NVIDIA Warns of Headwinds Due to Lower Gaming Revenue in Preliminary Financial Results

cageymaru

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NVIDIA Announces Preliminary Financial Results for Second Quarter Fiscal 2023​

https://www.globenewswire.com/news-...l-Results-for-Second-Quarter-Fiscal-2023.html


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NVIDIA Announces Preliminary Financial Results for Second Quarter Fiscal 2023​

August 08, 2022 09:00 ET | Source: NVIDIA

  • Preliminary second quarter revenue of $6.70 billion versus outlook of $8.10 billion
  • Shortfall versus outlook primarily driven by weaker Gaming revenue
  • Management to discuss financial results and outlook on Aug. 24 earnings call

SANTA CLARA, Calif., Aug. 08, 2022 (GLOBE NEWSWIRE) -- NVIDIA (NASDAQ: NVDA) today announced selected preliminary financial results for the second quarter ended July 31, 2022.


Second quarter revenue is expected to be approximately $6.70 billion, down 19% sequentially and up 3% from the prior year, primarily reflecting weaker than forecasted Gaming revenue. Gaming revenue was $2.04 billion, down 44% sequentially and down 33% from the prior year. Data Center revenue was $3.81 billion, up 1% sequentially and up 61% from the prior year.


The shortfall relative to the May revenue outlook of $8.10 billion was primarily attributable to lower sell-in of Gaming products reflecting a reduction in channel partner sales likely due to macroeconomic headwinds. In addition to reducing sell-in, the company implemented pricing programs with channel partners to reflect challenging market conditions that are expected to persist into the third quarter.


Data Center revenue, though a record, was somewhat short of the company’s expectations, as it was impacted by supply chain disruptions.


Second quarter results are expected to include approximately $1.32 billion of charges, primarily for inventory and related reserves, based on revised expectations of future demand.


“Our gaming product sell-through projections declined significantly as the quarter progressed,” said Jensen Huang, founder and CEO of NVIDIA. “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory.

“NVIDIA has excellent products and position driving large and growing markets. As we navigate these challenges, we remain focused on the once-in-a-generation opportunity to reinvent computing for the era of AI,” he said.


“The significant charges incurred in the quarter reflect previous long-term purchase commitments we made during a time of severe component shortages and our current expectation of ongoing macroeconomic uncertainty,” said Colette Kress, EVP and CFO of NVIDIA.


“We believe our long-term gross margin profile is intact. We have slowed operating expense growth, balancing investments for long-term growth while managing near-term profitability. We plan to continue stock buybacks as we foresee strong cash generation and future growth,” she said.



Q2 FY23 Outlook1Q2 FY23 Preliminary Results
Revenue$8.10 billion, plus or minus 2%$6.70 billion
Gross margin – GAAP
Gross margin – non-GAAP
65.1%, plus or minus 50 bps
67.1%, plus or minus 50 bps
43.7%, plus or minus 50 bps
46.1%, plus or minus 50 bps
Operating expenses – GAAP
Operating expenses – non-GAAP
$2.46 billion
$1.75 billion
$2.42 billion
$1.75 billion
GAAP and non-GAAP other income and expense$40 million expense$24 million and $16 million expense, respectively
GAAP and non-GAAP tax rate12.5%, plus or minus 1%, excluding discrete items-35% GAAP (benefit) and 2% non-GAAP, including discrete items

1 Announced in May 2022 in connection with the company’s press release announcing its financial results for first quarter fiscal 2023.



Revenue by Market Platform
($ in billions)
Q2 FY23
Preliminary Results
Q/QY/Y
Gaming$2.04Down 44%Down 33%
Data Center3.81Up 1%Up 61%
Professional Visualization0.50Down 20%Down 4%
Automotive0.22Up 59%Up 45%
OEM and Other0.13Down 12%Down 66%
Total$6.70Down 19%Up 3%

The preliminary results for the second quarter ended July 31, 2022, are an estimate, based on information available to management as of the date of this release, and are subject to further changes upon completion of the company’s standard quarter and year-end closing procedures. This update does not present all necessary information for an understanding of NVIDIA’s financial condition as of the date of this release, or its results of operations for the second quarter. As NVIDIA completes its quarter-end financial close process and finalizes its financial statements for the quarter, it will be required to make significant judgments in a number of areas. It is possible that NVIDIA may identify items that require it to make adjustments to the preliminary financial information set forth above and those changes could be material. NVIDIA does not intend to update such financial information prior to release of its final second quarter financial statement information, which is currently scheduled for Aug. 24, 2022.


