Nvidia is seeing the same trends in the graphics card market as everyone else — increased demand driven by cryptocurrency miners — and the company is taking a two-pronged approach to tackling the issue, Nvidia executives said today during an earnings call with investors.
For the three-month period ending Jan. 28, 2018, the fourth quarter of Nvidia’s 2018 fiscal year, the company reported record revenue of $2.91 billion. That included $2.46 billion from Nvidia’s GPU business, a year-over-year increase of 33 percent that was led by growth in the gaming and data center markets. Nvidia cited “strong growth” for its Pascal-based GeForce gaming GPUs that was driven by “new games, holiday-season demand, iCafe upgrades, esports and cryptocurrency mining.”
“Strong demand in the cryptocurrency market exceeded our expectations,” said Colette Kress, executive vice president and chief financial officer at Nvidia, during the earnings call. Kress added that “cryptocurrency accounted for a higher percentage of revenue than the previous quarter,” although she said the increase is “difficult to quantify.”
Nvidia isn’t counting on that business, however. “Our main focus remains on our core market, as cryptocurrency will likely remain volatile,” said Kress, adding that Nvidia expects revenue from the cryptocurrency segment to be flat for the first quarter of its 2019 fiscal year. And because miners continue to snatch up graphics cards, gamers remain frustrated at their inability to find reasonably priced GPUs.
“There’s a fairly sizable pent-up demand going into this quarter,” said Nvidia CEO and president Jensen Huang, referring to the market for gaming graphics cards. “The demand is great, and it’s very likely the demand will remain great as we look through this quarter.”
Huang noted that retailers are the ones setting prices for GPUs amid the ongoing shortage, and confirmed that the company is asking retailers to focus on gamers instead of miners.
“We’re working really hard to get GPUs out into the marketplace for the gamers,” said Huang. “And we’re doing everything we can to advise e-tailers and system builders to serve the gamers.” Retailers such as Micro Center are already taking unusual measures, like offering bundle pricing for customers buying components for a full PC build.
For its part, Nvidia — like its primary competitor, AMD — is making an effort to increase supply and meet the demand. Huang praised the company’s suppliers, but sidestepped a question asking whether Nvidia’s production process was hamstrung by shortages of particular components. (AMD is contending with shortages in both GDDR5 and HBM2 memory, company CEO and president Dr. Lisa Su said last week.)
“We’re doing everything we can, but I think the most important thing is, we just got to catch up with supply,” said Huang. “We’re just constrained.”