HOW MUCH COULD NVDA BENEFIT FROM THE RECENT TSMC CHIP BAN TO CHINA
Estimating how much more revenue NVIDIA could gain if TSMC reallocates production capacity to fulfill more NVIDIA chip orders depends on several factors. Here’s a framework to calculate potential revenue impacts:
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Key Factors to Consider
1. Current Capacity and Orders:
TSMC operates at near-full capacity, and NVIDIA is one of its largest customers, using advanced nodes (4nm, 5nm) for GPUs and AI chips like the H100.
2. Incremental Capacity Freed:
If bans reduce TSMC's Chinese orders, the freed capacity could be significant. For example:
A major client like Huawei might have consumed billions in orders, now potentially redirected to other clients like NVIDIA.
3. Demand for AI Chips:
NVIDIA's flagship AI chips, such as the H100, have extremely high demand globally.
The H100 chip costs approximately $25,000 each, and NVIDIA earns significant margins on these products.
4. NVIDIA’s Growth Potential:
If NVIDIA secures additional capacity, it could fulfill unmet demand from data centers, AI companies, and enterprises.
In fiscal 2024 (ending January 2024), NVIDIA's Data Center segment is projected to generate over $40 billion in revenue, largely driven by AI hardware.
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Scenario-Based Estimates
1. Freed Capacity Example: 10% TSMC Shift
Suppose TSMC frees up 10% of its advanced node capacity for NVIDIA.
If this equals production for 1 million extra chips annually, and NVIDIA’s average revenue per chip is $20,000:
1 million chips × $20,000 per chip = $20 billion additional revenue.
2. Modest Reallocation Example: 5% TSMC Shift
A smaller reallocation might result in 500,000 additional chips annually:
500,000 chips × $20,000 per chip = $10 billion additional revenue.
3. Full Reallocation of Lost Chinese Demand
If TSMC reallocates the entirety of its lost Chinese orders (estimated at ~$5–10 billion annually) to NVIDIA:
NVIDIA could absorb a significant portion of this, potentially adding $5–15 billion in revenue, depending on its ability to sell AI hardware in other regions.
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Conclusion
If TSMC reallocates capacity effectively, NVIDIA could potentially generate $5–20 billion in additional annual revenue, depending on the scale of reallocation and NVIDIA's ability to meet global demand. The actual outcome will depend on NVIDIA's execution and how quickly TSMC adjusts production schedules.
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I'm a 28 year old new trader 4 months exp I'm negative about 3k which is nothing.. let's go $1,000,000 this year
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SKYWalkers : it doesn't work that way.
you have to first isolate which plants are doing the chips that Nvidia has ordered, let's say 4nm, then find out what other 4nm plants are there, supplying to which clients, are there China clients being supplied, then you can calculate how much free capacity there is.
if there's no China clients, and the capacity is booked, there is no free capacity.
Prince Nvidia OP : well it's a for sure thing .... with the help of the USA banning all exports to China this will enable more future growth for nvda in the future
zgf000 SKYWalkers :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")