NVIDIA faces AGP, inventory hurdles

— 1:02 AM on June 13, 2006

Expectations for NVIDIA's financial performance in the July-September fiscal quarter are low, according to Friedman, Billings, Ramsey Group analyst Chris Caso as quoted by EE Times. The analyst says IBM has stopped producing a vital PCI Express to AGP bridge chip for NVIDIA, effectively leaving the green team unable to produce some AGP parts. NVIDIA is expected to find another foundry partner to produce bridge chips, but the analyst says a "supply chain disruption" is expected this summer as a result. NVIDIA's bridged AGP graphics cards include the GeForce 7800 GS and the AGP flavor of the GeForce 6600 GT.

In addition to potential AGP supply problems, low PC sales that are hurting Intel also appear to be affecting the graphics card market. NVIDIA's inventory was up a whopping 36% in the first fiscal quarter, and the company is reportedly offering "deep discounts" and bundles in an attempt to get rid of extra stock. Outlook for the coming July quarter is bleak, but the analyst does say the October-December fiscal quarter should see better results for NVIDIA after the release of Sony's NVIDIA-powered PlayStation 3.

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