After a certain stale period, nVidia is beginning to bring positive results, surprising analysts and typical doomsayers. The company reported revenue of $776.5 million greenbacks, 16.9% more than in a previous quarter and achieved a profit of $37.7 million (non-GAAP) and a loss of $105.3 Million (GAAP). nVidia now has 1.45 billion dollars in the bank [138 million more than in Q1'09], and zero debt.
The profit would probably end up even being higher, but nVidia is still making adjustments in regarding to the packaging SNAFU
that hit owners GeForce 8400 and 8600 last year. Still, achieving a profit is a positive move.
The main drivers for this excellent quarter result come in the form of desktop GeForce cards - even though AMD has a formidable line-up and offers DirectX 10.1 cards in all market segments, nVidia and their partners are continuing to push the market and re-ignite interest in the market for GeForce GTX200 series and GeForce 9.
ATI chewed out nVidia in mobile segment, with Montevina Refresh platform gaining a lot of design wins, causing nVidia to lose market share and of course, revenue itself. Recession and ATI also did a lot of damage in the professional graphics card segment - since commercial segment was hit hard, the sales weakness of Xeons and Opterons on the CPU side transitioned into losses on graphics parts too, with FirePro and Quadros suffering losses. Then again, AMD gained a lot, while Quadros suffered a -40% revenue decline in the past 12 months].
But the big winner here is nVidia's ION platform. The rebranded GeForce 9400 chipset gained as much as 26 design wins, with nine designs currently shipping. Interesting though, nVidia marked a 55% QoQ [Quarter-on-Quarter
] growth in AMD chipset business. OEMs
cannot get enough of AMD's chipsets due to shortage that stroke AMD back in March/April, and that sales trend continued throughout April/May/June timeframe.
With this growth, we cannot but ask ourselves what would happen if nVidia didn't pull out one of their stupid moves, with shunning the development of their chipsets for AMD platform. Time will tell did they learn their lesson, but for now, AMD chipset business is showing a lot of market gains.
What is also important was that the Q2'2009 is now marking the appearance of Tegra inside the balance sheets. According to the numbers we saw, Tegra had a little less than 10 million dollars in revenue. But, Tegra scored massive 50 design wins, with 35 of them being in the smartbook arena.
Furthermore, nVidia Tegra won some major deals in automotive industry, with cars from VAG Group [Volkswagen Audi Group
: Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat, Skoda, VW] and Daimler AG
[Mercedes Benz] now featuring a multimedia system that utilizes Tegra and GeForce 9 chips.
But the situation on desktop and notebook front are just about to get very complicated; on September 10th, 2009 AMD will host a presentation where the company will launch its complete, top-to-bottom DirectX 11-compliant line-up, Intel is going to launch Larrabee in second half of 2010, and well, the company doesn't exactly executed a manufacturing leadership that is now more than obvious, more important than ever. If nVidia continues to rely on TSMC as their main partner, there is an inherit danger that manufacturing abilities over at GlobalFoundries and Intel will run the margins further down.
nVidia knows that 40nm FUBAR at TSMC cost them a lot, but in order to secure the future of their GM [Gross Margins], the company has to start being more aggressive on the manufacturing front. If not, sooner or later, AMD and Intel will be there to run them to the ground. For now, nVidia's results show that present is rosy as it can be in the current economical climate, but there are large clouds on the horizon.
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