Conference Call and Webcast Information
NVIDIA will host a conference call on Wednesday, Aug. 24, at 2 p.m. PT (5 p.m. ET), to discuss its financial results for the second quarter of fiscal year 2023.


The call will be webcast live (in listen-only mode) on investor.nvidia.com. The company’s prepared remarks will be followed by a question-and-answer session, which will be limited to questions from financial analysts and institutional investors.


Ahead of the call, NVIDIA will provide written commentary on its second-quarter results from its CFO, Colette Kress. This material will be posted to investor.nvidia.com immediately after the company’s results are publicly announced at approximately 1:20 p.m. PT.


The webcast will be recorded and available for replay until the company’s conference call to discuss financial results for its third quarter of fiscal year 2023.


Non-GAAP Measures
In addition to U.S. GAAP financial measures, this press release includes preliminary estimates of non-GAAP measures of certain components of financial performance. These preliminary estimates of non-GAAP measures include non-GAAP gross margin, operating expenses, other income and expense, and income tax expense.


These non-GAAP financial measures exclude stock-based compensation expense, acquisition-related and other costs, gains or losses from non-affiliated investments, interest expense related to amortization of debt discount and the associated tax impact of these items, where applicable.


A preliminary updated reconciliation of GAAP to non-GAAP gross margin, operating expenses, other income and expenses and tax rate is as follows:



Reconciliation of GAAP to non-GAAP Financial Measures
($ in millions)
Q2 FY23
Preliminary Results
GAAP gross margin43.7%
Stock-based compensation expense, acquisition-related costs, and other costs2.4
Non-GAAP gross margin46.1%
GAAP operating expenses$2,416
Stock-based compensation expense and acquisition-related costs(667)
Non-GAAP operating expenses$1,749
GAAP other expense, net$24
Losses from non-affiliated investments and other costs(8)
Non-GAAP other expense, net$16
GAAP tax rate (benefit)(35%)
Tax impact of non-GAAP adjustments37
Non-GAAP tax rate2%

NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.


About NVIDIA
Since its founding in 1993, NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics and ignited the era of modern AI. NVIDIA is now a full-stack computing company with data-center-scale offerings that are reshaping industry. More information at https://nvidianews.nvidia.com/.


For further information, contact:​



Simona JankowskiRobert Sherbin
Investor RelationsCorporate Communications
NVIDIA CorporationNVIDIA Corporation
sjankowski@nvidia.comrsherbin@nvidia.com

Certain statements in this press release including, but not limited to, statements as to: NVIDIA’s preliminary results for the second quarter of fiscal 2023; our excellent products and position driving large and growing markets; challenging market conditions expected to persist into the third quarter; our expectation that the macroeconomic conditions affecting sell-through will continue; our focus on the once-in-a-generation opportunity to reinvent computing for the era of AI; our belief that our long-term gross margin profile is intact; slowing operating expense growth, balancing investments for long-term growth while managing near-term profitability; our plan to continue stock buybacks; our belief in our strong cash generation abilities and future growth; and NVIDIA’s quarter-end financial close process and preparation of financial statements for the quarter are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

© 2022 NVIDIA Corporation. All rights reserved. NVIDIA and the NVIDIA logo are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

NVIDIA-CORPORATION.png

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cageymaru

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I guess the mining cards are going to get really cheap on EBAY due to extra inventory at NVIDIA partner's warehouses.
 

pututu

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If they delay the sale of 4000 series card, it will hurt the gaming revenue more in the coming quarters. Maybe let AIBs take some of the losses of their 3000 series inventory. I don't think pricing the 4000 series card too high will help to increase revenue even if they release it next quarter unless something magical happens in the gpu crypto world.
 

sk3tch

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Already took the L on their stock earlier this year to pay for a remodel (and the L on buying a 3090 Ti for retail...OOF. lol). I would hope most people understood the crypto crash would affect NVIDIA big time.

It has affected us gamers though - because rumors now say that we will get the 4090 only this year and the rest of the 4000 series next year. Trickle down goodness, baby!
 

