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Nvidia Made $5 Billion During a GPU Shortage and Expects To Do It Again in Q1 (theverge.com) 67

Posted by msmash from the closer-look dept.
Nvidia has shared its Q4 2021 earnings, and despite the company's GPUs being in extremely low supply, it didn't seem to hurt how much money the company made. From a report: In fact, it reported a record $5 billion in revenue, which is up 61 percent year-over-year. What's more impressive is that Nvidia expects to make another $5 billion in revenue during Q1 2022. This positive outlook is surprising given that Q1 is generally slower than other quarters, even for the biggest tech companies, as it follows the rush of people buying lots of products during the holiday period. It's generally a slower period in general for product releases across tech and gaming. Also, let's not forget the GPU shortage is still happening. Nvidia reiterated that sparse supply will continue through the next quarter, but that's likely factored into its rosy revenue prediction.

Nvidia says it expects most of that $5 billion revenue estimate in Q1 2022 to come from the gaming market, despite being the segment it's currently having the toughest time serving. Since the launch of the RTX 30-series desktop graphics cards, leading with the RTX 3080, 3090, 3070, and followed by other products, Nvidia hasn't been able to meet the demand -- though it's not the only company affected. AMD has also struggled, perhaps more than Nvidia, to keep a steady stock of graphics cards heading to retailers.
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Nvidia Made $5 Billion During a GPU Shortage and Expects To Do It Again in Q1 More

Nvidia Made $5 Billion During a GPU Shortage and Expects To Do It Again in Q1

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  • they'll rake in the cash like crazy. Between PC gaming doing great, making the Switch's chipset and freakin' crypto miners they've got a license to print money.

    • Re: (Score:2)

      by Guspaz ( 556486 )

      3dfx was worth ~$80 million when they went bankrupt. Nvidia is a $347 billion company. Slight difference in scale. Gaming hardware is also only around half of their revenue, and shrinking as a relative proportion. Their data center segment is growing rapidly, and many of their acquisitions are focused in that area.

      • Well the whole scale of computing was much smaller. Any predictions need to be placed in a relative framework.

      • would be awfully nice if they used 1 millionth of one of those billion to get me that card i ordered almost 4 months ago - i especiallly like the newsletters they keep sending announcing NEW rtx versions and ETH miner cpu's ... it gives me great hope that they're working hard on getting me my card ... doctor watson ... american, i presume ?

        • Re: (Score:2)

          by Guspaz ( 556486 )

          Those new miner cards, while a terrible and anti-consumer thing, are Turing and not Ampere, so they actually might make some improvement in availability of Ampere GPUs. They're not competing for the same fab resources since IIRC they're TSMC 12nm chips rather than Samsung 8nm like Ampere.

          • thats good to hear, although i have like a gut feeling the chinese might just buy both stocks to depletion afterwards since im sure there's more than ETH to mine and the current liquidity problem in BTC (which was to be expected if the big boys started buying) which will probably only get worse as the miners have sold their bills for the year and everyone can see BTC topping 100k for real this year (its not that far fetched anymore, is it?) - the smallfry and guttertrash into dot and link and zrx (or even d

    • they've got a license to print money.

      A license perhaps but they have to rent time on the printers (if the world ever goes to RISC-V, we could be buying TSMC-branded chips).

  • Wait, is this reporting from the future?

    Or are they reporting on Q1 of the financial year, in which case it was the summer of last year(?) and not the only-half-way-through Q1 of this year.

    • Re: (Score:1)

      by Cederic ( 9623 )

      Actually no, I'm just confused. Q4 2021? No.

    • Re: (Score:3)

      by Guspaz ( 556486 )

      https://nvidianews.nvidia.com/... [nvidia.com]

      nVidia's fiscal 2021 (Q4) ended January 31st, 2021. They are currently in Q1 of FY2022.

      • Re: (Score:3)

        by Cederic ( 9623 )

        Thank you. Apologies for being too lazy (and distracted) to go hunting that information myself.

    • Wait, is this reporting from the future?

