The announcement of the UMC results, which we have already reported to you some time ago, appeared a very exciting event for one more reason. UMC reps also claimed that NVIDIA has significantly reduced their orders by TSMC. This way, in Q1 TSMC manufactured 140000 chips for NVIDIA while in Q3 the order made only 30000 units.

In fact, this can mean only two things: either NVIDIA decided to reduce significantly the number of chips to be manufactured this quarter or… the long-term cloudless cooperation between NVIDIA and TSMC is coming to an end. Here I would also like to add that The Inquirer also reported that NVIDIA themselves are not planning to ship fewer chips to their partners in Q3. In other words, everything signals that NVIDIA really decided to resort to other semiconductor manufacturers’ help.

Referring back to the history, we can recall that serious difficulties between TSMC and NVIDIA are not cropping up for the first time. The problem was that TSMC failed to shift to 0.13micron manufacturing technology fast enough for NVIDIA. Now the situation is simply critical. NVIDIA is going to launch its new 0.13micron NV30 graphics chip in autumn. Therefore, they may have serious problems if TSMC turns out unable to manufacture these chips in sufficient quantities. As a result, the significant reduction of orders placed with TSMC may mean exactly the fact that 0.13micron chips will be produced by someone else now.

Continuing on the matter, it seems quite logical to suppose that NVIDIA is about to move some of the orders to UMC. At least we all know that these companies have been negotiating the possible cooperation for a while now. However, let’s wait for more facts.