Ranulfo

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Data Center is now their top revenue generator apparently. Also their margins are projected to hit 65% next quarter? Price hikes perhaps?
 

Zarathustra[H]

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Heh.

I don't believe that for a second.

The revenues they are missing are not "gaming revenues" they are the mining revenues.

The only reason "gaming revenues" are going down is because prices are starting to return to normal as mining demand has dropped. In all sources where I participate gamers demand for GPU's does not appear to have softened one little bit.

Haven't they already been sued by shareholders for misrepresenting this?
 
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Aurelius

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Data Center is now their top revenue generator apparently. Also their margins are projected to hit 65% next quarter? Price hikes perhaps?
Not surprising. NVIDIA might be best-known for gaming, but corporate customers tend to be more consistent sources of revenue. It's part of why Microsoft under Nadella shifted its focus from Windows sales to cloud services; companies don't wait until the holidays to buy necessary tools.
 

staknhalo

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Not surprising. NVIDIA might be best-known for gaming, but corporate customers tend to be more consistent sources of revenue. It's part of why Microsoft under Nadella shifted its focus from Windows sales to cloud services; companies don't wait until the holidays to buy necessary tools.

Plus even in down times as projects and resources get cut, there's always new and more data to process that you want/need to process larger amounts of and faster as time goes on, always

More will always be in demand there
 

Brackle

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Heh.

I don't believe that for a second.

The revenues they are missing are not "gaming revenues" they are the mining revenues.

Haven't they already been sued by shareholders for misrepresenting this?
They have, but i mean they dont care if they are sued. They will pay the fines etc and just move on. Of course gaming revenue was down, Nvidia was selling cards directly to miners! Now that mining has stopped/slowed....they blame the gamers.

Good times.
 

Lakados

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They have, but i mean they dont care if they are sued. They will pay the fines etc and just move on. Of course gaming revenue was down, Nvidia was selling cards directly to miners! Now that mining has stopped/slowed....they blame the gamers.

Good times.
NVidia doesn’t produce cards outside of the founders edition cards. AIB’s sold directly there is a large distinction there as Nvidia does not dictate their sales nor get records of who they sell to. They only know what the AIB’s order and if they are ordering 100k worth of gaming GPU components than Nvidia records 100k gaming GPU’s sold regardless of where those cards end up.

But yeah once again the mining bubble burst is going to bite them in the ass, the question I have is was it Gigabyte again or MSI this time. I suspect MSI they have had an unusually good past couple of years in terms of sales and margins.

But this is why Nvidia wants to push their mining series of cards. It prevents this whole problem, the AIB’s profit from this and leave Nvidia holding the bag.
 

DooKey

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NVidia doesn’t produce cards outside of the founders edition cards. AIB’s sold directly there is a large distinction there as Nvidia does not dictate their sales nor get records of who they sell to. They only know what the AIB’s order and if they are ordering 100k worth of gaming GPU components than Nvidia records 100k gaming GPU’s sold regardless of where those cards end up.

But yeah once again the mining bubble burst is going to bite them in the ass, the question I have is was it Gigabyte again or MSI this time. I suspect MSI they have had an unusually good past couple of years in terms of sales and margins.

But this is why Nvidia wants to push their mining series of cards. It prevents this whole problem, the AIB’s profit from this and leave Nvidia holding the bag.
Yep, NV doesn't significantly support the consumer gamer. The AIB's support gaming. High prices were on AIB's and excess stock is on the AIB's. Of course NV was glad to sell them GPU components and should have reduced AIB allocations far sooner. Damned if they do and damned if they don't.

Anyway, demand destruction is real. AMD/Intel are warning of the same problems.
 

sharknice

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Heh.

I don't believe that for a second.

The revenues they are missing are not "gaming revenues" they are the mining revenues.

The only reason "gaming revenues" are going down is because prices are starting to return to normal as mining demand has dropped. In all sources where I participate gamers demand for GPU's does not appear to have softened one little bit.

Haven't they already been sued by shareholders for misrepresenting this?

Sort of, it was just stupid political BS. Nvidia paid money to the government and admitted no wrong doing. No one in the company was punished, shareholders got nothing for it, shareholders actually got punished for it because the company they own lost money from it.


Calling it "gaming revenue" is hilarious when it was clearly miners, but Nvidia doesn't really have a way to know what their cards are actually used for.