      With billion-dollar valuations for companies who generate millions in losses, this wouldn't surprise me in the least.

      We call it "speculative" finances. Marries well with meme stock markets.

      • Re: (Score:1)

        by Guspaz ( 556486 )

        Their valuation is hundreds of billions of dollars, and they're producing billions in profit, pretty far from "millions in losses".

        • Their valuation is hundreds of billions of dollars, and they're producing billions in profit, pretty far from "millions in losses".

          I was more making light of other companies. Snap, Inc. went public with hundreds of millions in losses, and an S-1 filing that included "We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability." The end result? A hyped valuation in the tens of billions, and $300M in losses as of last quarter.

          And little makes sense with the current hyped stock market during a global pandemic. Meme stocks are just the cherry on top of t

    • Some companies do not align their fiscal time periods with calendar time periods. Their Q1 2021 might have started in 2020.
  • Unfortunately I believe these kinds of shortages will continue well into the future until more players enter the graphics card market again. Nvidia is being served well by these shortages and it's these kinds of profits that will only further discourage them from increasing supply (and I think they're well capable of doing so, even though it would take time). Therefore the only remedy is to have more graphics card manufacturers enter the field or increase supply, and we know the latter isn't likely to happe

    • Well there's AMD, and Intel. How many more players are needed? Never mind we just gotten through with a chip shortage story, so any new players will have to be building their own fab to not aggravate the problem.

    • Re:Only a problem for us (Score:5, Informative)

      by Dayze!Confused ( 717774 ) <slashdot DOT org AT ohyonghao DOT com> on Thursday February 25, 2021 @11:41AM (#61099086) Homepage Journal

      The supply issue isn't Nvidia, it's TSMC and the lack of more fabrication facilities. Nvidia purchases as much time as TSMC is able to sell them, but between Nvidia, AMD, and other customers TSMC is running non-stop and there isn't more room to add in more silicon. More facilities need to be built to increase supply, which are not only multi-billion dollar investments in facilities, but also require the engineering talent to run and know-how to run. TSMC has plans for a facility in Japan, and I believe in Arizona also. Once more facilities are built they can ramp up production and their customers can get increased supply. Until then there isn't much Nvidia can do to increase its own supply.

      Nvidia doesn't make more money by Newegg selling the GPU for $900 instead of $700, they sold the chips to the third party PCB's who then sell to Newegg and others for distribution. Their profit is already locked in at the price they are wholeselling to these manufacturers, not based on the retail price consumers pay. If they could sell more of these to third party PCB's they would make more money.

      More GPU manufacturers won't solve it unless they source their silicon manufacturing elsewhere, but there isn't really much supply elsewhere to be had. Adding in more GPU's but at the same facilities would fragment the limited capacity more, making the situation worse rather than better.

      • I've been hearing that it's not all about the chips. Apparently there are a lot of components in short supply, like capacitors.

        • I think you've been hearing wrong. There are many market choices for capacitors and shortages and production issues at the moment are almost exclusively limited to silicon providers. SIs are literally producing cards by the thousands the second they get a shipment from NVIDIA. Companies suffering shortages are NVIDIA, AMD, or companies waiting on either of the two including Sony and Microsoft.

          The shortage is specific to 7nm and 40-65nm production facilities at present. Some of the latter include supporting

      • TSMC's basket is full so there is no room for more eggs.

        There's an old proverb about this, it's just on the tip of my tongue.

        • TSMC's basket is full so there is no room for more eggs.

          It might be time for the East Asians to weave some more fucking baskets (cha-ching).

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            I imagine the threat of sanctions from the world's largest market had a cooling effect on multi-billion dollar expansion projects.

      • Nvidia isn't making their consumer GPUs at TSMC. Outside of their data center card (GA-100), Ampere dies are being made on Samsung's 8nm process. I don't know if the wafer availability is any better with Samsung, but judging by the fact that the 3080 and 3090 are still being sold online for several hundred dollars over MSRP it would suggest that the demand still vastly outstrips supply.

