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nVidia Q2 revenue rockets up 543 per cent

But results flat, quarter-on-quarter

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Games graphics specialist nVidia has recorded a massive 543 per cent increase in year-on-year revenue for its second quarter of fiscal 2000, ended 1 August. The company announced revenues of $78 million, up from just $12 million for the same period (sort of -- it ended on 26 July) last year. It also posted a profit of $6.7 million, compared to the loss of $9.7 million it recorded for Q2 1999. nVidia's latest results are impressive, and clearly show the ongoing success of the company's Riva TNT2 chipset. That said, for Q1 2000, the company posted revenues of $71 million and net income of $6.3 million, so its quarter-on-quarter growth isn't too hot. That suggests the company's success may have reached a plateau -- it will need a major new product release or moves into wider markets to push up growth again. Increasing the scope of nVidia's product range is at least starting to take place, as the company pushes hard to with deals with PC OEMs. It's also working on the successor to the TNT2. The big unknown is the effect of nVidia's new-found friendship with SGI. Quite what the input of the workstation and server vendor's extensive 3D experience will do for nVidia isn't yet clear, but it's certainly going to help it break into higher-end, more lucrative business opportunities and allow it to hold its own in the PC gaming arena. However, the question remains: can nVidia continue to expand without the acquisition of a graphics card manufacturer? Graphics rival ATI has always built its own boards -- one of the reasons for its domination of the market -- and now nVidia's other key competitors, 3dfx and S3, have manufacturing divisions too, respectively STB and Diamond Multimedia. nVidia will probably want to wait to see the fiscal effects of the SGI tie-in and the upcoming TNT3 before committing itself to such a major acquisition -- look what acquiring STB did to 3dfx's profits -- but sooner or later that's a move it will have to consider very seriously indeed. ® Related Stories 3dfx stock drops on ongoing losses Acer to integrate nVidia technology into chip set Testers say TNT2 is a blast Nvidia, SGI bury hatchet

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