Nvidia "opens can of whoop-ass" on itself

Millions of failing parts, income way down

By Charlie Demerjian: Wednesday, 02 July 2008, 11:22 PM

Click here to find out more!

NVIDIA IS TANKING, we told you so. It just put out two pieces of very bad news, It's taking a $150-200M charge in the quarter for what looks to be a product failure, and ATI is kicking its rear end.

If you look at the 8K form it just filed, there are two big pieces of bad news. The first is that some unnamed mobile and MCP products have big problems, hundreds of millions of dollars worth. It is said to be, "Arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products used in notebook systems". That is bad, but to make matters funnier, "There can be no assurance that we will not discover defects in other MCP or GPU products."

To us, this says they used the same materials in other things, and it takes a while to show up, shown by the 'previous generation' bit. We'll bet money that this is the tip of the iceberg. Also, given how much mobos and mobile GPUs cost, this looks like a problem that is affecting a million or more units. Unrelated pricing of Dell notebooks today led us to see that, for most parts, NV mobile GPUs are either a $80 or $130 upgrade over integrated. $150-200M/$130 is still over a million, likely multiple millions of dead parts. Don't treat the future here lightly.

The bigger problem is what we have been saying for a long time, ATI is kicking Nvidia up and down the block. It sets quarterly guidance down to $875-950M vs $1.1 billion for the quarter. Guess why? Nvidia isn't saying, but this, this, and this are good places to start, as is the partner exodus. More on that later, this is a start, but they are far from the only ones. Please note that this drop does not include the one time charge from the dead parts.

Nvidia is going to lose gobs and gobs of market share this year. They are effectively out of notebooks, will lose the high end in days, don't have anything close to a competitive line-up, have higher costs than ATI, and have to shell out money to keep partners alive. If you think this is bad, wait a little.

NV's roadmap is empty, ATI's is not.

100 basis points my ass. µ

well this is from the inquirer so take you can take it lightly

and



Nvidia to drop 280 / 260 prices Print E-mail
Written by Fuad Abazovic
Wednesday, 02 July 2008 20:32

Image

$90 and $30

As of tomorrow, Nvidia plans drop the prices of Geforce GTX 280 and 260. The reason for this sudden price cut is that the cards are not selling as well as Nvidia expected. The second part of the story is that Radeon HD 4870 ended up better than Nvidia had hoped.


Nvidia will cut $90 of the Geforce GTX 280 price-tag, but this is Nvidia's price to partners and we are not sure just how much will this affect the suggested etail price. We are sure that end user prices will also drop but probably a bit less than $90.

The Geforce GTX 260 will be $30 cheaper to partners and Nvidia will only offer limited price protection which means that some partners / distributors and stores might end up with some overpriced cards at their warehouses.

Many people won’t be happy but as of tomorrow GTX 280 and GTX 260 should be cheaper


what ever way you look at it they are up **** creek,

i don't feel sorry for them with there overcharging

Ranger, just to make the quotes clearer, could you bold them or else edge them with something like this ;

where of course the < and the > are really [ and ] .

Anywhoo interesting reads. I think charlie's a little over-pessimistic/optimistic about the mobile situation despite all the previous issues, as there's not much ATi mobility hardware flooding the market, and the HD38xx is still a ways off, leaving nothing but nV at the above HD3650 mark with 5 solutions without including mobile SLi.

I would say that at the very least Nvidia will have to lower its prices in order to compete. I know the Nvidia parts are faster but not 2X faster and thats what they would need to be in order to be charging the prices they do...

I think you have pretty high hopes for AMD as a company. Q3 will tell whether they will survive.

You do realize that everything that AMD is selling right now is being sold at a loss purely for the sake of increasing market share. While this is a good short-term strategy it is not longterm viable and AMD's cpu department costs are dragging the company into the ground.

You keep forgetting that AMD is not just a GPU company - they also sell chipsets and CPUs that they have lost obscene amounts of money on over the last year.

I don't know if you realize this but Intel has a better notebook, a better processor, a better chipset for a wider range of computers, and assuming Larrabee is half of what we think it could be; it'll be the nail in AMD's graphics department as well.

I really see AMD as being a tool for Intel to use against Nvidia and nothing but. Without Nvidia to stand up against Intel; Intel will create a monopoly in a matter of a couple years - and then you can kiss affordable PCs goodbye.

we all up burning the midnight oil,

yes i know charlie is a ati fanboy but still he makes some valid points

and ovaltineplease intel makes some **** hot chipsets but there gfx suck big time and i know nvidia will live to fight another day but its not that i like ati i just dont like nvidia there business practices are down right under handed

That may be true of their CPU department, but their ATi department is actually making money and would've been a + on the balance sheet if not for other write-downs. since their purchase the GPU segment along with the TV segment were profitable, the only part of ATi to recently show weakness was their handset business, which had a small but still in the negative loss last quarter. However both are expected to be pluses again this quarter as Q1 is typically a down quarter following the Xmas spending sprees. Year over year they were up for Q1.

It doesn't just take better, AMD had better in the XP and early AMD64 era, yet intel still made a ton of money in both desktop and mobile segments. The main thing is for AMD to be making enough revenue to help spread out operating costs. Processors are very economies of scale dependant, and while you could be the best CPU or GPU maker of 1 million units a year, that does little to help your future, whereas spreading your costs out and minimizing your loses while establishing yourself as a 10+ million unit maker helps you stay competitive and spread out your R&D for the next revenue generator.

nVidia isn't doing any real standing up against nV, their future is a dead end without either a radical change in software or their ability to produce X86/64 solutions that make them more money than just a loos affiliation with VIA would. The reality is that even if you combine the revenues of AMD, nVidia, and VIA together you still end up with about 10% of that of intel. Like it or not intel is a monopoly with or without the apperance of opposition. The graphics segment is just a question mark until we find out whether Larrabee is a worthy candidate or another flop like the i740. Even if a success, if intel is Raytracing focused with it, right now AMD would have the edge in a reply since their HD4K solution is more adept currently than the nV GTX 2xx series.

Both nV and AMD are losing money due to the new price points, slashing temselves to hurt their competition; however it seems that nV is losing more (but had more to lose), while AMD are just scraping by pretty much paying for production, just losing money on overhead (11mil last quarter). Even the second quarter results won't be as interesting as the 3rd quarter similar to what you mention, because that's when the HD4K vs GTX battle will shape up, and that's truly the battle for the future, the second quarter results will be primarily about the change in the mobile segment and the end of the HD3K / GF8 battles, where yields may play a big role.

its like your reading my thoughts but i tend to keep it simple you can only do so much with one finger

btw what am i thinking now

You're thinking you might wanna go up and clean that first post to make the quotes more readable, or at least that's what I was thinking.

na, Mmmmmmm donuts

i leave my posts the way i live my life