        What may have happened is that Nvidia sold a lot of cards at a markup to some wholesaler that was just going to sell the

        • Nvidia isn't making their consumer GPUs at TSMC. Outside of their data center card (GA-100), Ampere dies are being made on Samsung's 8nm process.

          Finally, someone in this thread who actually knows what they're talking about. I reckon the reason NVIDIA went with Samsung instead of TSMC is simple economics - NVIDIA uses Samsung for some of its mid- to low-end GPUs in the previous generation, which worked out alright, and TSMC has already increased wafer prices. I do wonder though what Samsung's yields are on chips as large and complex as Ampere, though - but it doesn't really matter, because it's not like NVIDIA can whistle up TSMC and buy more capacit

    • Considering that NVidia is planning to make 3000 series cards just for cryptominers, it is a little bit of a slap in the face for those of us who haven't been able to buy any gaming cards. NVidia is trying to spin it as these cards will are to alleviate the supply constraints as they could not have been used for gaming anyway but previous attempts by Linus showed that even without a video output, he could game on a previous generation with some work. All this does is create a segment of cards that most cons
      • I saw a picture of the die the other day, was clearly different from the chips in the RTX 30 series. And since it is a new chip, platform and concept, there is no "previous generation" for anyone to have tested anything on.

        You're right that miners would still snatch up all the chips (the bastards), but there's also rumors that Nvidia will be nerfing the RTX's ability to calculate crypto hashes.

        • If it is a new die, wouldn't that mean NVidia had these chips specially made taking up valuable slots in TSMC's plants?
      • Why should NVIDIA stop designing and producing cards simply because of external market forces? If they can harvest Ampere dies into mining cards instead of throwing them away, there will be more cards in the total pool available for miners and ordinary consumers, so everyone wins.
        • Did you understand my point in that it is only NVidia's word that these cards cannot used as consumer gaming cards when previous cryptominig versions have found that not to be technically true.

    • Re: (Score:3, Insightful)

      by The_Assimilator ( 7344480 )

      Nvidia is being served well by these shortages

      No company is served well by not being able to sell as much product as customers demand. NVIDIA hasn't increased its GPU prices at all during this storm, it's the scalpers and miners we have to thank for pushing those through the stratosphere.

    • Unfortunately I believe these kinds of shortages will continue well into the future until more players enter the graphics card market again.

      More players just means more competition for the already limited production capacity.

      Nvidia is being served well by these shortages and it's these kinds of profits that will only further discourage them from increasing supply

      They're served well by their inability to sell products?

      Therefore the only remedy is to have more graphics card manufacturers enter the field or increase supply

      What do you mean by "graphics card manufacturers"? Are you talking about companies like Gigabyte, Asus, etc.., companies like nvidia and AMD or fabricators like TSMC, Samsung?

  • .. when the crypto crash happens, mining grinds to a halt and dumps massive amount of high end GPUs onto the resale market?
    Huge hit to new GPU sales to miners and serious competition for every segment below the high end as those top tier used boards are competing with new mid-range product for sales to everybody else including gamers.
    We'll instantly go from a severe shortage to glut.

    • Let's put it this way. Beyond wishful thinking any foundations to the rumors of a cryptocrash?

      • Re: (Score:1)

        by Anonymous Coward

        Beyond wishful thinking any foundations to the rumors of a cryptocrash?

        The previous "cryptocrashs" we've seen already?

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        In terms of mining, it has to happen. Higher mining profits means more people mining, which means either an increase in difficulty or an increase in supply and concomitant decrease in price. Either way, profits go down.

        Supply and demand means that in a competitive market you can't just sit there raking in fat profits, and crypto mining is a competitive market. So when the difficulty goes up, price comes down, or a combination of the two, people who don't have access to ultra cheap electricity will fall belo

        • "Supply and demand means that in a competitive market you can't just sit there raking in fat profits, and crypto mining is a competitive market"

          But there's no "market" as such; it's entirely artificial. Someone could create a blockchain tech where you can mine 200 coins a second on a Core2 Duo right? There's nothing inherent to the technology where you need a $3,000 GPU to mine coins--other than the artificial constraints of whatever algorithms it's using for crypto.

