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Nvidia Q2 profits rocket

But 3dfx continues to dominate retail

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Nvidia yesterday reported record revenues and profits for its second quarter, despite statements from its arch-rival, 3dfx, that the latter is leading the way in retail sales.

Nvidia's Q2 2000 saw net income hit $22.5 million - almost four times the $6.7 million it reported for the same period last year. At 28 cents a share, the company's earnings were two cents above Wall Street expectations, according to First Call's average.

Operating profit for the three-month period totalled $29.5 million, up from $9.5 million for Q2 1999.

Revenue reached $170.4 million, up 118 per cent on last year's $78 million.

All of which serves to show that, at least for now, Nvidia's policy of sticking to chip development even though its rivals have expanded into board manufacturing is paying off. Without having to worry about the end user product side of the 3D business, Nvidia has been able to concentrate on building faster chips, a programme that has seen it supersede first the TNT2 and then that chip's successor, the GeForce 256, in around a year.

Nvidia has gone two product generations in the same time it's taken 3dfx, for instance, to move up one. It has also been able to expand its market coverage, adding the GeForce 2 MX to help it tackle the mobile arena. Nvidia's latest chip, the GeForce 2 Ultra may be little more than a fast memory-supporting, higher clocked GeForce 2 GTS, but it should be enough to win the company more business in the games enthusiast space.

That said, 3dfx remains a brand to be reckoned with, and yesterday said it continued to dominate the retail market with its Voodoo line. According to US retail market watcher PC Data, 3dfx's Voodoo 5 5500 AGP card was the number one selling during its first month on sale, outselling the number two board by a factor of two, and the combined sales of the number two and number three boards by 25 per cent.

Of course, board number two and board number three are both GeForce 2 GTS-based, so Nvidia isn't exactly being squeezed out of the retail market. And while 3dfx, now that it's producing its own boards, has to keep an eye on the retail market, Nvidia can focus on the more lucrative OEM space, something it's been doing with much success, if it's design wins and Q2 results are anything to go by. ®

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