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NVIDIA reports another bad quarter

It's been a rough year for NVIDIA. Typically, the graphics giant is one of the most profitable companies in the technology industry. That all changed in 2008 with NVIDIA seeing one of its first quarterly losses in a very long time.

NVIDIA's first loss in 2008 was due in part to a onetime charge it took related to the repair and replacement of faulty GPUs in notebooks form some of the biggest computer makers around including Dell and HP.

NVIDIA announced its Q3 fiscal 2009 financials this week and reported a significant 20% reduction in quarterly revenue compared to the same quarter in fiscal 2008. NVIDIA took a one-time charge of $8.3 million related to the layoff of 360 employees globally. The pre-tax charge was to cover the cost of severance and related expenses.

Jen-Hsun Huang, NVIDIA President and CEO said in a statement, "We made good progress on multiple fronts during the quarter. Improving gross margin while managing operating expenses enabled us to significantly improve our operating fundamentals. We transitioned our performance segment GPUs to 55 nanometers and are now poised to recapture lost share.”

“We entered the fastest growing segment of the PC market with our first notebook chipset for Intel processors, and delivered on several exciting new growth initiatives -- 3-way SLI for the Intel Core i7 processor platform, Quadro CX for Adobe CS4 creative professionals and the Tesla supercomputing processor."

For the three-month period ending on October 26, NVIDIA's profits sank by a 74% to $61.7 million, working out to 11 cents per share. In the same quarter last year, NVIDIA turned a tidy $235.7 million in profit.

NVIDIA has big expectations for its 9400M notebook GPU that it believes could capture as much as 30% of the notebook market. At this point NVIDIA has to be hoping the new GPU will help pull it back into its past financial performance.

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Lack of confidence
By SavagePotato on 11/7/2008 11:43:06 AM , Rating: 5
For me Nvidia represents a lack of consumer confidence. I previously owned three generations of Nvidia graphics cards in a row since the days of my ati 9700 pro. The 6600gt, the 7900gtx, and the 8800gts 512. As well I previously owned Nvidia based chipsets for my Athlon based computers.

When Vista came out I nagging problems with my Nvidia chipset which at the time seemed expected, that is till I switched to an Intel chipset and saw how a proper chipset with proper drivers performed even at the same early days of Vista.

Add to all this the stats released by Microsoft revealing what an absurd number of Vista blue screens were actually caused by Nvidia drivers. My p965 system at home has never so much as hinted at a blue screen despite a highly overclocked processor, however my little nvidia board at work despite working fine for a long time actually randomly bluescreened, the Vista solution database was actually able to identify the nvidia storage driver as the problem and suggest a driver update. With my enthusiast class Athlon board I actually had raid corruption in Vista that went away with the Intel raid controller, on the same disks.

Drivers were something I already had a grudge with Nvidia for since I waited over 6 months from the time I got my 8800gts 512 till nvidia finally released a new whql driver for it that wasn't a beta aimed at improving crysis fps for benchmarking reviews.

Having read the news about Nvidias defective 8xxx series notebook parts and the way their ceo has been stepping on his own tongue lately, has led me to lose alot of confidence in their product. All this combined to the point I would go out of my way to not get a notebook computer especially with Nvidia hardware in it.

I have been enjoying the monthly release schedule of drivers for my newly purchased and very impressive ati 4870x2 without looking back at all at Nvidia.

Based on how their financial situation is doing, perhaps there are a few more former Nvidia customers in my position.

RE: Lack of confidence
By AssBall on 11/7/2008 12:04:53 PM , Rating: 5
...perhaps there are a few more former Nvidia customers in my position.

I'd wager there are! After having both an AGP and a PCI-X 6800GT die on me, and fighting with my 7600GT drivers and screen defects, I had zero qualms switching to AMD HD3850's for my next upgrade. I've been really happy with them since.

RE: Lack of confidence
By Cypherdude1 on 11/13/2008 11:10:55 AM , Rating: 2
The bad drivers issue is nothing new to nVidia. nVidia has been writing bad drivers for a long time. I have a perfectly good but older video card I was forced to remove because nVidia has really lousy drivers for WinXP.