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            There are people buying and people selling, which makes it a market. You might think it's an irrational market (I tend to agree), but it's still a market.

            I suspect that the proof of work system will eventually die, but it looks like it's going to be a while yet. In the meantime, so long as cryptocurrency is volatile the demand for mining hardware will bubble and burst.

          • If you are going to use that argument, then you can also use the argument that the entire gaming market is artificial - games can, after all, use shitty graphics, physics etc that dont require the latest greatest card...

    • Sales drop for a few months then rebound when the new model comes out.

  • cryptomining? (Score:5, Insightful)

    by Xylantiel ( 177496 ) on Thursday February 25, 2021 @11:36AM (#61099068)

    Don't we already know that some of the shortage is being driven by cryptomining? i.e. There is a shortage of gaming graphics cards because they are being bought up by the cryptominers as the bitcoin pyramid stacks higher. There is a good argument that the market dynamics determining the cost of bitcoin right now are the interplay between the pyramid schemers and the price of a GPU and the power to run it. The current average transaction fee is like $25, and my impression is that the way the miners work currently they take that and spend most of it on hardware and power and take a cut. (Yes this means if you want to buy a cup of coffee with an actual bitcoin transaction, not using a broker where they combine transactions in some way, you pay $25 just for the transaction. Bitcoin is currently nearly useless as a medium of exchange.)

    And the difficulty scales in order to keep the total products of mining getting smaller at a specified rate over time. So if NVIDIA produced twice as many GPUs they would still be scarce because the mining difficulty would just be scaled up to account for the increased computation. Can we all agree a proof-of-work deflationary cryptocurrency was a bad idea and move on?

    So when bitcoin finally does crash, there will also be a big glut of used GPUs as the miners try to cash out their rigs.

    • Couldn't this be because of the lack of proper competition in the GPU market? There only are a few vendors, who make stuff in a few foundries, and isn't Nvidia the hugely dominant one? Aside from the demand in bitcoin, which I find it a bit odd people would be buying GPUs for when I thought I heard they were going to weaken the GPUs for that use? Besides, don't we have special processors for bitcoin for years now that were supposed to lower the GPU demand?

      The pandemic is impacting most industries and gami

      • AMD has the exact same supply constraints as NVIDIA.

      • but can their size let them create or exploit shortages where AMD simply can't step in to fulfill that short term demand?

        AMD's supply shortages are the reason for the PS5 and Xbox shortages. They have their own problems to deal with. Also you're presuming people want an AMD card. While in raw performance they are matching NVIDIA they are being thoroughly outclassed in all things AI, ray tracing, encoder performance and features.

        • Thanks for the info, I'm not tracking the stuff; but 2 main GPU companies; just a few foundries. Not much diversity for competition or for handling supply issues. All of them can game the market or collude to some degree... I remember the RAM industry doing it until they likely discovered how to not get caught and punished. Don't assume there are not people in high places paying attention to the public court records of such things; I would not be surprised if in the future we had foundries or GPU or even c

    • Re: (Score:2)

      by crtreece ( 59298 )
      Can we please stop with the played out story of people buying GPUs to mine bitcoin?

      Mining bitcoin with a GPU hasn't been viable for years, the first mining ASICs came out in 2013 and have been improving ever since. Someone could run mining software on their GPU, but it's unlikely they would ever actually solve a block if they are solo mining. If they're mining in a pool, any share they would earn is going to be minuscule because their hash rate as a percentage of the pool will be approaching zero.

      • GPUs are used to mine various altcoins, which are then traded for Bitcoin (which gets traded for real money) or traded directly for real money. The entire thing is just one big elaborate scheme to turn wasted electricity into money from suckers.

  • The downstream manufacturers in general (for anything, from floor tiles to car and aircraft spares) are keeping larger inventories, since the upstream factories are running balls to the wall and anything you order now, will take 6 months to a year to arrive.

