NVIDIA (NVDA, Financial) has begun redirecting orders from Supermicro (SMCI) to other suppliers to address disruptions in the AI server industry. Supermicro is facing severe financial reporting issues, with the threat of delisting if they fail to submit statements by late November. Previously delisted in 2018 for non-compliance, the company's financial troubles have caused significant market turbulence.
Supermicro's challenges have led NVIDIA to intervene, moving client orders to alternative vendors to stabilize the supply chain. This week saw Supermicro's stock plummet over 45%, marking its worst performance, spurred by their auditor's resignation amid ongoing financial scrutiny. Following a critical report by Hindenburg Research, the company delayed its annual report submission but assured no major changes for its 2024 fiscal outlook.
Supermicro has since renegotiated its loan terms with Cathay Bank, extending the deadline for submitting annual results. Meanwhile, Gigabyte and ASRock have benefitted from Supermicro's order reallocation, seeing increased demand and contracts with major clients like CoreWeave. Gigabyte has revised its Q4 and annual revenue forecasts upwards, alongside accelerated liquid cooling technology deployment aligning with NVIDIA's growth.
ASRock has witnessed record revenue in Q3, anticipating peak performance in Q4 with improved annual sales and profit forecasts. The company also plans to introduce liquid cooling products, supporting future growth predictions, having secured its place in NVIDIA's upcoming supply chain.
Supermicro's predicament might impact its supply chain partners, like Leadtek Technology, heavily reliant on Supermicro for business. Leadtek is supported by Ablecom Technology and Compuware Technology, whose executives share familial ties with Supermicro's chairman. Concerns about Leadtek's market share in AI and its financial health persist. Additional suppliers like Siliconware Precision Industries, Auras Technology, and Argosy Research are also facing potential disruptions due to reduced order volumes, impacting their positions in the AI landscape.