I was forced to buy an ATI video card and I lost $170 (!!!) because of nVidia's lousy drivers! ATI definitely writes better drivers. While nVidia does have the only 4-monitor video card, the Quadro NVS 450, I would only use it on a 32-bit XP Pro system.

nVidia also writes poor BIOS and drivers for their 700 series chipsets. Google for video problems and you'll find them. Here's a thread for a large number of (un)satisfied customers. There are 58 pages and over 1700 posts. B ^D

These driver problems seem to highlight a minimalist philosophy regarding drivers at nVidia.

RE: Lack of confidence
By kilkennycat on 11/7/2008 12:24:15 PM , Rating: 2
Having read the news about Nvidias defective 8xxx series notebook parts and the way their ceo has been stepping on his own tongue lately, has led me to lose alot of confidence in their product. All this combined to the point I would go out of my way to not get a notebook computer especially with Nvidia hardware in it.

Correction. The notebook chipset with the faulty bond material was previous to the 8xxx series.

Also, HP was the company that took the biggest hit from the bond-material failures. However, they and several other companies, (including Apple !) have just announced a series of Intel-processor notebooks based on the nVidia 9400M chipset. Apparently instantly taking 20% of Intel's notebook chipset market in the process. Seems as if nVidia has somehow overcome Apple's traditional 3rd-party caution and HP's previous bad experience.....

RE: Lack of confidence
By SavagePotato on 11/7/2008 12:37:02 PM , Rating: 2
Doesn't overcome my lack of consumer confidence.

I still won't buy one of those notebooks simply because it has Nvidia parts in it. No thanks.

RE: Lack of confidence
By AlexWade on 11/7/2008 3:58:37 PM , Rating: 2
My opinion of NVidia has taken a huge plunge. I used to want them for everything because it everything worked well, the chipsets, the graphics, everything. Now, NVidia drivers are sorry and inferior. I discovered that NVidia drivers are the reason behind tons of BSOD. Until NVidia gets on the ball with drivers, I'm going Intel or AMD chipset, AMD graphics.

RE: Lack of confidence
By Lakku on 11/7/2008 6:13:49 PM , Rating: 2
nVidia chipsets and drivers are bad, but don't think switching to AMD for graphics will be a lot better, if any. They both have issues with certain things and AMD has certainly been releasing a lot of hot fixes for every new game coming out. And while it effects very few of the PC population, Crossfire is still far behind SLi, all of which is in the drivers for the most part, in terms of usability and how often it works on any given game. But to each his own I suppose, I will never own an nVidia chipset for a desktop again, but I will also probably never use an AMD/ATi graphics card again either.

RE: Lack of confidence
By teldar on 11/9/2008 8:38:32 AM , Rating: 2
I don't know that their hotfixes are about stability. The initial post was regarding stability.

The hotfixes are more about performance for the TWIMTBP games that are coded for nvidia cards.

RE: Lack of confidence
By Ihmemies on 11/7/2008 4:20:37 PM , Rating: 3
I've also had horrible experience with nvidia recently. Everything was fine and dandy when I tried nothing hardcore with my pc - like creating a raid array.

Well.. Nforce4's raid support plain sucks. Also my 7800GTX gave up the smoke after 3½ years of use. Drivers haven't bought much happiness either after nvidia moved to the horrible .NET control panel.

My next buy will not include nvidia parts. I don't know if grass is greener on other side of the fence, but I'll never know without trying.

RE: Lack of confidence
By psyph3r on 11/7/2008 4:43:44 PM , Rating: 2
I had been pure nvidia since the geforce 3. with all the troubles lately, i bypassed the 9800 for the 4870 and a 790FX. I'm very happy with the results after 6 months

RE: Lack of confidence
By RockinZ28 on 11/7/2008 7:31:41 PM , Rating: 2
Shrug, mines been fine. Cheaper nForce6 650i board, raid 0 raptors, dual boot Xp Pro 32 and Vista64.
E6600 @ 3.4ghz, ddr2-800 @ 1000mhz.
Gone through a 7900gs, using a 8800gts 512, and am planning another gfx upgrade very soon. Never had any bsod or stability issues, though I did add a Tuniq 120, and better NB and SB heatsinks and fans.

