NVIDIA Announces Q1 2018 Results

Subject: Editorial | May 10, 2017 - 09:45 PM |
Tagged: nvidia, earnings, revenues, Q1 2018, Q1, v100, data center, automotive, gpu, gtx 1080 ti

NVIDIA had a monster Q1. The quarter before the company had their highest revenue numbers in the history of the company.  Q1 can be a slightly more difficult time and typically the second weakest quarter of the year.  The Holiday rush is over and the market slows down.  For NVIDIA, this was not exactly the case.  While NVIDIA made $2.173 billion in Q4 2017, they came remarkably close to that with revenues of $1.937 billion.  While $250 million is a significant drop, it is not an unexpected one.  In fact, it shows NVIDIA being slightly stronger than expectations.

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The past year has shown tremendous growth for NVIDIA.  Their GPUs remain strong and they have the highest performing parts at the upper midrange and high end markets.  AMD simply has not been able to compete with NVIDIA, much less overcome the company with higher performing parts at the top end.  GPUs still make up the largest portion of income that NVIDIA receives.  NVIDIA continues to invest in new areas and those investments are starting to pay off.

Automotive is still in the growth stages for the company, but they have successfully taken the Tegra CPU division and moved away from the cellphone and tablet markets.  NVIDIA continues to support their Shield products, but the main focus looks to be the automotive industry with these high performing, low power parts that sport advanced graphical options.  Professional graphics continues to be a stronghold for NVIDIA.  While it did drop quite a bit from the previous quarter, it is a high margin area that helps bolster revenues.

The biggest mover over this past year seems to be the Data Center.  Last year NVIDIA focused on delivering entire solutions to the market as well as their individual GPUs.  The past two years have seen them have essentially no income in this area to having a $400 million quarter.  This is simply tremendous growth in an area that is still relatively untapped when it comes to GPU compute.

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NVIDIA continues to be very aggressive in their product design and introductions.  They have simply owned the $300+ range of graphics cards with the GTX 1070, GTX 1080, and the recently introduced GTX 1080 Ti.  This is somewhat ignoring the even higher end TitanXp that is priced well above most enthusiasts’ budgets.  Today they announced the V100 chip that is the first glimpse we have of a high end part running on TSMC’s new 12nm FinFET process.  It also features 16 GB of HBM2 memory and a whopping 21 billion transistors in total.

Next quarter looks to be even better than this one, which is a shock because Q2 has traditionally been the slowest quarter of the year.  NVIDIA expects around $1.95 billion in revenues (actually increasing from Q1).  NVIDIA also is rewarding shareholders with not only a quarterly dividend, but also has been actively buying back shares (which tends to keep share prices healthy).  Early last year NVIDIA had a share price of around $30 while today they are trending well above $100.

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If NVIDIA keeps this up while continuing to expand in automotive and data center, it is a fairly safe bet that they will easily overtop $8 billion in revenues for the year.  Q3 and Q4 will be stronger if they continue to advance in those areas while retaining marketshare in the GPU market.  With rumors hinting that AMD will not have a product that will top the GTX 1080Ti, it is a safe bet that NVIDIA can easily adjust their prices across the board to stay competitive with whatever AMD throws at them.

It is interesting to look back when AMD was shopping around for a graphics firm and wonder what could have happened.  Hector Ruiz was in charge of AMD and tried to leverage a deal with NVIDIA.  Rumors have it that Huang would not agree to it unless he was CEO.  Hector laughed and talked to ATI who was more than happy to sell (and cover up some real weaknesses in the company).  We all know what happened to Hector and how his policies and actions started the spiral that AMD is only now recovering from.  What would that have been like if Jensen had actually become CEO of that merged company?

Source: NVIDIA

Even Intel is feeling the pinch, to the tune of a billion dollars

Subject: General Tech | March 13, 2015 - 12:48 PM |
Tagged: Q1, Intel, earnings, billions

Earlier in the week came distressing news from many manufacturers of PC components and now Intel has made their financial state a little clearer.  The Register has posted the numbers, predicted earnings for Q1 of this year have dropped from USD13.7 billion +/- $500 million, down to USD12.8bn +/- $300 million.  Losing about a billion dollars in profit is going to hurt anyone, even the mighty Intel.  The drop in the PC market comes from a variety of sources but two of the most likely candidates are the lack of cash in consumers pockets to upgrade and a lack of competition driving an urge to upgrade.  Once many gamers would willing live on ramen noodles for a time so that they could afford the next GPU or CPU upgrade thanks to the impressive performance increases the next generation offered.  Now new releases tend to offer a small incremental performance increase and occasionally new features which are impressive but nowhere near what an upgrade 10 years ago offered.  Certainly part of the issue is the difficult of coaxing a bit more performance out of silicon and with the reduced competition it is less financially attractive to fund expensive and risky R&D projects than it is to work on small incremental increases in efficiency and performance.

Here's hoping for a change to this market in the coming years.

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"Intel has lowered its revenue forecast for the first quarter of its fiscal 2015 by nearly a billion dollars, citing a weaker than expected PC market."

