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NVIDIA Corp. Q4 2010 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 12:45 AM ET March 16 2010


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Our next question comes from the line of Suji DeSilva with Kaufman Brothers. Please proceed with your question.

Suji DeSilva - Kaufman Brothers

Thanks. Can you guys help us understand what was in the impact in the quarter from the constraint to perhaps in the guidance, as well as, just to give a sense to understand where the 40-nanometer constraints come off at some point?

David L. White

Well, it’s hard to figure out exactly how much we’re constrained by it. It’s probably on the order of $100 million, a couple $100 million, but the big picture is that 40-nanometer supply is constrained for the world. You know that the markets snap back a lot more quickly than people expected in the beginning of the year and it surely appears that Windows 7 is doing very well and I think it surely appears on top of that that GPU adoption is increasing.

People are -- we’ve always believed that, as you know, but we think that more and more people are enjoying their PC experience with GPUs and more and more PC manufacturers recognize the benefits of adding GPUs to their system.

So we’re seeing a pretty strong demand across the board, whether it’s desktop PCs or notebook PCs, we’re seeing increased demand in our workstation business and on top of that, we’re in the process of ramping a new architecture called Fermi that everybody’s really excited about.

Fermi is going to sweep across GeForce and our Quadro business and across our Tesla business and so we just have a lot of growth drivers going right now and we could surely use more supply.

Suji DeSilva - Kaufman Brothers

Great. And then one other question. On MCP, I know you’re going to fold that into GPU going forward but can you help us understand what the trajectory of that product by itself is or should we not -- should we think of it more being truly folded into the GPU in terms of forward revenues?

Jen-Hsun Huang

There’s a -- let me just -- let make a comment and then I will have David make some comments. The first thing is that GPU, MCP business was down quarter to quarter and we’re expecting it to grow quarter-to-quarter for Q1 and we’re in the process of ramping what is internally code named MCP-89, a 40-nanometer chip set and we’re really excited about that. And so next year, the chip set business is going to do nicely for us.

On top of that, we have created two new technologies that over time will supplement the MCP business that we’re transitioning out of. One of them is called the ION. ION will do for netbooks what GeForce does for PCs and we today had the, I think Acer announced today, well, I’m pretty sure Acer announced today at the Mobile World Conference our first second-generation ION design win.

And so my sense is that overtime the netbook market will segment, just as the PC market has and there’ll be basic netbooks based on atom and then there’ll be netbooks that are premium netbooks that are designed to deliver the best possible experience and those people are called ION netbooks.

And so if we can capture 10%, 25% of that marketplace, a market that is currently 40 million units and also the fastest growing segment of the PC industry that should -- ION should be a nice business for us.

And then the second technology Mike was talking about early, called Optimus, it’s really a game changer for us and it solves the single largest issue that has kept GPUs from growing further into the notebook marketplace and that’s power dissipation or battery life.

And so Optimus allows to us now to automatically, completely invisibly from the user to switch off to completely zero power state and consume absolutely no power when it is not in use and whenever the user uses an application that can benefit from a GPU we instantly turn on and the user never knows the difference.

And so you now have the best of battery life, as well as, the benefits of a GPU, the performance of a GPU without any compromise. And so those two technologies I think not only will help us grow our opportunity in the marketplace and hopefully make up more than plenty of the MCP business that’ll decline a couple of years from now.

Suji DeSilva - Kaufman Brothers

Okay, David. Thanks. That’s it.


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