TMTB Morning Wrap
Good morning. QQQs +35bps and yields slightly down as all eyes on CPI in a few minutes. Let’s get straight to it…
NVDA/TSM: Various news items again this morning talking about CoWoS
TSM reports tonight and will likely help clarify this whole debate…
First up, Nomura saying reduction in CoWoS orders:
However, Ming chi kuo out this morning clarifying saying its not a demand issue, but more a product roadmap issue at TSM
Based on the new roadmap above, it’s easier to see why rumors suggest that Nvidia is slashing CoWoS-S capacity. It’s clear that Nvidia’s demand for CoWoS-S will be significantly reduced, at least for the next year or so.
The 200 series doesn’t include the previous B200A (single-die, CoWoS-S), so they don’t need CoWoS-S for it.
Starting in 1Q25, Nvidia is shifting its focus towards the 200 series while decreasing the supply of the H series (CoWoS-S). It will further reduce their demand for CoWoS-S.
While B300-based systems are slated for mass shipments in 2026, Nvidia and CSPs are currently favoring the GB300 NVL72 (CoWoS-L). Although there are B300 systems that use single-die/CoWoS-S, the GB300 NVL72 will take priority. Consequently, the demand for CoWoS-L is more urgent than that for CoWoS-S.
These shifts in the product roadmap will impact both Nvidia and its supply chain partners’ performance to varying degrees. Certain suppliers will be hit particularly hard, leading to recent significant corrections in their stock prices. However, from Nvidia’s perspective, the slowdown/cut in CoWoS-S expansion is primarily driven by the change in product roadmap rather than a downturn in demand. This change also works well with TSMC’s strategic plan to promote their CoWoS-L technology as the mainstream solution.
Jefferies also defends this morning saying there is no cut, it’s a conversion.
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