Sales of graphics cards are still growing, despite the shortage of components
Sales of graphics cards are still growing
According to Mercury Research, sales of dedicated video cards in the first quarter of 2021 increased due to high demand for PCs in general and gaming systems in particular. NVIDIA continues to dominate the market, while AMD has gained ground especially in the CPU segment over the past few years. However, as we told you in this previous news, the sales of its GPUs continue to trudge against the direct rival. According to Jon Peddle Research, the situation with AMD's dedicated GPU supplies has been more difficult in recent months due to chip shortages and its market share in the fourth quarter of 2020 has dropped to a multi-year low.GPU shipments in the first quarter hit 22 million units (including both desktop and notebook products, as well as cryptocurrency mining), up 1%, according to data from Mercury Research cited by Capital Markets. Traditionally, graphics card sales have declined in the first quarter compared to the fourth quarter, but this has not been a normal quarter.
NVIDIA grabbed 81% of the market in the first quarter of 2021, the 5th, 2% more than the same period a year ago, based on data from Mercury Research. AMD occupies the remaining 19%, almost stable from the previous quarter and down from the first quarter of 2020. Meanwhile, as unit sales have increased and AMD's share has remained stable, it means that the company has sold more. GPU in Q1 2021 versus Q4 2020.
«The GPUs used to mine Ethereum contributed to the additional GPU sales in the first quarter» - said Dean McCarron, head of Mercury Research. However, it is difficult to estimate how many of the GPUs sold in the first quarter are now being used to mine cryptocurrencies. McCarron estimates that sales of NVIDIA's CMP devices dedicated to mining were 1-2 million units in the first quarter, well below his expectations of around 4.5 million.
Both AMD and NVIDIA recently said that their shipments in the first quarter of 2021 were limited by the shortage of production capacity in foundries and the limited availability of components. As AMD has contractual obligations to supply its custom SoCs for the latest gaming consoles from Microsoft and Sony, as well as CPUs for PC makers and servers, it's not particularly surprising to see that the company has failed to significantly increase shipments of its own. GPU in the first quarter. However, AMD hopes to increase sales of its graphics processors by the end of the year.
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Nvidia revenue jumps 84% from last year as gamers demand graphics chips
Jen-Hsun Huang, CEO, Nvidia
David Paul Morris | Bloomberg | Getty Images
Nvidia reported first-quarter results for its fiscal 2022 on Wednesday, with sales growing 84% compared with last year.
Earnings and sales both beat Wall Street expectations, but the shares were basically unchanged in extended trading.
Here's how the chipmaker did, versus Refinitiv consensus estimates:
The earnings period ended May 2.
Nvidia's earnings come during a period of sustained, massive growth in its business amid a shortage of semiconductors worldwide. Nvidia said it expected $6.30 billion in revenue in the current quarter, which would be a 62% increase over last year.
The number-crunching graphics processors (GPUs) Nvidia makes are essential for PC games, artificial intelligence and cryptocurrency mining.
Its graphics segment, comprised mostly of graphics cards, was up 81% to $3.45 billion in revenue. Broken down by market platform instead of reportable segment, Nvidia said its gaming products were up 106% on an annual basis to $2.76 billion in sales.
Nvidia CFO Colette Kress said that gamers and students are behind the increased demand for GPUs and that it expected that the current upgrade cycle would continue to be strong through the rest of the year. Sales of its consumer GeForce graphics processors drove the increased revenue in its gaming division, in addition to chips it sells to game console makers.
The compute and networking segment, which includes chips for data centers, was up 88% to $2.21 billion. Nvidia said that sales were boosted partially by Mellanox, a data center company it bought last year, as well as increased demand for graphics processors in servers.
Nvidia has also had supply issues for months. Its consumer graphics cards are consistently sold out around the world, and Nvidia has added new software to make them less attractive to cryptocurrency miners in an effort to reserve supply for other buyers.
Nvidia said on Wednesday that it expected graphics cards to remain in short supply through the second half of the year, but that its new line of dedicated cryptocurrency chips, called CMP, could help ameliorate the problem.
'CMP yields better, and producing those doesn't take away from the supply of GeForce. So it protects supply for the gamers,' Nvidia CEO Jensen Huang said on a call with analysts.
Nvidia said Wednesday that it believed cryptocurrency miners were partially responsible for its increased revenue, but 'it is hard to determine to what extent.'
Nvidia said that the CMP processors it sells specifically for cryptocurrency miners had revenue of $155 million. In the current quarter, Nvidia is expecting CMP sales around $400 million, Kress said.
Nvidia announced last year that it planned to buy ARM, a core processor technology company, for $40 billion. Kress said that the transaction was on track to close in 2022.
Last week, Nvidia announced that it plans to split its stock 4-to-1, pending shareholder approval.
