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nVidia Profits & GPU Shipments Down

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If you've been following the (tech) news recently, you'll doubtless know that nVidia has taken a bit of a beating, what with failing laptop GPUs and the wild success of such ATI graphics cards as the Radeon HD 4870. These and other factors have lead to nVidia posting its first quarterly loss in close to six years, $120.9 million (~£65 million) to be exact.

Given the charge the company took to offset its notebook GPU problems amounted to $196 million, even if there had been no issues, nVidia would still have made some $100 million less profit than Q2 last year. Of course with average selling prices down 25 per cent and sales down 20 per cent, that's perhaps not surprising.

nVidia's President and CEO Jen-Hsun Huang commented on the quarterly results saying:
"Our Q2 financial performance was disappointing. The desktop PC market around the world weakened during the quarter. And our miscalculation of competitive price position further pressured our desktop GPU business. We have a great product line-up and, having taken the necessary pricing actions, we are strongly positioned again. Our focus now is to drive cost improvements and to further enhance our competitiveness through the many exciting initiatives we have planned for the rest of the year. In contrast, the rest of our businesses did not exhibit the same dynamics as our desktop business. The notebook GPU, MCP, and Professional Solutions groups grew a combined 27 percent year-over year."

Huang also conceded that a large contributing factor was the underestimation of ATI's ability to be competitive at the price points nVidia initially hit. It's not all bad though, as the company is now clearing 65nm stock and will be moving to 55nm later in the year. That's good news for consumers as it will mean cooler, and hopefully cheaper products and it's good news for nVidia because it means better yields and thus in theory better profitability from its production lines.

We haven't seen the back of nVidia quite yet…

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