Nvidia's supply-chain blind spot
Investors remain bullish on Nvidia, but analysts warn the company's hardware story faces concentrated upstream risks — notably gallium, a specialised mineral where China dominates processing. At the same time, long-duration compute contracts (e.g., Meta’s expanded $21bn deal with CoreWeave) are locking premium capacity into multi‑year arrangements, highlighting how scarcity is being managed through long-term commitments. (benzinga.com, cloudnews.tech)
Nvidia’s artificial intelligence boom still runs through a narrow set of chokepoints, and one of the least visible is gallium, a metal China dominates. (usitc.gov) Gallium is used in compounds such as gallium nitride and gallium arsenide, which go into integrated circuit chips, laser diodes, light-emitting diodes and other electronics. The U.S. International Trade Commission said China produced close to 90 percent of the world’s gallium in 2022, and the United States was 100 percent net import reliant for gallium that year. (usitc.gov) China’s Ministry of Commerce put export controls on gallium in July 2023, and the United States Geological Survey said China then banned gallium exports to the United States in December 2024. The Center for Strategic and International Studies wrote in 2025 that Beijing’s controls had turned gallium into a supply-chain pressure point for semiconductors, radar and defense systems. (pubs.usgs.gov, csis.org) Nvidia does not mine or refine gallium, but its own filings describe a hardware business built on concentrated manufacturing links. In its annual report for the year ended January 26, 2025, Nvidia said its supply chain was mainly concentrated in the Asia-Pacific region and that it relied on foundries including Taiwan Semiconductor Manufacturing Company and Samsung Electronics for wafer production. (sec.gov) That leaves two scarcity stories running at once. Upstream, a specialist mineral remains exposed to export controls; downstream, the biggest buyers are reserving finished computing capacity years in advance. (csis.org, sec.gov) CoreWeave disclosed on April 9 that Meta had expanded their agreement to about $21 billion for artificial intelligence cloud capacity through December 2032. CoreWeave said the new deal lifted its contracted revenue with Meta to about $35 billion. (investors.coreweave.com) Reuters and CNBC reported the contract as part of Meta’s push to secure more computing power for inference, the work of running trained models for users at scale. CoreWeave said some of that capacity would include early deployments of Nvidia’s Vera Rubin platform. (msn.com, cnbc.com, investors.coreweave.com) The split is simple: investors can stay bullish on Nvidia’s sales while suppliers, cloud operators and customers lock in around the parts of the stack that still look fragile. Gallium is one example of the upstream constraint, and seven-year compute contracts are one example of the downstream response. (usitc.gov, investors.coreweave.com)
