Mrzorro
06-30

NVIDIA's Supply Chain Empire: Who Powers the AI's Computing Backbone?


$NVIDIA Corp(NVDA)$  , as the most popular AI chip designer, has a supply chain that is extensively distributed across various segments of the semiconductor industry. The following figure breaks down NVIDIA's suppliers. 

It should be noted that different companies have slightly different disclosure timelines, so the data may vary slightly from the actual proportions. The supply chain data reveals the following characteristics:


Characteristic 1: Diversity of Sectors

NVIDIA's suppliers include TSMC in the semiconductor manufacturing field, SK Hynix and $Micron Technology(MU)$   in the storage chip area.

Companies like $Flex Ltd(FLEX)$   and Wistron Corporation serve in the production of AI servers. $Monolithic Power(MPWR)$   offers power management solutions. 

In the testing equipment sector, there are $Keysight Technologies (KEYS.US)$ and $Advantest (ADR) (ATEYY.US)$ . Meanwhile, $ASE Technology (ASX.US)$ and $Amkor Technology (AMKR.US)$ provide packaging and testing services. In the materials sector, there is $Ibiden (4062.JP)$ . 

This demonstrates that NVIDIA's supply chain involves the entire chip process as well as supporting peripheral segments, requiring collaboration across multiple industries.


Characteristic 2: Globalized Supply Chain Layout

The companies come from various regions including South Korea (SK Hynix, Samsung Electronics), the United States (Micron Technology, Keysight Technologies, Ansys, Western Digital), the Taiwan region (TSMC, Wistron, ASE Technology Holding, Quanta Computer), and Japan (Ibiden, Advantest), reflecting NVIDIA's global supply chain layout, utilizing the semiconductor industry advantages of different regions.


Characteristic 3: Asymmetry Between Costs and Revenue

Some companies have a high "revenue share of suppliers" but a low "cost share in NVIDIA's expenses."

For example, Fabrinet's revenue from supplying NVIDIA accounts for 35.10% of its total revenue, while its cost to NVIDIA is only 4.37%. Similarly, Ibiden Co Ltd's revenue related to NVIDIA accounts for 20.32% of its total revenue, and Wistron Corp's revenue related to NVIDIA accounts for 17.83% of its total revenue. This indicates that these companies have a high dependency on NVIDIA's business.

Conversely, TSMC has a "revenue share for suppliers"of 13.05%, but a "cost share in NVIDIA's expenses"of 32.81%, meaning that chip manufacturing services have a significant impact on NVIDIA's costs. The chip manufacturing stage has high added value and a significant proportion of costs, making it a key area of high-cost investment for NVIDIA.


Nvidia for me is a stock that can hold for 20years. 4 trillion  won't be a problem ![Miser]  [Miser]  [Miser]  



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