NVIDIA's rising inventory levels hint at big Turing buildup

During yesterday's earnings call, Cowen analyst Matt Ramsay asked NVIDIA about some color regarding the mid-30 percent sequential increase in the firm's inventory. Responding to this question, NVIDIA CFO Colette Kress hinted that a lot of this inventory buildup is related to the launch of Turing. This suggests the company is stockpiling quite a number of chips for a big launch.

Matt Ramsay
Thank you very much. Colette, I had a couple of questions about inventory, the first of which is, I understand you’ve launched a new product set in ProViz, and the Datacenter business is obviously ramping really strongly. But, if you look at the balance sheet, I think the inventory level is up by mid-30% sequentially and you’re guiding revenue up 3% or so. Maybe you could help us sort of walk through the contributions of that inventory and what it might mean for future products? And secondly, if you could talk a little bit about the gaming channel, in terms of inventory, how things are looking in the channel, as you guys see it, during this period of product transition? Thank you.

Colette Kress
Sure. Thanks for your questions. So, when you look at our inventory on the balance sheet, I think it’s generally consistent with what you have seen over the last several months in terms of what we will be bringing to market. Turing is an extremely important piece of architecture, and as you know, it will be with us for some time. So, I think the inventory balance is getting ready for that. And don’t forget, our work in terms of Datacenter and what we have for Volta is also a very, very complex computer in some cases in terms of what we have also in terms of there. So, just those things together, plus our Pascal architecture is still here, makes up almost all of what we have there in terms of inventory.