Computer
Nvidia with record numbers thanks to high chip demand
Record demand thanks to niche: Chips for artificial intelligence and graphics cards are currently bringing the semiconductor specialist Nvidia hefty profits. Photo: Andrea Warnecke/dpa-tmn/dpa
© dpa-infocom GmbH
Nvidia went from being a niche supplier of graphics cards to a leading specialist in artificial intelligence chips. The current profit is more than twice as high as in the same quarter last year.
The need for chips for artificial intelligence and graphics cards is driving the business of semiconductor specialist Nvidia to record levels.
Sales increased in the fourth business quarter, which ended in January, by 53 percent to a good 7.6 billion dollars (6.7 billion euros). The bottom line is that the profit of three billion dollars was even more than twice as high as in the same quarter of the previous year.
For the current quarter, Nvidia announced a further increase in sales to 8.1 billion dollars – while the analysts had expected around 7.3 billion dollars. However, the quarterly result is burdened by a payment of 1.36 billion dollars following the failure of the purchase of the chip designer Arm. It’s the advance that Arm’s owner, Japanese technology group Softbank, is allowed to keep.
The architecture of the processors with which, among other things, practically all smartphones run comes from Arm. The takeover plans were torpedoed by concerns from competition watchdogs and competitors that Nvidia, as the owner of Arm, might disadvantage rivals. The group has always denied this. “We did our best, but the headwind was too strong,” said Nvidia boss Jensen Huang on Wednesday regarding the recently canceled deal.
In the gaming sector, Nvidia sales increased by 37 percent to $3.42 billion last quarter. Graphics cards from the company are also used to generate cryptocurrencies. This has also increased demand in recent years in view of the rising prices of digital currencies such as Bitcoin.
Component bottlenecks slow down business
The data center business is now almost as big, having jumped 72 percent to $3.26 billion. Nvidia’s chips and software are used there in particular for applications with artificial intelligence and machine learning. For example, the Facebook group Meta uses Nvidia systems in its new supercomputer.
At the same time, the component bottlenecks in the semiconductor business are also slowing down Nvidia. However, the group expects the situation to improve from quarter to quarter.
Meanwhile, auto sales fell 14 percent to $125 million. The business was held back by production problems in the auto industry amid global component shortages. However, Nvidia has deals with various car companies to equip future generations of vehicles with computers for driving assistants and self-driving cars.
Only on Wednesday did the carmaker Jaguar Land Rover announce that Nvidia’s computers would be installed in all new models of the two brands by 2025. Nvidia boss Huang said in a conference call with analysts that the business model is also to offer downloadable functions such as autonomous driving. The companies want to share the proceeds. An earlier deal with Mercedes-Benz was similar and both manufacturers might bring more than 10 million vehicles with Nvidia technology on board within ten years, Huang emphasized.
Investors were not impressed by the quarterly figures and the outlook: the stock lost around 2.6 percent in following-hours US trading.
