Earlier this year Nvidia Corp. merged chipset and system-on-chip development teams in order to strengthen the Tegra product line. On Thursday chief executive officer of Nvidia officially said that the company was no longer building chipsets, which probably means that the firm no longer orders appropriate chips from Taiwan Semiconductor Manufacturing Company.
"We are not building any more chipsets, we are building SoCs now. We are building Tegra SoCs, and so we are going to take integration to a new level. [...] The chipset business [has] not grown largely this year because we have not really been expanding the sales of it," said Jen-Hsun Huang, chief executive officer of Nvidia.
But while the company no longer develops core-logic sets, it does expect its current offerings to continue shipping well into next financial year. The head of the company, unfortunately, refused to comment whether revenue share of the chipset business was already at 15% in Q3 FY2011 (down from traditional 30+%) and how fast that share will decline.
"On the AMD side, our AMD chipset remains quite well positioned. My sense is that our chipset there will continue to ship throughout next year. The second thing is the MCP89, the latest and the last generation of Intel chipset that we built was just a really wonderful piece of engineering and the work that we did with Apple was great, and they are going to continue to use that for some time. So, I think that the tail off is just going to take a little longer than people expected. But I do not know exactly how long," said Mr. Huang.
Nvidia reported revenue of $843.9 million for the third quarter of fiscal 2011 ended October 31, 2010, up 4% from the prior quarter and down 6.6% from $903.2 million from the same period a year earlier. Sales of consumer GPUs - which includes sales of discrete GeForce chips and chipsets with integrated GeForce graphics cores - accounted for 68.9% ($581.9) of the company's sales.
On a GAAP basis, the company recorded net income of $84.9 million, or $0.15 per diluted share, compared with a GAAP net loss of $141.0 million, or $0.25 per share, in the previous quarter and GAAP net income of $107.6 million, or $0.19 per diluted share, in the same period a year earlier. GAAP gross margin was 46.5% compared with 16.6% in the previous quarter and 43.4% in the same period a year earlier.