  • we might as well get some technical investment out of the gamers and cryptominers. what's the problem here exactly?

  • RTX 3060 launches today . . . and it's gone (Score:3)

    by UnknowingFool ( 672806 ) on Thursday February 25, 2021 @11:52AM (#61099136)
    Gamers Nexus posted their review of the RTX 3060 [youtu.be] that is supposedly launching today. Summary: it is in mostly between a 2070 and a 2070 Super in performance. At $329 suggested MSRP, GN rated it a "meh" in terms of value and performance for a very specific reason. There are no Founder's Edition models, and all cards will be manufactured by NVidia partners so the MSRP is highly unlikely to be the starting price. If you have a 2000 series card, it is a minor upgrade only in certain scenarios that can use the 12GB memory over the previous generation's 8GB memory. If you have a much older card and need an upgrade, it will do—IF you can buy one and at the MSRP.

  • As we have seen in Texas, a much better model to make loads of money is restricting supply.
    You can do this once you've established a monopoly on the market then you can charge high "free market" rates.
    1. Establish monopoly
    2. Restrict supply
    3. Profit!

    • Texas didn't have a monopoly. Anyone could add their generators to the grid. But no one wanted to winterize (and I don't blame them, odds are they'll never collect on their surge pricing monies.

      • Re: (Score:3)

        by kenh ( 9056 )

        The Texas electricity market allows consumers to buy their electricity on the spot market, and lots of consumers were sucked in with promises of below-market electricity bills, only to find out just how high the spot market could go given the right conditions.

        The average Texan has a fixed-price electricity contract, and will not see their electric bills skyrocket. Gamblers tried to play the market and lost.

        One friend, when he realized what his KWHr was costing him at the peak of the crisis opted to run his

        • While it does allow them to buy on the spot market, there are already rumblings about not allowing the companies to collect on the tens-of-thousands electric bills. That's what I mean, the gamblers may have lost so hard they get a bailout, which means the people they owe the money to might get fucked over.

          And at $9 kWhr, it's hard for me to imagine a generator not being cheaper - hell, buying the generator and using it would be cheaper.

      • Winterizing electricity-generation facilities in order to collect on the higher prices is an attempt to exploit an arbitrage. And arbitrages are quickly closed when they are exploited. Had facilities been winterized, the added supply would have prevented the price surge and, from the generators' standpoint, would have been a net loss. They would have sold only a few days extra worth of electricity and done so at near-normal prices. That's not worth the cost of winterization. Which is why they didn't do

        • You are right that if everyone winterized there would not have been a jump in price. However, it's not an arbitrage issue in any way. I'm pretty sure you mean a different word., so I'm a little lost.

          • You're right, arbitrage may not be exactly the correct word but it seemed descriptive at the time. Prices were high due to lack of winterization. If somebody were to winterize and then try to sell the new electricity they would single-handedly move the market back to much closer to normal prices and the investment wouldn't be profitable. In fact, the most profitable scenario (for the industry as a whole) is for nobody to winterize and then prices skyrocket 17000% or whatever the numbered turned out to

  • I don't understand the angle of "can't meet demand, and yet made a profit". Demand is higher than usual, which obviously leads to better profits.

  • Bitcoin (Score:3)

    by gizmo2199 ( 458329 ) on Thursday February 25, 2021 @02:49PM (#61099800) Homepage

    If i didn't know any better, all of these blockchain coins and tech were just a scam to increase GPU prices.

  • ... and they are not able to write a decent Linux driver.

  • If AMD and NVIDIA are able to make a fair number of GPUs, but the video card makers are the ones facing shortages of this or that component, then the problems with video card shortages aren't due to the actual graphics processors themselves, but other factors. AMD and NVIDIA can then sell everything they make, but may not end up in completed products quickly.

    Note as well, while the new generation of game consoles only started shipping in late November, production started well before then, and sales from A

  • If gpu cards used only one graphics api, then could they be faster? Vulkan, opengl, direct3d.

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