Overnight, Asian tech stocks slumped after a report that Nvidia’s next-generation AI server rack system has been delayed by more than a year due to manufacturing difficulties (we profiled it back in May in "Nvidia's Vera Rubin Rack Will Cost $7.8MM: Here's What's In It".)
Research firm SemiAnalysis said in an X post that Nvidia’s Kyber NVL144 hit setbacks in the construction of printed circuit boards for the platform.
According to the tweet, the PCB midplane at the center of the Kyber design remains too difficult to produce reliably. As we noted two months ago, the Kyber design consolidates 144 of Nvidia's most powerful chips into a single cabinet, enabling them to operate as one unified system, and was originally expected to arrive alongside Vera Rubin Ultra in 2027.
Meanwhile, cloud providers pushed back against the design over operational complexity, SemiAnalysis said, leaving Nvidia without a tested path to expand the scale-up architecture for Rubin Ultra.
In response, Japan’s Ibiden, a PCB maker that counts Nvidia as its largest client, dropped as much as 10%. Among related suppliers, Kingboard Laminates Holdings tumbled 18% in Hong Kong, Elite Material fell 10% in Taiwan and Samsung Electro-Mechanics slid 11% in South Korea.
The selloff came after a significant run-up in those stocks. Before Monday's reversal, both stocks had posted extraordinary gains for the year - Kingboard Laminates by over 470% and Samsung Electro-Mechanics by more than 600%, according to Bloomberg.
The report by SemiAnalysis, which has been known to play "loosely" with market-moving information and trade ahead and/or after its calls (see here and here), many of which have been big flops, landed as AI stock investors have been growing increasingly anxious, with even the smallest setback sparking outsized reactions after a yearslong rally. Last week, global tech stocks whipsawed on headlines hinting at potential overcapacity in the AI buildup and growing competition; earlier today ZH was the first to point out that token expenditure are once again rolling over.
The SemiAnalysis report spurred “weakness across regional tech” Monday, said Shawn Oh, head of Korea cash equities at NH Investment & Securities Co. in Seoul. The prospect of a Kyber NVL144 delay together with other points in the post are “raising uncertainty around Nvidia’s next-generation scale-out road map and creating a wider competitive window for alternative AI platforms,” he added. It's also the reason why AMD stock surged today, as any delays in the Nvidia ecosystem allow competitors to grab market share.
SemiAnalysis also warned that NVL576, which would connect eight of the Kyber racks over optical links to form an even larger system, faces its own delays or constraints on production volume.
However, hours after the unconfirmed SemiAnalysis report sent the Nvidia supplier ecosystem tumbling - giving an opportunity to the research firm to buy the stocks cheap for itself or its partners - an Nvidia spokesman told Bloomberg that “Our road map is intact."
Additionally, CNBC also reported that its existing Rubin systems have entered full production and deliveries to eight major cloud customers - among them Amazon Web Services, Microsoft Azure, and Google Cloud - are scheduled to begin this fall.
An MSCI Inc. gauge of sector shares is down 8.5% in the past two weeks, extending its loss Monday with PCB makers among the leading decliners.