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Nvidia is surprisingly optimistic

Nvidia is surprisingly optimistic

Nvidia’s Chief Financial Officer (CFO) Colette Kress confirmed in an interview that in the second half of 2022 one clear improvement in the range of their own graphics cards calculates. The new RTX 4000 graphics cards are also expected during this period. Specifically, Kress says the following when asked if Nvidia is confident of being able to meet the unabated high demand in the graphics card sector: We believe we are in a great position in the second half of 2022, in terms of the entire range in terms of our expected demand […]. Apparently that sounds so surprisingly optimistic that her interviewee Rajvindra Gill prefers to ask for confirmation of the statement again. In the audio recording of the call at Seeking Alpha you will find the right part from minute 22:26 (click on Play Earnings Call under the link above).
Curious side note: The transcript of the interview states that Kress would confidently confirm her statement with the words “No debate”. At the appropriate point in the conversation (approx. 11:48 p.m.), we hear a more cautious We hope to be in this position. Nevertheless, it is remarkable that Nvidia sees itself in such a good position for the second half of the year, especially since Kress not only says this twice in this conversation, but also made similar statements at the end of 2021. Otherwise, on the other hand, there are hardly any signs of a significant improvement in 2022, quite the opposite. You can find out more about the bad omens in our current CES podcast and in the following hardware outlook: 23 12 CES analysis What to expect in this hardware year

How should Nvidia’s optimism be assessed?

The most important things first: Even if Nvidia’s optimism is justified, that doesn’t mean that the improvement in the situation will have a noticeable effect on the graphics card market from mid-2022 (or the release of RTX 4000). It is more likely that availability and, above all, prices will improve slowly at best. The basis of certain optimism is likely at the same time the change to chip manufacturer TSMC from Taiwan sone. On the one hand, the progressive expansion of factories and the switch to new manufacturing processes at other TSMC customers such as Apple could free up important capacities for Nvidia, as we reported at the end of 2021. On the other hand, Nvidia is said to have secured high production capacities through prepaid billion-euro contracts. Gill also addresses this deal in the interview above, without naming TSMC specifically. At a minimum, Kress confirms that there’s a wide range of new capacity contracts (along with other factors like logistics and new product testing) and that paying upfront has helped with some of them. In this respect, too, the reports linked in the paragraph above and the most recent statements by Kress fit together. From the player’s point of view, however, the crucial question remains when graphics cards will finally be more available again and become significantly cheaper again. Despite the latest statements, we remain rather pessimistic for 2022, but let us be taught otherwise. How do you rate Nvidia’s statements? Desperate purposeful optimism, a solid reason to hope for improvement in 2022 or something in between? Feel free to write it in the comments!

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