Nvidia's AI Chip Demand Surges Past Supply by 12 to 1
Nvidia's AI chip demand is outstripping supply by a staggering 12 to 1, according to Dan Ives, a partner and senior managing director at Yorkville Ives & Co. This means that for every one Nvidia chip available, there are 12 potential buyers.
The bottleneck in the supply chain is no longer just the design of the GPU itself, but rather the packaging and memory needed to make it usable at scale. TSMC's advanced packaging capacity, known as CoWoS, has a significant shortage, with a gap of around 10% expected by the end of 2026.
Memory is also tight, with Micron locking in pricing and volume agreements for its HBM supply through 2026. Samsung warned that memory shortages could persist through 2028, with 2027 potentially worse than 2026.
Ives argues that the AI cycle is still young, and that demand is already far above supply before robotics and factory automation absorb significant volumes. This means that capacity, not enthusiasm, is setting the ceiling for Nvidia's growth.