Thursday, January 17, 2019
Last year at CES, Nvidia's touted much about artificial intelligence (AI) and autonomous driving. But at a CES 2019 pre-show, Nvidia CEO Jen-Hsun Huang's focus clearly switched back to its latest PC GPUs, indicating that the GPU giant may have seen rising competition in the graphics card market, and decided it can no longer continue to take its leadership for granted.
Under Huang's leadership, the GPU giant has had a clear lead in the gaming PC graphics market over the past five years with its edges in graphics technologies and marketing.
Despite the fact that the graphics card market is shrinking, the company's over 70% market share and high profitability from its high-end graphics card product lines boosted the company's stock price to nearly US$300 in 2018 and allowed it to have more time to spend on developing artificial intelligence (AI) applications including those for autonomous driving, datacenter, medical care, drone and Internet of Things (IoT).
But the sharp rise in Nvidia's profits and stock price actually had mostly been boosted by the cryptocurrency mining sector. With the mining fad quickly dissipated, demand from the gaming market not rising fast enough and opportunities and profits from AI applications not picking up as expected, Nvidia apparently is rethinking its operation.
The collapse of the cryptocurrency mining market has left graphics card vendors with high inventories, and miners have been offloading their used cards in the second-hand market, resulting in a sharp sales drop in Nvidia's new GeForce RTX 2080Ti/2080/2070 graphics card. With Nvidia's financial results for its fiscal third quarter of 2019 showing weaker-than-expected results, the company has now taken a conservative attitude toward its fiscal fourth-quarter 2019.
To maintain its leadership in emerging technologies such as AI and autonomous driving, Nvidia will have to maintain its strong profitability from the gaming graphics card business. But as AMD and Intel have both been keen in investing in their GPU businesses, it seems a necessary move for Nividia to refocus on promoting its latest graphics products at CES 2019.
AMD, led by CEO Lisa Su, has seen stable operation and is outsourcing its new 7nm chips to Taiwan Semiconductor Manufacturing Company (TSMC), looking to improve their yield rates and performances.
AMD has already begun supplying its 7nm Radeon Instinct MI60 accelerator to datacenter players for AI and machine learning purposes and will begin supplying the new MI50 accelerator at the end of the first quarter 2019. Later in 2019, AMD will release its 7nm Navi-based GPU and in 2020 will start manufacturing GPUs using TSMC's 7+nm process in 2020.
Meanwhile, Intel has recruited ex-AMD executive Raja Koduri as its new chief architect, leading its R&D team to develop GPUs. The company has recently announced to release a discrete GPU prior to 2020 and is integrating new GPUs into its 10nm processors starting 2019.
In addition to the PC market, Intel is also expected to leverage the GPU business to cross into the datacenter, AI and machine learning markets.
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