They're all branded as gaming cards and Nvidia has no way to know what they're used for when third parties like Gigabyte and ASUS buy them from NVIDIA, when NVIDIA sells their cards to Best Buy, or even when people bought cards directly from NVIDIA's website. So I guess they just classifly them all as "gaming revenue" because that's the category they've always used instead of changing their categorization to "gaming/mining".
 
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Yep, NV doesn't significantly support the consumer gamer. The AIB's support gaming. High prices were on AIB's and excess stock is on the AIB's. Of course NV was glad to sell them GPU components and should have reduced AIB allocations far sooner. Damned if they do and damned if they don't.

Anyway, demand destruction is real. AMD/Intel are warning of the same problems.
Can we really say they don't support gaming? They design the chips, they release the drivers. They absolutely support it imo.
 

DooKey

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I think autocorrect bit him here and the word he meant to use was “supply”.
I meant they don't supply the gaming consumer in a significant manner. They sell a few FE cards but the bulk of their GPU components goes to AIB's that supply the vast majority of consumer cards.
 

Armenius

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The market is just correcting itself. Gaming revenue always hovered around 1-1.5 billion for NVIDIA until the mining craze in 2018 that hasn't really slowed down. 2.5 billion annually quarterly was never going to be a sustainable metric, and nobody at NVIDIA or those holding shares should be shocked by the news.
 
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LukeTbk

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That part:
the company implemented pricing programs with channel partners to reflect challenging market conditions that are expected to persist into the third quarter.

Seem to indicate that while maybe they did not rise their price (or not has much reflected in the actual card selling price) and maybe the AIB and reseller got a lot of that headroom, maybe they were able to keep them high has if it was a new chip all this time because of the high price.

And obviously lot of later released SKU could be overpriced like the 3050, etc...
 
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ChadD

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What a missed opportunity for Intel. Too bad they nursed their product for so long they couldn't learn from a little failure.
If Intel had got their stupid card out when it was "done" and learned by a bit of trial by fire on the driver and distribution side of things. They may have been able to have a second generation ready to take advantage of Nvidia... and force them to play $ ball.

All well. I have no faith AMD is the company to push hard on their next release to make Nvidia bleed. I love AMD and all but they are likely to match any Nvidia price hike strategy.

On the up side... its not like we have any games really screaming for more GPU anyway.
 

Lakados

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What a missed opportunity for Intel. Too bad they nursed their product for so long they couldn't learn from a little failure.
If Intel had got their stupid card out when it was "done" and learned by a bit of trial by fire on the driver and distribution side of things. They may have been able to have a second generation ready to take advantage of Nvidia... and force them to play $ ball.

All well. I have no faith AMD is the company to push hard on their next release to make Nvidia bleed. I love AMD and all but they are likely to match any Nvidia price hike strategy.

On the up side... its not like we have any games really screaming for more GPU anyway.
If Intel had launched with crap drivers it would have killed them. OEM’s pay them a lot for support it would have been a financial blunder that the board would have ousted the CEO over and the replacement would have been instructed to shut the project down.

AMD for sure is going to price match Nvidia, and they will shut down their more cost effective options as long as Intel doesn’t have a direct competitor in that specific market segment.

AMD gets limited fab time and they will direct that time at what nets them the most profit. I expect a trickling of lower and mid tier GPU’s letting their excess stock fill that gap with a focus on their console contracts and a push on workstation, server, and datacenter parts.

To fill the gap I also expect branded swag and partnerships. AMD branded “upper-tier” gaming paraphernalia or lifestyle products.
 

Lakados

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Ugh, don't give them ideas... 💸
Nah I expect the 4030 to be 3050ti’s rebranded. Probably $300 USD? At launch to then be wiggled once AMD and Intel put something out in that performance space to “compete”.
 

ChadD

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If Intel had launched with crap drivers it would have killed them. OEM’s pay them a lot for support it would have been a financial blunder that the board would have ousted the CEO over and the replacement would have been instructed to shut the project down.

AMD for sure is going to price match Nvidia, and they will shut down their more cost effective options as long as Intel doesn’t have a direct competitor in that specific market segment.

AMD gets limited fab time and they will direct that time at what nets them the most profit. I expect a trickling of lower and mid tier GPU’s letting their excess stock fill that gap with a focus on their console contracts and a push on workstation, server, and datacenter parts.

