Graphics chip maker Nvidia Inc. going through a "difficult" fourth quarter, hurt by supply chain issues according to Susquehanna Financial analyst Chris Caso.
Caso wrote to his clients that after checking in Asia this week, he thinks that Nvidia 's January quarter is tracking below plan. The outfit's GeForce (GPU), Quadro, and Tesla businesses combined are down about 10-12 per cent with the Quadro/Tesla somewhat weaker than GPU.
In November, the company indicated that it expected Quadro to be up sequentially, Tesla to be flat, desktop GPU to be up sequentially and notebook GPU flat to slightly down. However Caso thinks the outfit is significantly below that plan at this point in the quarter.
Given that Chinese New Year is occurring in late January,the channel will be loathe to take on additional inventory ahead of the slowdown, preferring to work through existing inventory. It looks like lead times for the company's GTX570/580/590 are up, indicating strong demand, which should help average selling prices in the quarter.
Fortunately for Nvidia, AMD is also having supply issues on its high-end GPU product, which theoretically could benefit Nvidia as a share gainer. However Caso believes the company has not been able to take advantage of AMD's struggles due to a lack of wafer supply.
Supply chain troubles
Nick Farell
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