Graphics-Chip Maker Nvidia Lifts Revenue Amid Videogame Boom -- 3rd Update
By Maria Armental
Graphics-chip maker Nvidia Corp. posted record quarterly
revenue, capping a year dominated by pandemic-fueled demand for its
chips as the company grappled with supply shortages.
Nvidia on Wednesday reported fiscal fourth-quarter revenue of $5
billion, up 61% from a year earlier, generating $2.31 in earnings a
share. It also said it expects about $5.3 billion in revenue for
the current quarter, ahead of Wall Street's expectations.
Demand for some of Nvidia's chips has been so hot that it has
outpaced the company's ability to increase production, adding to
chip-supply shortages riling the semiconductor industry.
Nvidia's newest graphics cards were a holiday sensation, Chief
Financial Officer Colette Kress said during an earnings call. She
added that some inventories are likely to remain low in the first
quarter even as Nvidia increases supply. "Throughout our supply
chain, stronger demand globally has limited the availability of
capacity and components," Ms. Kress said.
President Biden on Wednesday signed an executive order directing
a broad review of supply chains for semiconductors and other
Nvidia's game-chip business posted a record $2.5 billion in
revenue for the December quarter, up 67% from a year earlier. The
company's graphics chips have proved useful for other tasks as
well, including artificial-intelligence calculations that underpin
gadgets such as smart speakers and product-recommendation
The chip maker joins other technology companies that expect the
coronavirus pandemic to continue to stoke demand for
remote-computing services. Microsoft Corp. last month reported a
healthy rise in sales, driven by its cloud-computing division, with
further growth expected in the current quarter. Amazon.com Inc.,
Apple Inc. and Alphabet Inc.'s Google have all recorded persistent
demand for digital offerings as the pandemic drags on.
Nvidia's high-performance graphics chips have also been popular
with cryptocurrency miners. The company estimates it had $100
million to $300 million in cryptocurrency related sales, Ms. Kress
To avoid the use of its graphics cards by cryptominers, the
company is launching a chip aimed at the cryptocurrency market. Ms.
Kress said the new chip is expected to generate about $50 million
in revenue in the current quarter. Nvidia has added software to
detect when its graphics cards are used by cryptocurrency miners,
in an effort to slow the cards' performance and direct the miners
to the company's new product line.
Through Wednesday's close, the Santa Clara, Calif.-based
company's shares have more than doubled over the past 12 months.
Nvidia last year surpassed Intel Corp. as the most valuable U.S.
Shares in Nvidia rose 2.5% to $579.96 on Wednesday.
Chief Executive Jensen Huang wants to expand Nvidia's focus with
the proposed $40 billion acquisition of U.K.-based chip designer
Arm Holdings from SoftBank Group Corp. Arm's circuit designs are in
almost all smartphones, and its acquisition would open up a new
business line for Nvidia.
The proposed acquisition has attracted regulatory scrutiny. Some
rivals are concerned about the prospect of one of their chip-making
competitors owning Arm, potentially undermining its attractiveness
as a neutral supplier. Nvidia has said it supports keeping Arm's
open business model,
"We are making good progress toward acquiring Arm," Mr. Huang
The industry's chip-supply issues have hit car makers
particularly hard. Companies such as General Motors Co., Ford Motor
Co. and Volkswagen AG have idled some of their production capacity
as they await critical parts.
Nvidia said its automotive sales totaled $145 million, up 16%
from the previous quarter and down 11% from a year earlier. Its
automotive division has experienced several quarters of declines,
reflecting disrupted car production and sagging sales as consumers
put off major purchases during the pandemic. Automotive revenue
fell 23% for the year.
Ms. Kress said the sequential increase partly reflects a
recovery in some legacy business, as well as demand for processors
that enable more cutting-edge features such as autonomous
Write to Maria Armental at firstname.lastname@example.org
(END) Dow Jones Newswires
February 24, 2021 18:40 ET (23:40 GMT)
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