NVIDIA (NVDA) Stock Falls 3% as TSMC Capacity Crunch Threatens Feynman Chip

TLDR

• TSMC’s 2nm production capacity is fully booked until 2028 and potentially beyond
• NVIDIA may need to redesign its next-gen Feynman AI platform as a result
• Meta is competing for the same TSMC capacity alongside NVIDIA
• TSMC is expected to raise prices annually through 2029 due to surging demand
• Analysts maintain a Strong Buy on NVDA with an average price target of $274.03

NVIDIA’s next-generation chip plans hit a wall Monday after reports surfaced that a production capacity crunch at TSMC could force a redesign of its Feynman AI platform. NVDA fell 3.28% on the news, while TSM dropped 2.82%.

NVIDIA Corporation, NVDA

The report, first published by Taiwan’s Economic Daily News, says TSMC’s advanced 2-nanometer manufacturing nodes are fully booked out to 2028 and possibly beyond. Demand from AI and high-performance computing customers has overwhelmed supply at the world’s largest contract chipmaker.

Feynman is NVIDIA’s next-generation data center architecture, unveiled at GTC 2026. It is the planned successor to the Vera Rubin platform and is scheduled for release in 2028.

The problem is simple: there may not be enough 2nm capacity to build Feynman as currently designed. That’s pushing NVIDIA to look at potential redesigns before the platform even ships.

TSMC Under Pressure From All Sides

TSMC’s 2nm nodes, including the advanced A16 variant, promise efficiency gains of 15-25% over older chip processes. That makes them highly sought after for power-hungry AI workloads.

NVIDIA is not the only company fighting for these slots. Meta is also competing aggressively, ordering custom AI chips and GPUs for its data centers. Apple currently holds over 50% of early 2nm orders, pushing everyone else down the queue.

NVIDIA reportedly holds around 20% of TSMC’s advanced capacity and has booked most CoWoS advanced packaging through 2026. CEO Jensen Huang is said to be pressing TSMC directly for maximum output.

Still, even that level of priority is not enough to avoid the squeeze. Customer queues now extend beyond 2028, and TSMC has signaled annual price hikes through 2029 to offset rising costs.

Where Vera Rubin Fits In

While Feynman faces uncertainty, NVIDIA’s nearer-term Vera Rubin platform is still on track. Vera Rubin is set to begin shipping later this year, ahead of the Feynman timeline.

NVIDIA has also secured A16 allocations for its Rubin Ultra and next-generation GPU lines beyond Vera Rubin. The capacity crunch appears most acute at the Feynman stage, which is further out on the roadmap.

TSMC has acknowledged rising demand and has signaled it will expand capacity over time. However, no concrete timeline has been given for relieving the current bottleneck.

Some analysts point to Intel and Samsung as potential alternative suppliers, though neither currently matches TSMC’s leading-edge capabilities at scale.

Analysts covering NVDA remain upbeat on the long-term picture. On TipRanks, the stock carries a Strong Buy consensus from 41 analysts, with just one Hold rating. The average price target sits at $274.03, implying about 58.7% upside from current levels.

NVDA is down 3.28% on Monday. TSM fell 2.82% on the same session.

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