To fill the gap I also expect branded swag and partnerships. AMD branded “upper-tier” gaming paraphernalia or lifestyle products.
You could be right. I don't believe Intels driver "issues" are really that big a deal. From everything I have seen reported by people that have touched them... the driver is perfectly stable. (which is all OEMs care about) The issue is performance... well if DX12 stuff runs as expected and DX 11 stuff runs stable but just a bit slower then expected. SO WHAT. That isn't going to be an issue for OEMs. I mean they are going to be shipping workstation cards... so your saying their drivers would kill them, but they are going to release workstation cards where unstable drivers would be a disaster.

The main issue for Intel that looks like it will keep them from ever being a player is simply stated as ego. Intel has a massive ego and their current CEO is from the old at Intel WE ARE the best of the best cloth. (When he took over initially I thought oh good an engineer, then quickly realized OH he is one of those Intel as the pope types) I would suspect the main reason we haven't seen retail Intel cards yet is simple, the CEO is going to be super upset when it is clear Intel is not #1 in anything. Even if they can claim #1 in low end, or #1 value in mid range cards ect... Intels GPU division can sell that to Intel leadership. With a product that is going to be clearly #2 at best and likely #3... Intel just can't handle it. They would rather tap out on retail cards then be forced to admit being anything less then best.

They need to just get a GPU out and into gamers hands. Once that happens the driver team can get real world feedback and get the performance numbers up. Stability isn't going to be an issue... and having said that no GPU maker has ever been immune to having the odd rare game crash. You can't find those to fix... if you don't let real customers have the product.

I'm convinced at this point Intel will be playing catch up with GPUs for a few years before they abandon the idea of retail GPUs. They need to get product out so the strengths and weaknesses of their cards can be hashed out. Right now according to them they have basically all ready finished the second gen design, and are well into third generation designs. As cool as it is to hear code names 4 or 5 generations out its a recipe for failure. Whatever sucks about this generation of Arc... is going to also be part of gen 2, and likely 3 at this point. Whatever is great about gen 1.... may get bumped out of the 2nd or 3rd gen design. They need real world feedback and you can't get that with a few hundred samples. Seems like Intel will always have a design in the wings that is going to win... that will never come in time to actually win.
 

Armenius

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You could be right. I don't believe Intels driver "issues" are really that big a deal. From everything I have seen reported by people that have touched them... the driver is perfectly stable. (which is all OEMs care about) The issue is performance... well if DX12 stuff runs as expected and DX 11 stuff runs stable but just a bit slower then expected. SO WHAT. That isn't going to be an issue for OEMs. I mean they are going to be shipping workstation cards... so your saying their drivers would kill them, but they are going to release workstation cards where unstable drivers would be a disaster.

The main issue for Intel that looks like it will keep them from ever being a player is simply stated as ego. Intel has a massive ego and their current CEO is from the old at Intel WE ARE the best of the best cloth. (When he took over initially I thought oh good an engineer, then quickly realized OH he is one of those Intel as the pope types) I would suspect the main reason we haven't seen retail Intel cards yet is simple, the CEO is going to be super upset when it is clear Intel is not #1 in anything. Even if they can claim #1 in low end, or #1 value in mid range cards ect... Intels GPU division can sell that to Intel leadership. With a product that is going to be clearly #2 at best and likely #3... Intel just can't handle it. They would rather tap out on retail cards then be forced to admit being anything less then best.

They need to just get a GPU out and into gamers hands. Once that happens the driver team can get real world feedback and get the performance numbers up. Stability isn't going to be an issue... and having said that no GPU maker has ever been immune to having the odd rare game crash. You can't find those to fix... if you don't let real customers have the product.

I'm convinced at this point Intel will be playing catch up with GPUs for a few years before they abandon the idea of retail GPUs. They need to get product out so the strengths and weaknesses of their cards can be hashed out. Right now according to them they have basically all ready finished the second gen design, and are well into third generation designs. As cool as it is to hear code names 4 or 5 generations out its a recipe for failure. Whatever sucks about this generation of Arc... is going to also be part of gen 2, and likely 3 at this point. Whatever is great about gen 1.... may get bumped out of the 2nd or 3rd gen design. They need real world feedback and you can't get that with a few hundred samples. Seems like Intel will always have a design in the wings that is going to win... that will never come in time to actually win.
The driver seems to be fine, it's the software that interacts with the driver that is the issue. Tech Jesus did a breakdown of the issues and there are simple things like inconsistency between the different areas of the software to features being downright broken. It seems like there is no communication happening between the different teams working on Arc, and Intel really needs to put in the effort to address that if they want to be taken seriously in the discreet GPU market.
 
