NVIDIA sees high demand, increases foundry orders

Posted on Monday, May 19 2008 @ 20:03 CEST by Thomas De Maesschalck
CENS writes NVIDIA will outsource more to TSMC and UMC to keep up with the strong demand for its graphics chips:
Chip-making equipment suppliers pointed out that throughout last quarter Nvidia had contracted TSMC to make a record 50,000 wafers of 65nm chips and UMC to make 7,000-9,000 wafers of similar chips. Although Nvidia has scaled down contract volume of G80 chips by 3-5% as part of its effort to work off overstock, the company has increased foundry contracts of its G92B, G94 and G96 chips. Accordingly, industry watchers forecast contract volume to TSMC would surge to 60,000 wafers and the volume to UMC to rise to 10,000-12,000 wafers next quarter.

Throughout the quarter to April this year, Nvidia had revenue of US$1.1 billion, soaring 37% from US$844 million it had the same period of last year. Although the company saw its gross margin drop 44.6% in the meantime because of choppy product-line crossover, the recession pace was lower than expected 46% and its earnings were 34% higher than the same period of last year.

The company`s executives pointed out that the company shipped 42% more chips last quarter than the same period of last year, the highest quarterly growth in its history. They estimated the company`s shipments to grow at double-digit rate next quarter from past records, which show third quarter is normally a peak season that usually drives up the company`s shipment to grow at double-digit pace.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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