Saturday December 01, 2018

NVIDIA Blames AMD for Excess GPU Inventory

NVIDIA CEO Jensen Huang suggests there may be others to blame for his company’s $700 million revenue miss and unexpected increase in midrange GPU inventory: in his latest earnings call, Huang pointed out there was "more than 12 weeks of inventory between us and the other brand," implying AMD was a factor. "Huang was asked how cryptocurrency, which accounted for only 10% of its quarterly revenue, expanded to one entire quarter’s worth of inventory. He stated this was because the channel also included AMD’s inventory."

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He explained that since NVIDIA’s GTX 1080 is the top-selling GPU and AMD’s RX 580 is number 24, the ratio of GTX 1080s to RX 580s in the channel inventory is 90:10. If AMD suddenly injects RX 580 GPUs into the channel and changes the inventory ratio to 50:50, it would create excess inventory, which is difficult to sell. The sudden rise in GPU inventory because of declines in crypto-related GPU demand suggests that this instance is a one-off and not affecting its long-term growth opportunities.

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