Nvidia billion during gpu shortage expects

To help these partners, Nvidia works with its partners to either accept lower prices or increase the value of these cards via bundling, such as with games or peripherals.

In fact, Nvidia says as much: “In addition to reducing sales, the company implemented pricing programs with channel partners to reflect challenging market conditions that are expected to persist into the third quarter,” the company said in a statement.

So far, premium graphics cards seem to be receiving the most discounts — as PCWorld managing editor Brad Chacos noted, EVGA cut the price of the GeForce RTX 3090 Ti by a huge a thousand dollars over the weekend, down to (a still astronomical) $1,149. But most of Nvidia’s mid-range GeForce cards don’t see this kind of discount, unlike rival Radeon GPUs.


Nvidia reiterated that sparse supply will continue through the next quarter, but that’s likely factored into its rosy revenue prediction.

Nvidia says it expects most of that $5 billion revenue estimate in Q1 2022 to come from the gaming market, despite being the segment it’s currently having the toughest time serving. Since the launch of the RTX 30-series desktop graphics cards, leading with the RTX 3080, 3090, 3070, and followed by other products, Nvidia hasn’t been able to meet the demand — though it’s not the only company affected. AMD has also struggled, perhaps more than Nvidia, to keep a steady stock of graphics cards heading to retailers.
My colleague Sean Hollister got comments from both companies on the shortage.


Nvidia warned earlier this year that the great GPU shortage would last throughout 2021, and now the company expects supply issues to continue well into 2022. Speaking on Nvidia’s Q2 fiscal 2022 earnings call this week, Nvidia CEO Jensen Huang said he expects supply constraints for the majority of next year.

“I would expect that we will see a supply-constrained environment for the vast majority of next year is my guess at the moment,” said Huang according to a transcript of the call, spotted by Videocardz. Nvidia has committed to securing long-term supply commitments, but demand is still higher than supply right now during a global chip shortage.

Nvidia’s warnings of a GPU shortage well into 2022 might not seem as bad as they sound, though.

Nvidia billion during gpu shortage expects parameter 1 to be

Nvidia’s streak of skyrocketing financial results on the back of soaring GPU prices has come to an end. The company announced revenue of $6.70 billion for the second quarter of 2022, up from the $8.10 billion the company originally forecast. While bad news for Nvidia, it’s a very promising sign that graphics card prices will continue to fall.

Nvidia specifically said that the company’s gaming division revenue fell 44 percent sequentially and 33 percent from the same quarter a year ago, to $2.04 billion.
Other segments, including the OEM/pre-built PC division (down 66 percent, year-over-year) reported mixed results.

“Resale forecasts for our gaming products declined significantly as the quarter progressed,” Nvidia chief executive Jensen Huang said in a statement.

To help those partners, Nvidia works with its partners to either accept lower prices or increase the value of those cards through bundling, such as with games or peripherals.

In fact, Nvidia says as much: “In addition to reducing sales, the company implemented pricing programs with channel partners to reflect challenging market conditions that are expected to continue into the third quarter,” the company said in a statement.

So far, it seems that premium graphics cards are getting the most discounts — as PCWorld’s executive editor Brad Chacos noted, EVGA slashed the price of its GeForce RTX 3090 Ti by a whopping thousand dollars over the weekend, up to (a still astronomical) $1,149. But most of Nvidia’s midrange GeForce cards don’t see that kind of discount, unlike rival Radeon GPUs.

That being said, Nvidia’s RTX 3060 Ti Founders Edition is currently available for its $400 MSRP at Best Buy and has been for several hours (at least), something that hasn’t been seen previously.

Even more interesting is the fact that rival AMD did not suffer from the same price pressures, apparently. AMD’s revenue in its gaming division climbed 32 percent to $1.7 billion, though the company’s gaming division includes both revenue from semi-custom processors for game consoles and PC GPUs — and while the former increased, the latter did not. It’s fair to say, though, that right now AMD’s presence in the console market is insulating it from the overall downturn in the PC market, which Microsoft said “deteriorated” in June.
Intel, of course, recorded an unexpected net loss, too.

As we navigate these challenges, we remain focused on the once-in-a-generation opportunity to reinvent computing for the era of AI,

While Nvidia has pinned their declining gaming revenues on macroeconomic pressures, the same factors did not impact AMD’s gaming revenues to the same extent. While AMD has confirmed that their Q2 2022 GPU sales had decreased, AMD’s gaming revenues actually increased in Q2 2022, mostly thanks to strong console sales.

Let’s be clear here, Nvidia’s declining gaming revenues are due to the demand from cryptocurrency miners coming to an end. Yes, economic factors are affecting the gaming market, but not to the extent that Nvidia’s preliminary earning report has implied.
Nvidia’s “gaming” products were being used by cryptocurrency miners, not gamers.

Our pioneering work in accelerated computing has led to gaming becoming the world’s most popular entertainment, to supercomputing being democratized for all researchers, and to AI emerging as the most important force in technology.”

While many would think crypto-mining played a huge role in the new numbers, NVIDIA revealed that cryptocurrency-related sales made up just $300 million USD of the larger $5 billion USD in revenue. What’s even more shocking is that NVIDIA has forecasted that it is expected to earn another $5.30 billion USD (plus or minus 2 percent) for its next fiscal quarter Q1, 2022.

The ongoing pandemic has certainly played a role in this, and possibly the shortage of semiconductor chips.

Nvidia recently announced that it’s trying to make it easier for gamers, not cryptocurrency miners, to get its RTX 3060 desktop graphics card that’s releasing tomorrow for $329. It’s doing that by implementing GPU driver software that weakens its ability to farm Ethereum by half, in an effort to discourage crypto miners from buying it. It will also introduce its CMP dedicated mining processor in March, which Nvidia is making to serve the mining community with the hope that they’ll leave more of the gaming GPUs for gamers to purchase.

Nvidia reiterated that sparse supply will continue through the next quarter, but that’s likely factored into its rosy revenue prediction.

Nvidia says it expects most of that $5 billion revenue estimate in Q1 2022 to come from the gaming market, despite being the segment it’s currently having the toughest time serving. Since the launch of the RTX 30-series desktop graphics cards, leading with the RTX 3080, 3090, 3070, and followed by other products, Nvidia hasn’t been able to meet the demand — though it’s not the only company affected. AMD has also struggled, perhaps more than Nvidia, to keep a steady stock of graphics cards heading to retailers.

My colleague Sean Hollister got comments from both companies on the shortage.

Earlier this year, Nvidia’s CFO Colette Kress made it clear the worldwide GPU shortage wouldn’t be coming to a conclusion in 2021. Now the company’s estimates are a little less forgiving. CEO Jensen Huang said in a recent earnings call that he doesn’t expect the GPU shortage to resolve itself until well into 2022.

“We have and are securing pretty significant long-term supply commitments as we expand into all these different markets initiatives that we’ve set ourselves up for,” Huang said during the call, which was transcribed by Seeking Alpha (paywalled).

“I would expect that we will see a supply-constrained environment for the majority of next year is my guess at the moment.”

Deep sigh. This is the second time Nvidia has switched up its supply predictions; originally the company estimated we’d be scrounging for GPUs only through the first fiscal quarter of 2021.

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