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Nvidia doubles profits but fails to impress Wall Street

Banksters think Nvidia CUDA done more
Thu Feb 16 2012, 17:06

CHIP DESIGNER Nvidia ended its 2012 financial year with an impressive rise in profits but still fell short of Wall Street's expectations.

Nvidia's 2012 full-year financial results show the firm raked in just under $4bn in revenue, up 12.8 per cent from the year previously, with net income more than doubling to $581.1m. Perhaps the best bit of news for Nvidia is that its gross margin increased to 51.4 per cent.

With Nvidia putting significant effort into building up its Tegra system-on-chip (SoC) business, the firm must have been relieved to attribute its impressive performance to its SoCs. The firm claims its Consumer Products business unit saw its revenue increase by almost 200 per cent.

On the other hand, Nvidia's traditional bread and butter - its consumer GPU business - saw its revenue increase by only 0.6 per cent. It won't escape many hardware enthusiasts that Nvidia's desktop GPU line has been stagnating, leaving AMD to not only take the lead with its Tahiti GPUs but overprice products due to lack of competition.

However Nvidia's Tegra SoC business wasn't all plain sailing, with the firm acknowledging that its Tegra 2 business fell off. The firm said it expects Tegra 3 smartphones to appear shortly, in line with its prediction that Tegra 3 smartphones will be shown at Mobile World Congress.

Nvidia's biggest problem is its reliance on TSMC's 28nm process node. The much delayed process node has kept both AMD and Nvidia waiting and while Nvidia could blame the floods in Thailand for lower than expected desktop, laptop and workstation shipments in 2011, that argument won't wash much longer.

Although Nvidia's results failed to impress Wall Street analysts, given the uncomfortable trading conditions all semiconductor firms faced in 2011 and TSMC's woes, the firm is likely quietly pleased with its performance. µ


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