The crypto disuption wasn't in this quarter, it was in the year ago quarter, and then in the following couple quarters after it ended, and they needed to work through returned OEM inventory. This is literally the first quarter in maybe 6-8 that was *not* "disrupted" by crypto. As the CFO said tonight, Nvidia has finally returned to baseline.
Crypto slowdown might be a reason, but another thing is the clear answer for their current situation. Margins on rtx gpus are at an all time low given the massive die sizes. Remember Nvidia was selling a few years ago the gtx680 at 500$ price point with a gpu size of 200ish mm2. Now they are selling the rtx 2070 at the same price with a size of 500+ mm2
Go look at NVIDIA's historical margins. Margins are lower than during the crypto craze, and I think margins are probably lower comparing price point to price point for the last few years, but NVIDIA has had a higher ASP with Turing so far so the margins are good.
The GTX 680 was 290 mm^2, btw. The 680 was at the top of their stack. It was a non-cut chip. The 2070 super is a cut chip with a higher priced part using the full die above it. You can't compare them directly. The 2070 non-super is 454 mm^2. The ASP of GPUs has been going up for a while. So, the 680 was NVIDIA's high margin part back then, but now you have the 2080 and 2080 Ti above the 2070 to take up that role. In any case, if you look at NVIDIA's gross margins for the quarter ending October 2012 (the 680 was released in March 2012), it was 53%. It mjst be noted that NVIDIA now has data center and automotive sales which are high margin areas, but NVIDIA was getting a 100% margin licensing fee from Intel in 2012, and with gaming now representing 50% of their revenue and with Switch sales being relatively lower margin, the GPU gaming margins cannot be too much worse than what they were getting in 2012, if at all.
In any case, all this is moot, because people aren't concerned about NVIDIA's margins, which are quite good at 60%. Rather, the issue raised in this article, and what is related largely to crypto and has absolutely nothing to do with die sizes or margins, is that their revenue is down.
"FY 2020" = Fiscal/Financial Year 2020. It's usually denoted by the calendar year in which it will end. I assume this is to help state what a companies finances will be like at the beginning of that calendar year.
"A fiscal year is an accounting period of 365(6) days that does not necessarily correspond to the calendar year beginning on January 1st. The fiscal year is the established period of time when an organization's annual financial records commence and conclude."
In particular most larger companies offset their fiscal year from the calendar year because they don't want to do all the extra end of year reporting over the Christmas holiday.
It's difficult to ignore the impact of the RTX GPU design costing a lot more and offering unimpressive gains in performance in order to incorporate a ray tracing capabilities. RTX cards are decidedly unappealing upgrades with regards to heat, power, price, and performance and it's bad to have an overall "meh" in those various dynamics all at once. Is there any word on developers making more titles that support it or is the tepid response on the software side still the norm?
So, a tepid response from the software side is confirmed or do you have nothing else with which to attack someone aside from commenting in an unrelated manner that NV is using AI and this is "natural progression" to make you feel better about yourself?
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MadManMark - Thursday, August 15, 2019 - link
The crypto disuption wasn't in this quarter, it was in the year ago quarter, and then in the following couple quarters after it ended, and they needed to work through returned OEM inventory. This is literally the first quarter in maybe 6-8 that was *not* "disrupted" by crypto. As the CFO said tonight, Nvidia has finally returned to baseline.yeeeeman - Friday, August 16, 2019 - link
Crypto slowdown might be a reason, but another thing is the clear answer for their current situation. Margins on rtx gpus are at an all time low given the massive die sizes. Remember Nvidia was selling a few years ago the gtx680 at 500$ price point with a gpu size of 200ish mm2. Now they are selling the rtx 2070 at the same price with a size of 500+ mm2Yojimbo - Friday, August 16, 2019 - link
Go look at NVIDIA's historical margins. Margins are lower than during the crypto craze, and I think margins are probably lower comparing price point to price point for the last few years, but NVIDIA has had a higher ASP with Turing so far so the margins are good.The GTX 680 was 290 mm^2, btw. The 680 was at the top of their stack. It was a non-cut chip. The 2070 super is a cut chip with a higher priced part using the full die above it. You can't compare them directly. The 2070 non-super is 454 mm^2. The ASP of GPUs has been going up for a while. So, the 680 was NVIDIA's high margin part back then, but now you have the 2080 and 2080 Ti above the 2070 to take up that role. In any case, if you look at NVIDIA's gross margins for the quarter ending October 2012 (the 680 was released in March 2012), it was 53%. It mjst be noted that NVIDIA now has data center and automotive sales which are high margin areas, but NVIDIA was getting a 100% margin licensing fee from Intel in 2012, and with gaming now representing 50% of their revenue and with Switch sales being relatively lower margin, the GPU gaming margins cannot be too much worse than what they were getting in 2012, if at all.
In any case, all this is moot, because people aren't concerned about NVIDIA's margins, which are quite good at 60%. Rather, the issue raised in this article, and what is related largely to crypto and has absolutely nothing to do with die sizes or margins, is that their revenue is down.
yankeeDDL - Friday, August 16, 2019 - link
The dates seem all to have an offset of 1 year.The data is for Q2 2019 (not 2020) and it is compared with last years (2018, not 2019).
Ian Cutress - Friday, August 16, 2019 - link
Nvidia is currently in its 2020 fiscal year, which ends on Jan 27. After that, they'll call it 2021.zamroni - Friday, August 16, 2019 - link
i bet this confusing term is created by it's finance department's innovation teamTams80 - Friday, August 16, 2019 - link
"FY 2020" = Fiscal/Financial Year 2020.It's usually denoted by the calendar year in which it will end. I assume this is to help state what a companies finances will be like at the beginning of that calendar year.
UltraWide - Friday, August 16, 2019 - link
"A fiscal year is an accounting period of 365(6) days that does not necessarily correspond to the calendar year beginning on January 1st. The fiscal year is the established period of time when an organization's annual financial records commence and conclude."DanNeely - Friday, August 16, 2019 - link
In particular most larger companies offset their fiscal year from the calendar year because they don't want to do all the extra end of year reporting over the Christmas holiday.PeachNCream - Friday, August 16, 2019 - link
It's difficult to ignore the impact of the RTX GPU design costing a lot more and offering unimpressive gains in performance in order to incorporate a ray tracing capabilities. RTX cards are decidedly unappealing upgrades with regards to heat, power, price, and performance and it's bad to have an overall "meh" in those various dynamics all at once. Is there any word on developers making more titles that support it or is the tepid response on the software side still the norm?bfonnes - Saturday, August 17, 2019 - link
I think that Nvidia has been using AI to help design their chips for 10+ years. This is all just a natural progression, so meh, to you.PeachNCream - Monday, August 19, 2019 - link
So, a tepid response from the software side is confirmed or do you have nothing else with which to attack someone aside from commenting in an unrelated manner that NV is using AI and this is "natural progression" to make you feel better about yourself?