NVIDIA May Spend $10B On 5nm Wafers To Avoid A GeForce RTX 40 Series Shortage
If there is one thing the past year has taught us in terms of supply and unprecedented demand, it's that semiconductor manufacturing capacity is painfully limited. It is paramount, then, that fabless firms spend big to secure their piece of the silicon pie in anticipation of upcoming product launches. As it applies to NVIDIA, the GPU designer appears more than willing.
The hot commodity this year is 5-nanometer manufacturing capacity, and TSMC only has so much to go around. NVIDIA's interest in the 5nm node comes as it prepares its next-generation GeForce RTX 40 series powered its also next-gen Ada Lovelace GPU. Rumor has it a full-fat AD102 Ada Lovelace GPU will wield 18,432 CUDA cores, which is quite a jump from the 10,496 CUDA cores in the GeForce RTX 3090.
According to the folks at Hardware Times, NVIDIA has been increasing its investments in capacity, having sent billions of dollars to TSMC to secure 5nm capacity. Adding up all the numbers, the site pegs the total investment at around $10 billion.
That's a massive sum for sure. There have been multiple reports in the past of TSMC raising chip prices, and by quite a bit in some cases, and those will undoubtedly get passed on to customers. Fortunately, it's said those price hikes mostly applied to more mature nodes, though 5nm is more expensive to begin with, compared to 7nm and up.
TSMC is making big investments, too. During a recent earnings call, TSMC's chief financial officer Wendell Huang said the company's capital budget is expected to be between $40 billion and $44 billion, the most it has ever earmarked and a whopping 47 percent higher than last year.
"Out of the $40 billion to $44 billion CapEx for 2022, between 70 percent and 80 percent of the capital budget will be allocated for advanced process technologies, including 2-nanometer, 3-nanometer, 5-nanometer and 7-nanometer. About 10 percent will be spent for advanced packaging and mask making and 10% to 20% will be spent for specialty technologies," the CFO added.
Hopefully all these investments in capacity and wafers will mean the chip shortage will ease up by the end of the year. Related, we're also knocking on wood that the GeForce RTX 40 series will be much easier to find in stock when it launches as a result of NVIDIA's $10 billion spending, though we're not holding our breath.
One thing that could also help is Intel's entry into the discrete graphics card space. Intel is on track to ship its first Arc Alchemist GPUs this quarter in mobile (laptop) form, followed by desktop cards in the second card and workstation models in the third quarter. All combined, Intel anticipates shipping 4 million discrete GPUs this year.