NVIDIA's Bumpy Ride: A Q4 2009 Update

Final Words

Is NVIDIA in trouble? In the short term there are clearly causes to worry. AMD’s Eric Demers often tells me that the best way to lose a fight is by not showing up. NVIDIA effectively didn’t show up to the first DX11 battles, that’s going to hurt. But as I said in the things get better next year section, they do get better next year.

Fermi devotes a significant portion of its die to features that are designed for a market that currently isn’t generating much revenue. That needs to change in order for this strategy to make sense.

NVIDIA told me that we should see exponential growth in Tesla revenues after Fermi, but what does that mean? I don’t suspect that the sort of customers buying Tesla boards and servers will be lining up on day 1. I’d say best case scenario, Tesla revenues should see a bump one to two quarters after Fermi’s launch.

Nexus, ECC, and better double precision performance will all make Fermi more attractive in the HPC space than Cypress. The question is how much revenue will that generate in the short term.

Nexus enables full NVIDIA GPU debugging from within Visual Studio. Not so useful for PC gaming, but very helpful for Tesla

Then there’s the mobile space. NVIDIA could do very well with Tegra. NVIDIA is an ARM licensee, and that takes care of the missing CPU piece of the puzzle. Unlike the PC space, x86 isn’t the dominant player in the mobile market. NVIDIA has a headstart in the ultra mobile space much like it does in the GPU computing space. Intel is a bit behind with its Atom strategy. NVIDIA could use this to its advantage.

The transition needs to be a smooth one. The bulk of NVIDIA’s revenues today come from PC graphics cards. There’s room for NVIDIA in the HPC and ultra mobile spaces, but it’s not revenue that’s going to accumulate over night. The changes in focus we’re seeing from NVIDIA today are in line with what it’d have to do in order to establish successful businesses outside of the PC industry.

And don’t think the PC GPU battle is over yet either. It took years for NVIDIA to be pushed out of the chipset space, even after AMD bought ATI. Even if the future of PC graphics are Intel and AMD GPUs, it’s going to take a very long time to get there.