Nvidia has been concerned about their relationship with TSMC for awhile.
It seems that their yield for the 28 mm process is too low. There is a reasonable limit of how many additional wafers they should manufacture to cover shortfalls of good dies coming out of the fab.
TSMC 28nm capacity in large shortage
Monica Chen, Taipei; Adam Hwang, DIGITIMES [Friday 6 April 2012]
Taiwan Semiconductor Manufacturing Company's (TSMC) 28nm foundry capacity has been drastically short of demand from Qualcomm, AMD and Nvidia mainly, but the shortage is expected to relax at the end of the third quarter of 2012, according to industry sources. Qualcomm, in view of the shortage, has shifted some orders to United Microelectronics, but has been unable to meet its clients' demand for processors for smartphones and tablet PCs, the sources indicated. AMD launched the 28nm-based Radeon HD 7970 in the first quarter of 2012, but has actually shipped a relatively small volume of the GPU due to TSMC's short 28nm capacity, the sources noted. Nvidia launched only one 28nm-based GPU, GeForce GTX 680, in late March and has had to delay the launch of Kepler series GPU models due to the shortage, the sources said.
While yield rates of its 28nm process are slowly improving, TSMC is conservative about expanding 28nm foundry capacity in order to maintain gross margins, partly accounting for the capacity shortage, the sources said. In related news, TSMC will start construction of the 5th-phase expansion of Fab 14, its 12-inch fab located at the Southern Taiwan Science Park, on April 9. TSMC's total foundry capacity in 2012 is expected to increase by 10% from 2011