Print 97 comment(s) - last by sonofbc.. on Jul 11 at 10:29 AM

Storm clouds are gathering as NVIDIA faces a reinvigorated competitor

As the old saying goes, when it rains it pours.  NVIDIA was performing beautifully thanks to aggressive pricing and performance of its 8000 series of graphics cards.  It looked poised to leave competitor AMD (formerly ATI) in the dust.  However, the latest round in graphics war has marked a dramatic turnaround with AMD's 4850 and 4870 outperforming NVIDIA's offerings at a lower price

While NVIDIA still holds a tenuous grip on the highest end offerings, with its GeForce GTX 280 GPU, this might soon slip, depending on the performance of AMD's dual processor 4870 X2 (R700) card, likely coming in Q3 2008.  Meanwhile, NVIDIA faces challenges from Intel in its low-end and laptop graphics offerings, and from AMD's PUMA chipset/graphics package in the laptop market.

The economic repercussions of NVIDIA's slippage are already visible.  NVIDIA announced yesterday that it was going to turn in revenue of $875 million to $950 million for Q2 2008, which ends July 27.  This is significantly lower than the current analyst expectations of $1.1 billion.

That was not the end of the bad news from NVIDIA either.  It announced that it was facing a massive recall, due to overheating GPUs in notebook computers.  NVIDIA reported higher than average failures in both the laptop GPUs and in laptop chipsets.

NVIDIA said that the chips and their packaging were made with materials that proved to be too "weak".  NVIDIA passes the blame to notebook manufacturers, which it says contributes to the problem.  Typically notebooks have poorer ventilation and components concentrated in a smaller space than desktop computers.

The result of the recalls is that NVIDIA will be taking a onetime charge of $150M USD to $200M USD to cover the damages.  It plans to use the money to repair or replace defective parts.  It also hopes to collect part of the money from insurers it uses.  However, it has acknowledged its problems and switched the materials it uses.

The news has resulted in NVIDIA taking a beating on the stock market, sliding over 25 percent.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

Nvidia will bounce back
By tviceman on 7/3/2008 11:30:16 AM , Rating: 2
The gtx200 series isn't the travesty that the 5800fx cards were, but they definitely missed the mark with their newest offerings.

This is great for us consumers, though. AMD/ATI absolutely had to have a highly competitive product with the 48xx series, otherwise they might have surrendered completely to the high end/mid range graphics market. Nvidia can withstand a few bad quarters and get right back on track - which I'm confident they will. The next video chipset they release will likely have much more value and performance improvements.

RE: Nvidia will bounce back
By homerdog on 7/3/2008 11:57:04 AM , Rating: 2
Not only did NVIDIA miss the mark (RV770 comes too close to GT200), but given the market reaction it appears they were aiming at the wrong target ($650 for a graphics card? *_* ).

RE: Nvidia will bounce back
By adam92682 on 7/3/2008 12:16:25 PM , Rating: 2
I would have no problem paying $650 for a card if it could run crysis with a minimum fps of 60 on very high.

RE: Nvidia will bounce back
By homerdog on 7/3/2008 1:04:54 PM , Rating: 2
Right, but most gamers just can't afford to spend that much on a single component regardless of how fast it is. AMD has captured a large audience with RV770, a chip that can compete with the best of the best from NVIDIA in its $300 incarnation while still being profitable and darn fast when put on a $200 card.

RE: Nvidia will bounce back
By jeromekwok on 7/4/2008 3:21:02 AM , Rating: 2
See ATI came back with 4800 performers with a very aggressive pricing. I would not surprised to see a Radeon 4650 with 400 shaders outperforming 9600GT at a lower price tag. This will make Nvidia very difficult to move 9600 and 8800 cards.
Nvidia will not have DX10.1 cards until next year.

"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Laptop or Tablet - Which Do You Prefer?
September 20, 2016, 6:32 AM
Update: Samsung Exchange Program Now in Progress
September 20, 2016, 5:30 AM
Smartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki