Nvidia forecasts lower revenue, notebook failures

Despite posting its best first fiscal quarter ever in May, Nvidia has forecast lower-than-expected revenue and gross margin for the following quarter that will end on July 27. Nvidia now expects revenue of $875 million to $950 million for its second fiscal quarter, potentially down from $935.3 million a year before and $1.15 billion in the first quarter.

Why the drop? Nvidia blames a variety of factors, including weak markets, a delayed next-generation chipset, and GPU price adjustments in response to "competitive products"—presumably a reference to the GeForce 9800 GTX’s recent drop to $199 after the launch of AMD’s Radeon HD 4850.

Separately, Nvidia says it will "take a one-time charge . . . against cost of revenue" of $150 million to $200 million because of notebook graphics and chipset problems:

[The charge will cover] anticipated warranty, repair, return, replacement and other costs and expenses, arising from a weak die/packaging material set in certain versions of its previous generation GPU and MCP products used in notebook systems. Certain notebook configurations with GPUs and MCPs manufactured with a certain die/packaging material set are failing in the field at higher than normal rates. To date, abnormal failure rates with systems other than certain notebook systems have not been seen. NVIDIA has initiated discussions with its supply chain regarding this material set issue and the Company will also seek to access insurance coverage for this matter.

To quell these issues in the future, Nvidia CEO Jen-Hsun Huang says, "We have switched production to a more robust die/package material set and are working proactively with our OEM partners to develop system management software that will provide better thermal management to the GPU."

Comments closed
    • ish718
    • 11 years ago

    heh HD4000 series pooped on Nvidia

    • PetMiceRnice
    • 11 years ago

    Given the cyclic nature of the tech industry, I expected something like this sooner or later. Nvidia in my view was fortunate to have such a good run for so long.

    • Code:[M]ayhem
    • 11 years ago

    Nobody buys $600 video cards who would’ve guessed?

      • ish718
      • 11 years ago

      $600 can get you E8400 with mobo, ram and HDD AND Power supply
      lol

      But ofcourse the GTX280 is for enthusiast who can waste money
      The GTX 280 can be bought for $500 now and its still a bad value hahahaha

    • swaaye
    • 11 years ago

    I have a buddy with a 7900 Go GS that had its heatpipe fail. I’m assuming it had a little leak and all the coolant inside escaped. Just blows cold air. Past the warranty too.

    Of course, considering DAAMIT has almost zilch in the high-end notebook GPU market, it’s hard to really compare failure rates. I really haven’t seen that many issues with NVIDIA notebook GPUs though. And, to my friend’s 7900’s credit, it has been operating without cooling for many months now. He was in China with it and couldn’t get service. It clocks way down if you try to play 3D games on it but otherwise works perfectly.

    • MadManOriginal
    • 11 years ago

    Massive price drops on the GTX 260 to <$300 and GTX 280 to <$500 won’t help either. I wonder if they’ll end up losing money on those when you take in to account development costs too?

    • albundy
    • 11 years ago

    meh, sucks to be nv. if you cant control the flame, stay off the fire.

    • crabjokeman
    • 11 years ago

    nFurnace + GeFurnace = FAIL

    • Tommyxx516
    • 11 years ago

    $#^#$%& I just lost ALOT of $$$ because of this report!!!

      • indeego
      • 11 years ago

      It’ll go back up. Overreactiong{<.<}g

      • Jive
      • 11 years ago

      So did i, but i just doubled up the number of shares i own. It’ll go back up a few dollars within the next couple of days due to being severally overvalued. People over reacted and capitulated and oversold the stock.

        • ssidbroadcast
        • 11 years ago

        Can I have some $$$ ?

          • Jive
          • 11 years ago

          I know you haven’t been getting paid (sorry to hear), but i don’t got much of it either. I’m a college student living on minimum wage (though still at home).

            • ssidbroadcast
            • 11 years ago

            Dang, that’s a rough ticket. How were you able to secure some nVidia stock on minimum wage?

            • Jive
            • 11 years ago

            Cause im still at home im able to put away some money here and there rather then pay for rent, its adds up after a few months…

          • A_Pickle
          • 11 years ago

          Here:
          $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$
          $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$
          $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$
          $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$
          $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$

          Lots of $$$.

            • ssidbroadcast
            • 11 years ago

            Thanks man, I will print this up right away and give it to my landlord.

      • Sniper
      • 11 years ago

      Now’s a good time to buy more stock.

    • DrDillyBar
    • 11 years ago

    And after lamblasting intel on their GPU’s, they’re now targeting that market directly.

    • indeego
    • 11 years ago

    Yikes. This is significant newsg{<.<}g

    • ssidbroadcast
    • 11 years ago

    Wow ATi’s 4800-series effected nVidia’s financials /[

    • YeuEmMaiMai
    • 11 years ago

    kid had problems with his 7600 sli in alienware that thing always overheated the machine

      • Atradeimos
      • 11 years ago

      That’s why no one sane buys Alienware.

    • SGT Lindy
    • 11 years ago

    Translation. Gaming continues its swing to consoles and the need for dedicated GPU’s in PC starts to decline, more so in notebooks.

      • danieldasilva
      • 11 years ago

      Err… I don’t think your translation is quite accurate. You might need some “market language” lessons.

      • Kurotetsu
      • 11 years ago

      “We were too slow coming out with our new stuff.”

      and

      “The Radeon HD 4850 was ALOT better than we anticipated and we had sacrifice profit to keep up.”

      and

      “Looks like we f****ed up with the notebooks. We’re going to have to bite the bullet and invest a ton of money into getting them all fixed.”

      And yet by some bizarre logic you translate that as: “LAWL! PC suks and console rulz!1!!!1!11”

      The only thing that comes close is ‘weak markets’. And that could have more to do with the general recession we’re having than anything console related.

      • flip-mode
      • 11 years ago

      You don’t pay attention. If that were the case they wouldn’t have just had a record quarter.

      • DASQ
      • 11 years ago

      Translation. I’m thick and can’t read worth a damn.

      • ludi
      • 11 years ago

      Uh-oh. HULL BREACH IMMINENT!

        • Grigory
        • 11 years ago

        Haha

    • Usacomp2k3
    • 11 years ago

    They’d have more sales if the gtx cards were a better value. At this point, it’s really hard to recommend one.

    • Meadows
    • 11 years ago

    It’s not like nVidia has anything to panic about, looking at their revenue rates. They did decrease, but it’s like breaking off one twig of a mammoth tree. AMD will need to bring out bigger axes if they intend to chop further at them.

    I applaud AMD for even getting that far. I like nVidia, but I don’t have unlimited money for getting products.

      • TheEmrys
      • 11 years ago

      AMD needs bark beetles….

    • bogbox
    • 11 years ago

    Better buy a Intel chipset and a Ati discrete card than Nvidia one for my notebook. Or maybe a Puma platform but need some reviews on it.

    • oldDummy
    • 11 years ago

    Forthright…

    • vojc
    • 11 years ago

    ATI powered notebook rocks

    • A_Pickle
    • 11 years ago

    I will never recommend a Geforce 7150-powered notebook to anyone that I know. Those are abysmal.

      • Lord.Blue
      • 11 years ago

      Better than most Intel video systems.

        • Scrotos
        • 11 years ago

        Why, do the intel chipsets and video chips have the same issue as “GPUs and MCPs manufactured with a certain die/packaging material set are failing in the field at higher than normal rates”? Ok, in recent history, at least?

        • Pettytheft
        • 11 years ago

        It’s not about performance.

        • A_Pickle
        • 11 years ago

        I’m sorry. Try Flip3D-ing on a 7150, versus an X3100 or even a GMA 950 again. You might disagree with that.

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