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Lakados

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You could be right. I don't believe Intels driver "issues" are really that big a deal. From everything I have seen reported by people that have touched them... the driver is perfectly stable. (which is all OEMs care about) The issue is performance... well if DX12 stuff runs as expected and DX 11 stuff runs stable but just a bit slower then expected. SO WHAT. That isn't going to be an issue for OEMs. I mean they are going to be shipping workstation cards... so your saying their drivers would kill them, but they are going to release workstation cards where unstable drivers would be a disaster.

The main issue for Intel that looks like it will keep them from ever being a player is simply stated as ego. Intel has a massive ego and their current CEO is from the old at Intel WE ARE the best of the best cloth. (When he took over initially I thought oh good an engineer, then quickly realized OH he is one of those Intel as the pope types) I would suspect the main reason we haven't seen retail Intel cards yet is simple, the CEO is going to be super upset when it is clear Intel is not #1 in anything. Even if they can claim #1 in low end, or #1 value in mid range cards ect... Intels GPU division can sell that to Intel leadership. With a product that is going to be clearly #2 at best and likely #3... Intel just can't handle it. They would rather tap out on retail cards then be forced to admit being anything less then best.

They need to just get a GPU out and into gamers hands. Once that happens the driver team can get real world feedback and get the performance numbers up. Stability isn't going to be an issue... and having said that no GPU maker has ever been immune to having the odd rare game crash. You can't find those to fix... if you don't let real customers have the product.

I'm convinced at this point Intel will be playing catch up with GPUs for a few years before they abandon the idea of retail GPUs. They need to get product out so the strengths and weaknesses of their cards can be hashed out. Right now according to them they have basically all ready finished the second gen design, and are well into third generation designs. As cool as it is to hear code names 4 or 5 generations out its a recipe for failure. Whatever sucks about this generation of Arc... is going to also be part of gen 2, and likely 3 at this point. Whatever is great about gen 1.... may get bumped out of the 2nd or 3rd gen design. They need real world feedback and you can't get that with a few hundred samples. Seems like Intel will always have a design in the wings that is going to win... that will never come in time to actually win.
I don’t think they will abandon them, the datacenter market has more money in GPU’s right now than it does CPU’s. Accelerator cards are the current hot item that they need, specialized processing is king of cost per watt and there is too much “savings” in using them.
Intel literally can’t afford to let that market slip to Nvidia and AMD it would actually kill them.

But I really think that Intel has been playing down how bad the drivers are. Many of the Chinese forums from their initial launch were flaming them as garbage and unstable. It was not a good time for Intel over there, it’s gotten better now for sure, thought I don’t know if it’s because they actually fixed the drivers or just paid to have the negative comments removed. I mean their ability to censor things there can be really useful if you need to cover a shitty product launch.

I have no doubt Intel will launch a good set of cards but sadly for them they will be doing it in the middle of a massive oversupply.

I really hope they are willing to take a razor thin margin on them because if Nvidia and AMD are going to be protecting their projected 63% margin on their cards that leaves Intel a lot of wiggle room to take market share especially in the OEM space.

I do somewhat agree they should have just launched it though. In retrospect had they silently slipped their A3 series in place of their normal onboard GPU’s in the mobile space they could have gathered a lot of usable metrics and worked to improve drivers in a market that simply needs stability and not performance. It would have gotten them a lot of initial market share.
 

sfsuphysics

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So where are miners listed in those revenue streams? Ones who actually bought mining cards clumped into "data centers" and every other card is "gamers" ?
 

Lakados

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Feb 3, 2014
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6,014
So where are miners listed in those revenue streams? Ones who actually bought mining cards clumped into "data centers" and every other card is "gamers" ?
They list the CMP card sales as their own figure in their financial reports, they have simply been “nominal” as they were scarce to begin with.