RE: Lack of confidence
By Bigjee on 11/9/2008 3:25:01 PM , Rating: 2
Having read the news about Nvidias defective 8xxx series notebook parts and the way their ceo has been stepping on his own tongue lately, has led me to lose alot of confidence in their product. All this combined to the point I would go out of my way to not get a notebook computer especially with Nvidia hardware in it.

Just the 84XX and 86XX products. The 8800GTS G92 product you own does not suffer from the same defects. Most products effected are for the Laptop variants. I have been using Nvidia for a long time also (7950gt, 6600 GT, and the 8800 GTS G92) and they have all served me well. When the 8800 GTS was launched there was no worthy competitor (ATi especially ) that had a high end card to match the performance. The Ultra and 8800 GTX were king at the time. Now when the 4800 series is launched you shouldn't bash Nvidia for being a low quality manufacturer and having bad customer support.

And now with the 9400M (i've read reviews on MB's and MBP's and everyone is very happy with their 9600 and 9400 cards/chipsets. There are no driver issues or blue screening.

Don't get me wrong no manufacturer is perfect. But Nvidia still has me as a customer. I will continue to buy their products for as long as they are good.

If nVidia is losing money...
By quiksilvr on 11/7/2008 11:19:52 AM , Rating: 3
I wonder how ATI (or AMD whatever) is doing...

RE: If nVidia is losing money...
By Clauzii on 11/7/2008 11:35:32 AM , Rating: 1
Better :)

RE: If nVidia is losing money...
By Clauzii on 11/7/2008 9:49:59 PM , Rating: 2
My bad :D

But I've used ATI through some years now, and are happy they are doing great.

AMD needs to kick some very good CPUs into the market or they'll get too much behind. To compete with Core was pretty ok. To compete with Nehalem will be a nightmare AMD needs to solve.

RE: If nVidia is losing money...
By Flunk on 11/7/2008 11:35:59 AM , Rating: 4
Nvidia is not losing money, their profit is down to $61.7 million for the last 3 months. Read the article before commenting.

By kilkennycat on 11/7/2008 12:08:23 PM , Rating: 4
Huh? nVidia did NOT lose money last quarter. The net profit after all expenses was $61 million. FYI: nVidia also has ~ $1.5 billion in Cash plus short-term investments and ZERO debt - a very important issue with regard to product-direction freedom in today's phenomenally-tight credit markets. Having cash on hand and no creditor influencing product and employment decisions is going to be very important in avoiding the worst excesses of the recession. AMD, on the other hand has $3billion NET debt. AMD net loss last quarter was ~ $67million - a lot better than the previous quarter (ATi was apparently profitable), but the balance sheet was bolstered by some large asset sales during the quarter.

FYI at today's stock prices, AMD (inc. ATi) is worth ~ $2billion and nVidia ~ $5billion.....

RE: If nVidia is losing money...
By FaceMaster on 11/7/2008 2:08:18 PM , Rating: 1
It's a recession! Of course people are going to spend less.

Even in the fake world of Internet.

RE: If nVidia is losing money...
By FaceMaster on 11/7/2008 2:08:20 PM , Rating: 1
It's a recession! Of course people are going to spend less.

Even in the fake world of Internet.

RE: If nVidia is losing money...
By Targon on 11/7/2008 7:39:58 PM , Rating: 2
AMD had been losing money for a while as a whole, mostly due to the CPU division underperforming. But, now that the ATI merger has meshed, we are seeing some huge improvements thanks to the success of the Radeon 4800 series of graphics products.

