You might’ve noticed that it was pretty difficult to get hold of an Nvidia GPU over the past couple of years, mainly because graphics card manufacturers struggled to keep up with demand. Now that cryptocurrencies have lost much of their value and second-hand components are flooding the market, Nvidia needs to reduce the amount of 5nm chips it’s ordered from TSMC ahead of the RTX 4000 series to avoid the opposite issue.
Although the most recent drop on the cryptocurrency rollercoaster is the main reason for Nvidia’s change of heart, it isn’t the only factor at play. Interest rates and the cost of living have skyrocketed in many countries around the world, and DigiTimes notes (via VideoCardz) that interest in general technology is declining as a result. This isn’t just gaming PCs, but TVs, mobile phones, and other gadgets, too.
In fact, Nvidia isn’t alone in its decision to revise its order. AMD has reportedly requested to cut its order of 7/6nm wafers by 20,000 after its Ryzen CPU revenue took a bit of a beating from Intel 12th gen, and a 10% decline in iPhone shipments sees Apple follow suit.
Nvidia doesn’t have it easy
Unfortunately, team green might not get away from its obligations so lightly. Nvidia already prepaid for its allocation after dropping Samsung in favour of TSMC, and won’t get its money back unless it finds replacement customers to fulfil its obligations. Instead, TSMC has offered to defer shipments to as late as Q1 next year.
Regardless of negotiations, it’s looking likely that both Nvidia, TSMC, and all other tech companies might need to embrace lower revenue projections for the rest of the year.