Business Case Studies & Business Publications

Nvidia and the Great East–West Semicondu...

Chen, Ming-Jer, Le...

Case

Nvidia and the Great East–West Semiconductor Game

Chen, Ming-Jer; Leong, Jin

S-0374 | Published April 13, 2022 | 19 pages Case

Collection: Darden School of Business

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This case describes the competitive rivalry in the global semiconductor graphics processor unit (GPU) market in early 2020 and impact of both the COVID-19 crisis and the escalating US-China trade tensions on the actions of the key players. The case also focuses on the evolution of the global semiconductor manufacturing value chain, from the vertically integrated model of integrated device manufacturers (IDMs) to a disaggregated model of fabless technology companies that focus on research and design and rely on off-shore pure-play semiconductor foundries for production. Nvidia is the leader of the semiconductor GPU market for gaming, digital processing, and machine learning applications and competes aggressively with AMD and Intel. Its most recent product launch has suffered from significant supply delays from its offshore semiconductor fabricators and knock-on effects of sanctions imposed by the US Commerce Department. These challenges have exposed the weaknesses of the outsourced business model and the fragility of the global semiconductor ecosystem. The case provides an example of how national interest and international relationships impact business decisions and competitive actions.