NVIDIA Facing ‘Serious Competition,’ Says Analyst

July 26, 2011

NVIDIA graphic processing units (GPUs) might experience weaker sales during the second quarter of the fiscal year, according to UBS analyst Uche Orji. The analyst also believes that the market for application processors, an example of which is NVIDIA’s Tegra line of system-on-chips, has serious competitors that NVIDIA has to contend with.

Orji based his analysis on the Q2 fiscal reports revealed last week by chipmaker Advanced Micro Devices (AMD). Orji’s conclusions about NVIDIA’s market performance, though, seems to come not from GPU-based competition per se but from a generally weak market. Orji observed the 11% decline of AMD’s GPU sales from quarter-to-quarter, which, in Orji’s thinking translates to about 2% quarter-to-quarter decline in sales of NVIDIA GPUs.

The analyst sees a decrease in NVIDIA GPU sales for Q2–that is, US$553 million, in comparison to last year’s US$564 million. NVIDIA’s Tegra processors, the Tegra 3 in particular, may even find a tougher year in 2013, with Orji’s modelling US$417 million for the fiscal year. Orji explains the possible contributory factors to NVIDIA’s lower sales figures:

  • Google’s preference for Texas Instruments processors for its next Nexus reference handset, which is expected to come packed with Android 4.0 Ice Cream Sandwich.
  • Texas Instruments (TI) has ramped up the clock speed of its OMAP 4 processors a few gigahertz higher–from 1.5 GHz to 1.8 GHz. NVIDIA may follow suit, and that would consequently mean the company has to allocate resources just to match what TI has achieved in processor clock speeds.
  • Qualcomm’s taunting announcement of the upcoming availability of its 4th-generation Snapdragon system-on-chip–the MSM8960–a dual-core, Krait-based chipset running at at least 1.5 GHz and promising 5 times the performance of the original Snapdragon. The new Qualcomm chip, says Orji, will most likely limit Tegra 3′s window as preferred processor for applications.

By the looks of it, we’ll probably not be seeing a Tegra 3 and Ice Cream Sandwich (ICS) tandem before the year ends. Are you okay with a TI and ICS partnership?

(Source: Tech Trader Daily)

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