NVIDIA's Next-Generation Blackwell AI Chip

According to Morgan Stanley, NVIDIA (NASDAQ: NVDA)'s upcoming Blackwell AI chip is set for a robust ramp-up, with production revenue in 1Q25 anticipated to surpass that of the current Hopper chips.

Production Estimates

The bank's analysts have conducted supply chain checks suggesting that Blackwell chip output may reach between 750,000 to 800,000 units in 1Q25, a significant increase from the estimated 250,000 to 300,000 units expected in 4Q24.

Revenue Projections

This production surge is projected to contribute $5 to $10 billion in revenue for NVIDIA in 4Q24 alone. Jensen Huang, NVIDIA's CEO, described demand for the Blackwell chips as "insane" in a recent CNBC interview, noting customer eagerness to secure large volumes of these high-performance AI chips, stating, "everybody wants to have the most and everybody wants to be first."

Hopper Chip Volumes

While Hopper chip volumes, including the H200 and H20 models, are estimated to reach 1.5 million units in 4Q24, these figures are expected to gradually decline to 1 million units in 1Q25. The Blackwell chips, however, carry a price premium, with B200 chips selling for 60-70% higher than H200 units, which positions Blackwell's revenue to surpass that of Hopper in the coming quarter.

Future Developments

Looking forward, the report also points out the development of NVIDIA's GB300 NVL72 server racks, expected to be introduced in June 2025, which are predicted to enhance the company's supply chain and further drive demand for Blackwell chips.

Market Implications

Morgan Stanley views the ramp-up of Blackwell as favorable for stocks that are linked to NVIDIA's GPU supply chain, including TSMC, KYEC, and ASE. The firm also notes potential advantages for Aspeed due to increased BMC content, although ongoing specification changes add some uncertainty regarding the ramp-up timing.