14 DAY TRIAL // After posting a record profit and a very high market share, it looks like Nvidia is now facing problems because of its suppliers that cannot meet the high demand. Shares of Nvidia fell almost 2 percent immediately after the company announced the need to find more suppliers because of a high demand of graphics chips and other computer hardware parts that are made by it.
According to Jen-Hsun Huang, Nvidia's chief executive officer, who was cited by the news site ExtremeTech, the company's expansion on the graphics market is making good progress and the results are very good. "Our ongoing strategy to extend the reach of the (graphics microprocessor) is paying off". As the graphics processors become more and more powerful, with tremendous parallel computing capabilities, their use may extend to other application beside the traditional graphics ones. All in all the last few months were very good for Nvidia's desktop graphics processors as their sale rose by 37 percent from a year ago, while the big market boom was the mobile segment of the market where its graphics chips saw a surge of 129 percent.
As the demand for graphics chips and other hardware parts is getting higher, chipmakers are hard pressed to satisfy all clients and that leads to supplying problems. "We're just communicating that the industry is tight," Huang said on a conference call, while chief financial officer Marvin Burkett announced that there may be a couple of limitations concerning the total number of end products that will be delivered by Nvidia, "manufacturing is somewhat limited and our inventories are low".
At the same time, according to the financial officer, the Nvidia company is working really hard to eliminate the "supply constraints" for the next quarter. While the manufacturing company announced that an entire new line of graphics cards and chips will be launched in the following months, it looks that the supplying problems encountered by Nvidia may hamper company's plans.