So, last quarter AMD pulled a profit, and the big question is if AMD can pull another profitable quarter. With any luck, the 45nm Phenom processors will also provide a needed boost to the CPU division as well.

When it comes to stock purchases, it is a very difficult time to decide if/when to buy. AMD is trying to spin off the fab business, but it is unknown if this will happen(foreign regulations), or if it will even benefit AMD in the long term.

RE: If nVidia is losing money...
By Clauzii on 11/7/2008 10:11:05 PM , Rating: 2
AMD really needs to up the Phenoms more than a 'usual' 10-20% if they want to compete with Nehalem. Nehalem has some almost scary figures if You look at rendering, 3D and encoding/decoding being up to >3 times faster than current Phenoms.

Intel just showed that the same GHz-number can give a MUCH faster CPU if done right (Just like AMD did when they entered the scene years ago with K6-II and K7).

I think it would be time for AMDs 'Fusion'; A single chip, say a 4 core Phenom and some hundreds of 'ATI-shaders' to boost calculations AND/or provide GPU functions. (would boost calculations even if they kept the shaders at current GPU speeds). Also with, maybe, a 4-channel DDR3 interface and some faster CPU-CPU interconnection than the current ~3GB/s (Nehalem ~25GB/s!) and a bigger L2/L3 cache.

AMD, Your move...

RE: If nVidia is losing money...
By teldar on 11/9/2008 8:43:50 AM , Rating: 2
The number of GPU cores they could put on a cpu die which already has 4 CPU cores would be minimal. And I don't know that there is enough software out there to take advantage of that even existing. It's more about saving money on the chipset and bundling it all into a more complete processor package.
I do agree that they're going to need more bandwidth when they start packing those GPU cores into their CPU's.

RE: If nVidia is losing money...
By Clauzii on 11/9/2008 2:10:04 PM , Rating: 2
When they change to 45nm, the extra space could be for those 'shaders'. AMD could even brand it 3DNow-Pro (or something), and make it an extension to the opcodes like SSE and MMX was too. I don't really see a big problem doing that?!

By strmbkr on 11/7/2008 11:40:43 AM , Rating: 1
As a Nvidia supporter, this is what I will/can say.

NOOOOOOOO!!! (Darth Vader style from RoTS)
Chinese bootleg translation: Do Not Want!

By Fant on 11/7/2008 2:16:29 PM , Rating: 2
You guys dont think this has to do with the fact that nvidia releases new chips/video cards at a much faster rate and most of their cards are fast enough for most games now? Therefore its probably harder to get people to upgrade to the newer cards. This leaves alot of inventory unsold.

By Pirks on 11/7/2008 7:23:56 PM , Rating: 2
Exactly. Most games are console ports nowadays, how the heck was nVidia going to survive in such conditions? Hard to believe nVidia executives were so dumb that thay didn't see that coming. When PC gaming turns into console ports gaming (as it is happening now) nVidia starts to sink, this is just a law of economics. Nothing to do with "bad nVidia drivers" or stupidity like that.

On the other hand it's good for us PC gamers. No more GPU upgrades for a few years, until next gen of consoles appears. W00t

By MamiyaOtaru on 11/9/2008 11:08:05 PM , Rating: 2
I happen to find that possibility terrible. You want console ports go play on your beloved console. I'll take continual advancements and the abililty to mod things, thanks

By Pirks on 11/10/2008 7:25:17 PM , Rating: 2
What's the problem with modding a console port?

By MamiyaOtaru on 12/3/2008 12:48:44 AM , Rating: 2
They're not built with moddability in mind, and you are still ignoring my preference for seeing things advance graphically and otherwise rather than stagnate for a few years.

No SLI for most
By Dribble on 11/7/2008 11:34:20 AM , Rating: 2
Obviously the main reason for Nvidia's loss is Ati finally getting competitive, and the dodgy mobile chips can't have helped. However it's also got to be a problem that the only SLi motherboards available are expensive and unreliable, and hence nearly no one has one.

