Feeds

Long product cycle times to impact Nvidia Q4 earnings

Analyst forecast

  • alert
  • submit to reddit

Nvidia's Q4 results, due later today, will reveal reduced margins - and a lower income as a result - thanks to long product cycle times at its main foundry partner, TSMC.

So claims a report from US investment house Pacific Crest Securities (PCS). "Nvidia's low gross margin over the past two quarters (27 to 28 per cent versus a 33.3 per cent average since 1999) has been the result of long product cycle times at... TSMC," Pacific Crest Securities analyst Michael McConnell writes.

"The number of mask steps required to fabricate the company's NV3x family of graphics processors led to cycle times in excess of 75 days, compared to a normalised 60-65 days in previous product generations," he adds.

The upshot, says McConnell, are earnings of just 11 cents a share on sales of $485 million. That's better than the previous quarter's four cents a share, but well below Q4 2003's 30 cents and Q4 2002's 43 cents.

The good news is that Nvidia's NV4x series of graphics chips will see better cycle times, the PCS report suggests, thanks to the involvement of a second foundry partner, IBM.

Next quarter, PCS reckons Nvidia will earn ten cents a share on sales of $480 million. This represents a lowering of estimates thanks to the inevitable post-Christmas lull. ®

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.