Big Problems for Super Micro after Nvidia Changes Suppliers

Nvidia’s (NVDA) most recent business decision could cost Super Micro Computer (SMCI) in a big way, jeopardizing their ability to meet their operating expenses.

For investors and supplies, Nvidia has been a golden goose, but the microchip manufacturer has recently shifted one of its largest orders from Super Micro Computer over to Taiwanese competitors. This has placed Super Micro in a precarious position, and they must be asking themselves if Nvidia is no longer interested in doing business with them.

Of course, Nvidia has become one of the biggest companies in the world, second only to Apple (APPL) as it dominates the AI market. This rapidly growing company has seen its stock soar this year, after it had a stellar 2023 as well.

For a while, Super Micro has been one of Nvidia’s leading customers, and the company has profited from the rise of Nvidia and the AI market. That could all be changing and rapidly as Nvidia struggles to keep up with customer demand. There is more need than ever before for the company’s powerful AI processing chips, and Nvidia has to think about its customer base and how to meet their needs, or it will end up losing a significant part of its market share.

Super Micro Future in Doubt

Because this market is so hot right now, if Super Micro is no longer a top Nvidia customer, then someone else will step up to fill their shoes, but where does that leave SCMI?

The position that SCMI has held in the Taiwanese market has been in trouble ever since YTL has stopped working with them and instead gone over to the Taiwan Winston Group. TYTL is Taiwan’s largest conglomerate and a very important client for Super Micro. With this shift, SCMI is in even more trouble, and the change is sure to affect Super Micro negatively.

Super Micro is now in danger of being delisted from Nasdaq over financial misconduct accusations. This company has now become a very risky choice for stock market investors. Their stock is down 3.83% today and has fallen by more than 50% since the start of November.