Nvidia Reports Successful Transition to New Process Technology

Nvidia Admits: GeForce GTX 280, 260 Are Too Expensive to Make

by Anton Shilov
11/07/2008 | 11:52 PM

Nvidia Corp. said during a conference call with the financial analysts that it had transited its mainstream and performance-mainstream graphics processing units (GPUs) to a new process technology, which helps to reduce costs. In addition, the firm confirmed that it is about to release its high-end graphics processors made using 55nm process technology.

 

“Improving gross margin while managing operating expenses enabled us to significantly improve our operating fundamentals. We transitioned our performance segment GPUs to 55nm and are now poised to recapture lost share,” said Jen-Hsun Huang, president and chief executive at Nvidia, during the most recent conference call with financial analysts.

In particular, Nvidia’s GeForce 9600 GT, GeForce 9800 GT, GeForce 9800 GTX+ and some other similar products now feature GPUs made using 55nm process technologies, which means that they are less expensive to make and may offer higher performance due to higher clock-speeds. Additionally, Nvidia started shipping its chipsets with integrated graphics that are also made using 55nm fabrication process.

“We have 65nm inventory remaining, but everything we are ramping now is 55nm and everything on the high-end that we are shipping now is 55nm,” added Mr. Huang, implying that Nvidia is ready with its code-named GT200b/GT206 graphics processor, which is a lower-cost version of the GT200/G200 that powers GeForce GTX 260 and GTX 280 graphics cards.

The head of Nvidia expressed hopes that the company would regain market share in the high-end segment thanks to newer and less expensive graphics processor. The company also admitted that the GeForce GTX-series graphics cards were too expensive to manufacture to react quicky on ATI's offence with the Radeon HD 4800 lineup.

“We absolutely will regain market share and this is a segment where technology matters, performance matters, architecture matters, and we have the best lineup. Our challenge was never architectural leadership, our challenge was that we were caught flat footed at 65nm and our chip and board solution was just too expensive. And so, we have made that transition in Q2 and we are in Q3 and we are through that transition, and we are off and running,” said Mr. Huang.

For the third quarter of fiscal 2009, revenue was $897.7 million compared to $1.12 billion for the third quarter of fiscal 2008, a decrease of 20%. For the nine months ended October 26, 2008, revenue increased to $2.94 billion compared to $2.90 billion for the nine months ended October 28, 2007, an increase of 2%.