NVIDIA to Lengthen Product Cycle?

by Anton Shilov
06/20/2003 | 10:23 AM

NVIDIA said at Thomas Wiesel Growth Conference yesterday that there are still problems with yields of 0.13 micron-based products and the company lengthens its cycles.

According to In Play/Briefing.com, NVIDIA stock was downgraded to Equal Weight at Pacific Growth. According to the firm, at the Thomas Weisel growth conference, NVIDIA indicated that transition to 0.13 micron has been more challenging than expected, yields are not where the company thought and cycle times are being pushed out.

From the company’s top executives we already know that there are a number of problems with products made using 0.13 micron fabrication process these days and the yields of the GeForce FX family are not as high as the company originally estimated. Nevertheless, this is the first time I hear about product cycle lengthening from NVIDIA. Unfortunately, there is no broadcast from Thomas Wiesel conference and I cannot say who of NVIDIA officials actually told this interesting fact to the masses. One thing worth our attention is that NVIDIA has been very open about its challenges with 0.13 micron fabrication process since the beginning of its 2004 fiscal year.

It is fully logical for NVIDIA to push its product cycle forward in case it has relatively poor yields of existing graphics processors at the moment. There are no indications which products are [from now] set to come later than expected originally, but I believe that the NV3x products with boosted performance will be impacted first. The NV40 and derivates will surely come in early 2004.

Additionally, Pacific Growth’s channel checks have shown that game console sales are slower than the firm had been expecting as console prices have not come down as much as was anticipated. Firm now looking for NVDIA to see FY04 and FY05 XBOX revenues of $279.6 million and $230 million versus previous estimates of $314.6 million and $345.1 million.