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Source: The Register

It has been a rough quarter for the tech industry

Subject: General Tech | March 10, 2015 - 12:36 PM |
Tagged: Q1, gigabyte, earnings, msi, TSMC, amd, Intel, nvidia

There is quite a bit of news on how various component manufacturers have fared at the beginning of 2015 and not much of it is good.  Gigabyte has seen revenues drop almost 20% compared to this time last year and a significantly higher overall drop and while MSI is up almost 4% when compared to this quarter in 2014, February saw a drop of over 25% and over the total year a drop of nearly 8%.  TSMC has taken a hit of 28% over this month though it is showing around 33% growth over the past year thanks to its many contract wins over the past few months.  Transcend, Lite-On and panel maker HannStar all also reported losses over this time as did overseas notebook designers such as Wistron, Compal and Inventec.

Intel is doing well though perhaps not as profitably as they would like, and we know that NVIDIA had a great 2014 but not primarily because of growth in the market but by poaching from another company which has been struggling but not as much as previous years.  The PC industry is far from dead but 2014 was not a kind year.

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"Gigabyte Technology has reported consolidated revenues of NT$3.216 billion (US$101.93million) for February 2015, representing a 39.31% drop on month and 26.75% drop on year.

The company has totaled NT$8.515 billion in year-to-date revenues, down 18.47% compared with the same time last year."

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Source: DigiTimes

Intel Announces Q1 2012 Earnings: Not a Record, but Close

Subject: Editorial | April 23, 2012 - 05:12 PM |
Tagged: trinity, Q1, Ivy Bridge, Intel, earnings, atom, arm, amd, 2012

Guess what? Intel made money. A lot of money. This is not surprising. The results were not record breaking, but they did beat expectations. Intel had a gross revenue of $12.9 billion for the quarter, with a net income of $2.7 billion. Gross margins decreased (slightly) to 64%, but the reasons for this are pretty logical as we discover down below. Compared to Q4 2011, results are still significantly down, but this is again expected due to seasonal downturns. In Q4 they had $13.9 billion in gross revenue and $3.4 billion in net income with a gross margin of 64.5%.

 
Currently Intel is showing inventory at near historic lows, and this is due to a variety of factors. The PC market has been growing slower than expected due to the hard drive shortage that started last fall. Intel has adjusted manufacturing downward to account for this, and has worked to ramp 22 nm products faster by cutting back 32n production and converting those 32 nm lines. Intel is very aggressive with Ivy Bridge, and it expects 25% of all shipments in Q2 to be 22nm products. This is probably the fastest and most aggressive ramp that Intel has ever done, and it will continue to put AMD in a hole with their 32 nm production.
 
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The second half of the year should see some significant growth on the PC side. The primary push will be the release of Windows 8 from Microsoft. This, combined with the near complete recovery of hard drive production, should push PC growth the record levels. Ultrabooks are an area that Intel is spending a lot of money to promote and develop with their partners. There are some 26 Ultrabook designs on record so far, and Intel expects this number to rise rapidly. The big push is to decline the overall price of Ultrabooks, as well as enabling touch functionality for a more affordable price. While not mentioned during the conference call, AMD is also pushing for ultra-thin notebooks, and once Trinity enabled products hit the street, we can expect a much more aggressive price war to be waged on these products.
 
Smart phones are another area that Intel is actively trying to expand into. This past quarter we saw the introduction of the Orange, Lava, and Lenovo phones based on the Medfield platform. So far these have been fairly well received by users and media alike, though the products have certainly had some teething issues. Intel still has a lot of work to do, but they finally realize the importance of this market. Intel expects that there will be 450 million smart phones shipped in 2012 (from all manufacturers), and that it is expected to grow up to 1 billion shipped a year by 2015/2016 (if not sooner). Intel wants to get into those phones, and is adjusting their Atom strategy to fit it. While in previous years Atom lagged behind other processor development from Intel, they are pushing it to the forefront. We can expect to see Atom based products being manufactured on 22 nm, and then aggressively pushed to 14 nm when that process node is available. Intel feels that they have a significant advantage in process technology that will directly impact their success in achieving higher rates of utilization across product lines in the mobile sector. If Intel can offer an Atom with similar performance and capabilities, tied with a significantly lower TDP, then they feel that a lot of phone manufacturers will look their way rather than use older/larger/more power hungry products from competitors.
 
Finally, Intel essentially has little interest in becoming a foundry for other partners. They are currently working with a handful of other countries to produce products for them, but I think that this might be a short term affair. Intel will either stay with a few partners to produce a low quantity of parts, or Intel will learn what they have to about producing products like FPGAs and eventually start producing chips of their own. When Intel fabs their own parts, they essentially get paid twice as compared to foundries or 3rd party semiconductor companies.
 
Intel continues to be profitable and successful. Ivy Bridge is going to be a very big product for Intel, and they are going to push it very hard through the rest of this year. Mobile strategies are coming to fruition and we see Intel getting their foot in the door with some major partners around the world. Servers, desktops, and notebook chips still comprise the vast majority of products that Intel ships, but mobile will become a much stronger player in the years to come. That is if Intel is able to execute effectively with accelerated Atom development on smaller process nodes. ARM is still a very worthy competitor, and a seemingly re-invigorated AMD could provide some better competition with Trinity and Brazos 2.0 in the notebook/tablet market.
 
Margins will be down next quarter due to the aggressive 22 nm ramp. With any new process there will be problems and certain inefficiencies at the beginning. As time passes, these issues will be resolved and throughput and yields will rise. Intel does expect a larger PC growth through the next quarter and a higher gross revenue. It will be interesting to see if Ultrabooks do in fact take off for Intel, or will competitors offer better price/performance for that particular market. Needless to say, things will not slow down through the rest of this year.
Source: Intel