Nvidia saw a 33% shortfall in expected CMP revenues in Q2 last year to $266 million, followed by $105 million in Q3 and then $24 million in Q4.
 

duronboy

Gawd
Joined
Feb 1, 2003
Messages
549
Trying to figure out how those millions translate into cards. Anyone know what they sell the chips for? That's pretty much the only physical thing they sell to AIB makers, right? I was looking the other day for a modern GPU BOM and I found some firm selling an old one, but nothing free. I found BOMs for iphones, but...
 

ChadD

Supreme [H]ardness
Joined
Feb 8, 2016
Messages
5,609
The driver seems to be fine, it's the software that interacts with the driver that is the issue. Tech Jesus did a breakdown of the issues and there are simple things like inconsistency between the different areas of the software to features being downright broken. It seems like there is no communication happening between the different teams working on Arc, and Intel really needs to put in the effort to address that if they want to be taken seriously in the discreet GPU market.
Fair...

Those also tend to be problems that only get solved when you launch a product. I believe Intel as segmented as they are would get on the same page given a reason to do so. These are the sorts of things that get solved when the heat is on. Not when the cards they have made are sitting in a warehouse... waiting on some mid level head at Intel to risk his neck and say go. I'm going to guess like most corp inaction it comes down to terrible incentive programs. Probably a ton of middle management not wanting to Screw with their margin numbers. I have worked in a few different industries... and the big corps I have dealt with are always the same. Bonuses and other incentives tied heavily to margin. There are probably a bunch of Intel people that would rather see Arc sit... so they can rock their 55% margin numbers and get their nice bonus... rather then launch hit 40% and get ZIP. Just a complete guess.... seen it many times though, no one incentivized to swing if its a potential miss ever.
 

ChadD

Supreme [H]ardness
Joined
Feb 8, 2016
Messages
5,609
I don’t think they will abandon them, the datacenter market has more money in GPU’s right now than it does CPU’s. Accelerator cards are the current hot item that they need, specialized processing is king of cost per watt and there is too much “savings” in using them.
Intel literally can’t afford to let that market slip to Nvidia and AMD it would actually kill them.

But I really think that Intel has been playing down how bad the drivers are. Many of the Chinese forums from their initial launch were flaming them as garbage and unstable. It was not a good time for Intel over there, it’s gotten better now for sure, thought I don’t know if it’s because they actually fixed the drivers or just paid to have the negative comments removed. I mean their ability to censor things there can be really useful if you need to cover a shitty product launch.

I have no doubt Intel will launch a good set of cards but sadly for them they will be doing it in the middle of a massive oversupply.

I really hope they are willing to take a razor thin margin on them because if Nvidia and AMD are going to be protecting their projected 63% margin on their cards that leaves Intel a lot of wiggle room to take market share especially in the OEM space.

I do somewhat agree they should have just launched it though. In retrospect had they silently slipped their A3 series in place of their normal onboard GPU’s in the mobile space they could have gathered a lot of usable metrics and worked to improve drivers in a market that simply needs stability and not performance. It would have gotten them a lot of initial market share.
To go along with my above post....

Yes Intel needs datacenter/super computer GPUs.... they don't really need gaming. Gaming is just a well that would be nice. Even Nvidia hasn't been looking at gaming as their bread and butter for awhile now. Even with the Crypto down turn their highest revenue and highest profit markets are not gaming.

Seeing Intel announce "workstation" cards convinces me even more that the gaming market is likely to be abandoned. Or purposely screwed over by middle management at Intel to keep numbers up.
 

LukeTbk

2[H]4U
Joined
Sep 10, 2020
Messages
2,502
Anyone know what they sell the chips for?
Apparently a TSMC 7nm wafer were getting up around $10,000 (in counter part I imagine yield got better over time has they raised their price) if Samsung is similar and if we use the 400mm square 3070 has the average chips size, if you do a raw attempt of chips on them,

according to this:
http://www.silicon-edge.co.uk/j/index.php/resources/die-per-wafer

140 attempt by wafer, with a 80% yield you have around $90 by 3070 type of GPU just there, if it is 85% of the raw cost of the GPU they sell what the foundry charge them in wafer cost and they want a 65% raw operating margin, maybe they charge around $170-$175 for a 3070 type GPU ? 60% more for a 3080 type of gpu ($280).

that could match the $200 cost of the fancy cooler + ram, a bit of the rest to end up with a $600 BOM cost of a 3080 a bit over $700 for the 3090 with more rams rumoured around.
 
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