Nvidia's Blackwell woes revealed 'drama' between chip partners

Nvidia (NVDA) CEO Jensen Huang has said a design flaw affecting its new Blackwell artificial intelligence (AI) chip has been fixed. The chipmaker confirmed it was an issue on its end rather than its long-time foundry partner Taiwan Semiconductor Manufacturing Company (TSM). Moor Insights & Strategy founder, CEO and chief analyst Patrick Moorhead sits down with Julie Hyman and Josh Lipton on Market Domination to break down what the news means for Nvidia and the chip space.

“This one's an interesting one. If you recall, there wasn't an issue, then there was an issue, and then Nvidia came out and talked about it a little bit. I was on the show and really said, ‘Hey, regardless of what happens, unless it's a six-month or a one-year delay, they'll probably just buy the lower-performing version from Nvidia.’ And I think what this does, though, this closes the door on any potential issues that may have arisen. I mean, they already said that Blackwell sold out for the next year,” Moorhead tells Yahoo Finance.

He adds, “This is classic finger-pointing between Nvidia and TSM. It's age-old. What is interesting, though, is how that spilled over into the public dialogue. And I don't think this is a positive thing for TSMC.” Moorhead said the negative sentiment around TSMC based on the Nvidia delay and the reported US investigation into dealings with Chinese company Huawei could benefit competitors like Intel (INTC) Foundry Services. TSMC says there is no such investigation.

“It's just another chapter of the drama that goes with the chip industry," Moorhead says. He adds, "Nvidia will lose market share on a percentage basis. They're going to lose market share to AMD (AMD). They're going to lose market share likely in [2026] to Intel. And then to designs made by Broadcom (AVGO) and Marvell (MRVL) that go into the hyperscalers. But the market is growing so quickly that it won't have much of an impact on Nvidia and its stock price."

To watch more expert insights and analysis on the latest market action, check out more Market Domination here.

This post was written by Naomi Buchanan.

Video Transcript

Patrick, I wanna switch gears and ask you about the other thing we always talk to you about, which is Invidia.

Um And, uh, the Ceo Jenson Long reportedly talking about that there had been some sort of flaw in its new Blackwell chips, but they've a fault that they have now fixed.

They, he said it wasn't the fault of TS MC which actually makes the chips chips.

It was something that NVIDIA made a mistake on and then figured out, um, it got a lot of attention.

But what, what's your sort of read through?

Take away from that?

Um, as we, you know, start to hear from maybe some of Nvidia's customers that are set to report.

Yeah, this one's an interesting one.

If you recall, there wasn't an issue, then there was an issue and then NVIDIA came out, uh and, and talked about it, uh a little bit, you know, I was on the show and really said, hey, regardless of what happens, unless it's a, you know, a six month or one year delay, they'll probably just buy the lower performing version uh from NVIDIA.

And I think what this does though is I think this, you know, closes the door uh on any potential issues that that may have arise.

I mean, they already said that Blackwell is sold out for the next year.

Uh One of the, the, the overall interesting uh pieces though this classic finger pointing between NVIDIA and, and Ts MC.

It, it, it, it, it's age, it's age old.

What is interesting though is how that spilled over into the public dialogue.

And I don't, I don't think this is a positive thing for Ts MC.

And in fact, uh as TS MC is raising prices uh is talking about its customers.

Uh this, this just to be honest, I mean, it bodes well for, for intel uh Foundry services in the future and the lest we forget the investigation that Ts MC is under uh by the Department of Justice for supposedly uh selling uh Huawei uh parts that, that are used uh in its uh in its own A I Accelerators.

There's just another chapter of the drama that goes with the chip industry, Patrick, I, I'll get you out of here on this, you know, if you believe Jensen Wong and his team in the video are simply just kind of running away at this point with the highest performance A I, how do others including, you know, names that we were just talking about Qualcomm?

How do they differentiate?

Yes.

So first of all, NVIDIA will lose market share on a percentage basis.

OK.

Uh they're gonna lose market share to A MD.

They're gonna lose uh market share uh likely in 26 to Intel and then uh to designs made by Broadcom and Marvel that go into the hyper scalars.

But the market is growing so quickly that uh it won't have much of an impact on NVIDIA uh and its, and its stock price.