As an 8800GT owner my best upgrade currently is a 2*4850 in Xfire as my motherboard like most out there supports Xfire, but if I had Sli it would be much cheaper to just chuck a second 8800GT in.

X58 can't come quick enough for Nvidia I suspect - not that I have much sympathy with Nvidia - it was there choice to restrict SLi.

RE: No SLI for most
By Lakku on 11/7/2008 6:18:50 PM , Rating: 2
As stated above, unless you meant a loss in total revenue, nVidia did not have a loss. AMD has lost money in every quarter now for probably 2 years. But yes, competition does hurt the bottom line, but am glad it's there. Waiting for X58 myself, as I refuse to use nVidia chipsets again, but SLi is much better than Xfire, plus I have a hard time wrapping my head around putting a pair of cards in their that average 65-70C temps at idle. Did they ever fix that?

RE: No SLI for most
By Pirks on 11/7/2008 7:28:33 PM , Rating: 2
Console ports fixed that already by eliminating the need for ultra high end GPUs

RE: No SLI for most
By teldar on 11/9/2008 8:47:00 AM , Rating: 2
Actually, you could get the 4870x2 as your best upgrade, however, perhaps not your most cost effective upgrade.
And you wouldn't need two individual cards, just one.

The comments on here are crazy
By Slappi on 11/7/2008 9:24:37 PM , Rating: 2
This us part of the problem with the world today.... just on a smaller scale.

Some of you guys read things like "NVIDIA Sees Q3 Profit Plummet" and start spouting crap like that is completely wrong.


Nvidia is doing great in the middle of a recession and their desktop GPU ASPs are actually up QoQ. That means the ATI 4800 effect is about over.

Also Nvidia has a strong balance sheet while AMD/ATI might not even be in business in a year or two. (Which would suck)

Kudos to ATI for releasing a great GPU which has hopefully kicked Nvidia into gear but sheesh your not going to have sex with your ATI card.

Tired of all the misinformation spouted by people. If you have no idea what you are talking about just STFU!

RE: The comments on here are crazy
By Clauzii on 11/7/2008 10:17:14 PM , Rating: 2
"...but sheesh your not going to have sex with your ATI card."

If Ruby was on... Hell yes!! :D

RE: The comments on here are crazy
By teldar on 11/9/2008 8:55:25 AM , Rating: 2
How is it you know that the '4800 effect' is almost over? While it's true that nvidia is trying to get the gt200b out there, a little rudimentary logic tells me that they're making money on the mainstream segment, not on the ultra high end cards. The fact that their asp's are up indicates that they are selling some high end but also that the mainstream cards are so much better than low end now, that people are willing to spend the extra $20-30 to get significant improvements.

Since the 8800/9800 whatever they want to call them 55nm chips have been out for a while and still are not quite as fast as the ATI boards, frequently even with twimtbp, I would imagine that ATI is still going to have a decent market share until they both refresh in q2 next year. Then we'll have to see what happens.

By Clauzii on 11/7/2008 11:51:41 AM , Rating: 2
They do still make a profit though in spite of the problems they had, so they should be satisfied overall.

By homernoy on 11/7/2008 12:30:58 PM , Rating: 2
That is producing a new architecture even though the competition is really in no position to compete with the current product.

Thank goodness there is competition in the GPU market now; and to think if Nvidia would have kept pushing, rather than sitting on the 8 series architecture for soooo long, they would be a gen ahead now and more profitable today. A side effect of this, of course, would have been Nvidia's profit the last couple of years being less than what it was.

nvidia fanboy
By g35fan on 11/7/2008 11:09:11 PM , Rating: 2
I've always liked Nvidia. mx440, 6600, 6600gt, 6800gt, 7900gt, 8800gts, 8800gt 512, gt260.

I've been more than happy with every single card i've ever purchased. Never had any cards die on me or had any major problems with drivers. I'm sure ATI has some good offerings right now but until Nvidia pisses me off I won't even consider switching. If Nvidia's sales are down it's just probably because the 8800 series were too good. Everyone got one and then has had no reason to upgrade since.

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