14 DAY TRIAL // TSMC has been having problems with its 40nm manufacturing process for quite a long time and while it has supposedly already gotten over most of the big issues, the 40nm is still not free of problems. In fact, these yield issues are part of the reason why NVIDIA did not launch Fermi sooner and also the main factor behind AMD not scoring a higher amount of DirectX 11 cards. Of course, now that most of these are history, both ADM and NVIDIA should ramp up production of 40nm-based GPUs, but the latter seems to think this will only happen in the second or third quarter of the ongoing year.
A recent report suggests that Taiwan Semiconductor Manufacturing Company is still having some problems and will only finally resolve them around the middle of the year. So far, the yield issues caused both AMD and NVIDIA certain inventory constraints. This made the latter sell more 55nm-based products during 2009 and also somewhat limited the former's head start on the DirectX 11 front. While this, from a certain point of view, may have proven somewhat favorable for NVIDIA, the time frame for solving the remaining issues somewhat coincides with the period when the GPU maker intends to truly ramp up production of Fermi-based GPUs.
“Until December [the output of 40nm wafers] was all about the yields. […] TSMC has made a lot of improvements. They really got a lot of engineering resources engaged and trying to tackle the problems. […] Today capacity constraints are equipment related and not so much yield[-related]. […] There is still room for yield improvements. […] We are looking forward the capacity situation [to be solved] somewhere in the middle of the year,” said David White, chief financial officer of Nvidia, at Goldman Sachs Technology Conference.
“By the time we begin launching Fermi, which is in volume production today, and which will really become mainstream for us in Q2 – Q3 from a volume standpoint, the yield issues will be past us,” added Mr. White.
If things develop according to this prediction, NVIDIA won't suffer from the same inventory handicap that plagued AMD ever since it launched its first DirectX 11 graphics card.