Demand: The buzz around Nvidia’s new Blackwell GPU is palpable, with CEO Jensen Huang expressing confidence in its production and distribution. With 13,000 Blackwell GPU samples already shipped in the previous quarter, including cutting-edge models like Blackwell DGX to OpenAI, Nvidia is gearing up for even greater shipments in the upcoming quarter.
- TSMC’s Growth Trajectory: As a critical Nvidia partner, TSMC stands to reap substantial rewards from the tech giant’s success. Citi projects a significant threefold increase in TSMC’s AI-related revenue in 2024, doubling into 2025, with Nvidia expected to contribute nearly 20% of TSMC’s revenue next year. Structural expansions like doubling CoWoS capacity in 2025 are indicative of TSMC’s commitment to meeting Nvidia’s escalating demands.
- Growth Opportunities for ASEH and KYEC: ASE Technology and King Yuan Electronics are not lagging behind in seizing growth opportunities. ASEH’s anticipated $1 billion revenue from CoWoS-S next year, driven by elevated average selling prices and gross margins, showcases its strategic positioning. KYEC’s expertise in high-power GPU testing positions it favorably to maintain a prominent share in Blackwell GPU final testing.
- Unimicron’s Strong Position: In the realm of HDI/ABF, Citi has a favorable view of Unimicron’s prospects. With a dominant market share in compute/switch trays for HDI and upcoming ventures in supplying ABF for cutting-edge technologies like the Blackwell GPU/Grace CPU/NVLink, Unimicron is poised for growth.
The optimistic outlook shared by Nvidia has a ripple effect on its supply chain partners, reinforcing Citi’s confidence in the performance of key players like TSMC, ASEH, KYEC, and Unimicron. The synergy between these partners and Nvidia paints a promising picture of growth and success in the tech industry.
