NVIDIA CFO Shares Good News On When GPU Supply Will Improve So You Can Actually Buy One
Have you tried to purchase a graphics card recently? You have our condolences. Supply remains well short of demand, leading to frustrating situations where scalpers can charge obscene premiums on eBay, and retail vendors can force unwanted bundles on consumers when cards are actually in stock. It stinks, but the situation may improve in 2022 (knock on wood).
So says NVIDIA's chief financial officer, Colette Kress, who offered up some encouraging remarks at the UBS Global TMT virtual conference this week. According to Kress, NVIDIA is taking measures to "procure more supply" to meet the rabid demand for the company's GPUs, both from consumers and its add-in board (AIB) partners. NVIDIA anticipates those efforts beginning to pay off in the latter half of 2022.
"We've been able to grow quite well during this year, each quarter sequentially growing. And we do continue to plan to do that for Q4. So we believe we'll be in a better situation in terms of supply, when we look at the second half of next year," Kress said.
It's an interesting situation because even though demand for GPUs is far beyond the bounds of supply, NVIDIA is still selling a lot of graphics chips. NVIDIA is coming off a record quarter in which it raked in $7.1 billion in overall revenue. NVIDIA's gaming business accounted for the lion's share at $3.2 billion, which represents a 42 percent year-over-year increase.
Even so, PC gamers are having an incredibly difficult time tracking down graphics cards at anywhere near MSRP—they're either always sold out, or commanding inflated price tags from marketplace, second-hand, and sometimes even first-hand sellers.
It's a nuanced situation, but it all tracks back to there just not being enough supply to meet demand. So what's NVIDIA's strategy to get its hands on more GPUs? It boils down to signing longer term manufacturing capacity agreements. Kress did not get into the specifics of those agreements, but did suggest they're more than 12 months.
"We are also now procuring longer term. Longer term can be more than a year. And you've also seen us now enter into agreements that will take us out many years in terms of long-term capacity needs," Kress said.
As to the inflated prices that scalpers and even retailers are charging, Kress says the overall situation is beyond NVIDIA's control. However, what is in NVIDIA's control is what it charges to its AIB partners and OEMs.
"We'd love to bring that back down. We believe bringing that down really takes just providing a reasonable amount of supply in the market versus the lean amounts that we have today," Kress said.
You can listen to the full NVIDIA webcast for more of what Kress had to say. In short, however, the gist of the chat is that next year should see the shortage begin to ease up a bit. Here's hoping it actually plays out that way.