A reader sent me the link to a webcast with Mike Hara, Vice President of Investor Relations for NVIDIA, recorded during Thomas Wiesel growth conference on Thursday. Thanks to that, I now can share a lot more information about NVIDIA’s current activities in addition to “cycle issues” we reported about on Friday (see this news-story). 

Apparently, yields of NVIDIA’s products made using 0.13 micron technology are still lower than the company originally thought them to be. Furthermore, because of very high complexity of modern graphics processors, it takes more time to re-spin them. According to Mike Hara, it takes around 10 weeks to re-spin a 0.15 micron GPU, and now it takes around 14 weeks  (NVIDIA’s original target was 12 weeks) to re-spin a 0.13 micron GPU. As a consequence, the yield issues are addressed slower than before and this may also impact the announcements of more advanced products.

Because the yields of the GeForce FX 5600 and GeForce FX 5900 parts are lower, NVIDIA cannot flood the market with such GPUs due to troubles with supply. They indicate relatively strong demand for the new graphics processors and express intentions to build more inventory in order to sell more powerful graphics chips. As 0.13 micron products represent a small part of the company’s business, its gross-margins should not be tangibly affected this quarter.

Mike Hara commented that he had not said which product would come out this Fall, but he said that this product had already been taped out at IBM and its commercial manufacturing will begin in the fourth quarter. I believe this was told about the code-named NV40 graphics processor that is set to emerge later this year. Note that in case it will require two re-designs after the initial tape out (and if every new redesign takes 14 weeks), the graphics chip will only be able to come here in very late 2003 (six or seven month from now), but it is more likely to massively appear in 2004. If NVIDIA requires only one re-spin of the NV40 to achieve proper performance and yield, NV40 may make it into the market this Fall.

NVIDIA official did not comment on rumours in regards ATI Technologies’ presumable design win with Microsoft XBOX 2, however, he said that no final decision had been made by Microsoft thus far. Currently it is known that XBOX 2 needs to maintain backwards compatibility with the original XBOX and all the decisions concerning suppliers of various components need to be developed should be made by the end of this calendar year. In short, we will soon learn who of the leading graphics chip designers will build graphics logic for Microsoft XBOX 2 and who of CPU makers will supply microprocessors for the console.