NVIDIA's Huang admits to underestimating ATI

Thursday 14th August 2008, 01:02:00 PM, written by Rys

NVIDIA CEO Jen-Hsun Huang has admitted to underestimating the strength of ATI's recent product launch lineup in its most recent financial conference call.

We quote, from Seeking Alpha:

"We underestimated the price performance of our competitor’s most recent GPU, which led us to mis-position our fall lineup. The first step of our response was to reset our price to reflect competitive realities. Our action put us again in a strong competitive position but we took hard hits with respect to our overall GPU ASPs and ultimately to our gross margins. The price action was particularly difficult since we are just ramping 55-nanometer and the weak market resulted in taking longer than expected to work through our 65-nanometer inventory."

The company's share price is at a long-time low following a string of fairly hefty blows recently, some of them their own doing.  Punching one's self in the face is rarely an enjoyable activity, extensive Beyond3D research has shown, and science proves us right with the per-share price down at $10 for a little while now.

RV770 is the company's biggest nemesis in recent times, though, with ATI finding hitherto unknown levels of performance per area, and performance per watt.  While the basic architecture of the chip is less efficient than recent NVIDIA designs, the sheer amount of raw compute it packs in to diminuitive silicon dimensions is fairly staggering, and NVIDIA must be wondering how they did it, and how to emulate it in their own products.

NVIDIA is putting some faith in the ramp of 55nm-based inventory going forward, in order to increase ASP, to reduce the financial hits they've taken recently, according to Huang and as reported by Seeking Alpha.

You can check out the Seeking Alpha piece on their website.



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Tagging

nvidia ± financials, punching, in, the, face, jen, hsun, huang, seeking, alpha


Latest Thread Comments (1071 total)
Posted by Razor1 on Saturday, 27-Jun-09 13:21:04 UTC
hmm and Dell isn't using nV gpu's for thier future laptops :lol:. Come on taking Charlie's word for it is like trusting a person that went to jail for lieing under oath :grin:

Posted by willardjuice on Saturday, 27-Jun-09 17:39:44 UTC
Quoting Razor1
hmm and Dell isn't using nV gpu's for thier future laptops :lol:. Come on taking Charlie's word for it is like trusting a person that went to jail for lieing under oath :grin:
Well that quote wasn't Charlie's word, it was Apple's. Do you think they sound very happy with Nvidia?

Posted by Razor1 on Saturday, 27-Jun-09 21:09:57 UTC
both Dell and HP had similiar press releases, although nV admitted before hand, but things like this happen, OEM's and system builders aren't going to just drop suppliers like Charlie is saying. If that was the case Dell would have dropped Intel and went to AMD after Intel's motherboard mishap in the early 2000's, which even till date Intel hasn't taken resposibility for. There is more to it then just bad parts that cause deals to fall apart, its the same shallow thinking that Charlie has in all of his articles.

Posted by rjc on Monday, 29-Jun-09 08:05:18 UTC
Quoting Tahir2
What you are speculating on doesn't really make much sense to me since the 2D component architecture is going to be able to crank all the way up to 2048x1536 at 75Hz if the display supports it (maybe badly but netbooks definitely have a long long way to go before they have 8 to 11" displays of that resolution!
So in the above case the device doesnt really need extra gpu power nvidia is providing, then nvidia is going to have real difficulty preserving large margins on making that sale. Obviously from nvidia's point of view somehow they need to make the extra performance essential something that the device cannot just do without.

(Sorry if above is obvious, was just trying to make point clear)

Re >45%....i guess that was for the Zune business. If they can continue to keep it above 40% it will all work out good. Of concern though is that given Tegra has been on sale for a year now the possibility they are restricting sales only to higher margin clients. Similar to the strategy they seem to be using with Ion.

Earlier in 2009 i think guidance was roughly $100m for Tegra this year. If they achieve that or better at good margins then everything will be fine.

Posted by Tahir2 on Monday, 29-Jun-09 21:02:28 UTC
Quote
Obviously from nvidia's point of view somehow they need to make the extra performance essential something that the device cannot just do without.
Agreed and at the moment it is the ability to play HD material (big win for them) and a more tolerable gaming experience. In other words NVIDIA have positioned ION as being capable of playing 720p and 1080p material.

Posted by neliz on Tuesday, 30-Jun-09 08:49:19 UTC
Vr-Zone reports that nV's 40nm GT200 discrete products won't launch before October, production starts in August.

http://vr-zone.com/articles/nvidia-partners-get-ready-40nm-g210--gt-220-cards/7272.html?doc=7272.

This goes the same for the mobile products. Ouch.

Posted by kemosabe on Tuesday, 30-Jun-09 23:30:24 UTC
I don't have membership access to the details, but analyst JoAnne Feeney at FTN Midwest Securities apparently claims (http://www.theflyonthewall.com/permalinks/entry.php/NVDAid1095466) that her own channel checks suggest that OEMs (namely Dell, HP and Apple?) will be giving Nvidia less business going forward.

Too early to sound the alarms, but there might be more here than Charlie's imagination running wild.

Posted by kemosabe on Friday, 03-Jul-09 16:20:53 UTC
Chestthumpless denial (http://www.fudzilla.com/content/view/14512/1/) by NVDA, at least with respect to Apple.

Posted by ShaidarHaran on Friday, 03-Jul-09 17:09:21 UTC
I think this is the saddest day ever. Fraud abababa is denouncing Charlie Demerjian's FUD? What has this world come to!

Posted by Tahir2 on Friday, 03-Jul-09 18:41:06 UTC
Quote
Fraud abababa
You can get Charlie's name right but not Fuad's? That ain't very nice is it.


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