Floods and slumping Tegra 2 sales hit Nvidia revenue forecast

CHIP DESIGNER Nvidia has revised its fiscal fourth quarter revenue forecast less than a week before its accounting period closes.

Nvidia issued a statement revising its revenue forecast for its fourth quarter ending 29 January 2012 to be lower than previous estimates. The firm now expects revenue to be $950m give or take one per cent, compared to a previous estimate of $1.066bn made back in November.

Nvidia laid the blame on the Thai floods that affected a number of component suppliers leading to a reduction in the number of systems shipped. However Nvidia couldn't hide behind natural disasters when it said demand for its Tegra 2 chip "declined more rapidly than expected".

According to Nvidia its Tegra 2 business fell away due to its launch of Tegra 3, saying production of its five-core system-on-chip will be ramping up in the first three months of 2012.

A month after Nvidia's Tegra 2 was launched at CES 2011 the firm was busy publicly showing Kal-el, the basis of Tegra 3. Within a year Nvidia had surpassed Tegra 2 suggesting that the delays associated with the chip had cost the firm dearly.

Nvidia's five-core Tegra 3 has been put into Asus' Eee Pad Transformer Prime. While the device is impressive and the chip is undoubtedly fast, Nvidia's rivals are preparing competing chips. µ