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Earlier this year Nvidia Corp. merged chipset and system-on-chip development teams in order to strengthen the Tegra product line. On Thursday chief executive officer of Nvidia officially said that the company was no longer building chipsets, which probably means that the firm no longer orders appropriate chips from Taiwan Semiconductor Manufacturing Company.

"We are not building any more chipsets, we are building SoCs now. We are building Tegra SoCs, and so we are going to take integration to a new level. [...] The chipset business [has] not grown largely this year because we have not really been expanding the sales of it," said Jen-Hsun Huang, chief executive officer of Nvidia.

But while the company no longer develops core-logic sets, it does expect its current offerings to continue shipping well into next financial year. The head of the company, unfortunately, refused to comment whether revenue share of the chipset business was already at 15% in Q3 FY2011 (down from traditional 30+%) and how fast that share will decline.

"On the AMD side, our AMD chipset remains quite well positioned. My sense is that our chipset there will continue to ship throughout next year. The second thing is the MCP89, the latest and the last generation of Intel chipset that we built was just a really wonderful piece of engineering and the work that we did with Apple was great, and they are going to continue to use that for some time. So, I think that the tail off is just going to take a little longer than people expected. But I do not know exactly how long," said Mr. Huang.

Nvidia reported revenue of $843.9 million for the third quarter of fiscal 2011 ended October 31, 2010, up 4% from the prior quarter and down 6.6% from $903.2 million from the same period a year earlier. Sales of consumer GPUs - which includes sales of discrete GeForce chips and chipsets with integrated GeForce graphics cores - accounted for 68.9% ($581.9) of the company's sales.

On a GAAP basis, the company recorded net income of $84.9 million, or $0.15 per diluted share, compared with a GAAP net loss of $141.0 million, or $0.25 per share, in the previous quarter and GAAP net income of $107.6 million, or $0.19 per diluted share, in the same period a year earlier. GAAP gross margin was 46.5% compared with 16.6% in the previous quarter and 43.4% in the same period a year earlier.
 


This article provides insight into Nvidia's strategic shift from developing chipsets to focusing on System-on-Chip (SoC) products within the Tegra product line. Here are some key points from the article:
  • Nvidia merged its chipset and SoC development teams earlier in the year to strengthen the Tegra product line.
  • The company's CEO, Jen-Hsun Huang, confirmed that Nvidia is no longer building chipsets but is now focusing on developing Tegra SoCs, aiming to enhance integration in their products.
  • Despite this shift, Nvidia expects its current offerings to continue shipping well into the next financial year.
  • Huang mentioned that revenue from the chipset business may already be declining, with uncertainties about the exact figures and the rate of decline.
  • Nvidia's AMD chipset and the last generation Intel chipset, MCP89, are expected to remain in use for some time.
  • In the third quarter of fiscal 2011, Nvidia reported revenue of $843.9 million, a 4% increase from the previous quarter but a 6.6% decrease from the same period a year earlier.
  • Consumer GPU sales were significant, accounting for 68.9% of the company's revenue, with sales of discrete GeForce chips and chipsets featuring integrated GeForce graphics cores.
  • The company recorded a GAAP net income of $84.9 million for the quarter, showing a positive shift from a previous net loss and a year-over-year comparison.
This transition indicates Nvidia's focus on SoC development and its strategic approach to product integration. The company's financial performance highlights the significance of consumer GPU sales in its revenue stream. By emphasizing Tegra SoCs and consumer GPUs, Nvidia aims to solidify its position in the market and drive future growth.
 


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