Sales tripled
AI chip manufacturer Nvidia reports records
November 22, 2023, 1:34 p.m
Listen to article
This audio version was artificially generated. More info | Send feedback
Artificial intelligence is the trend of the moment. This requires particularly powerful chips – and Nvidia is way ahead. Driven by great demand, the company tripled its sales and wants to continue to grow. The restrictions in China business are more than offset.
The US microchip manufacturer Nvidia has once again exceeded all expectations: The company’s sales in its third quarter from the end of July to the end of October tripled compared to the previous year to 18.1 billion dollars, as Nvidia announced. Analysts had expected around $16 billion. Profit was $9.2 billion, more than thirteen times the previous year’s figure.
Nvidia supplies the microchips necessary for artificial intelligence (AI). The company was founded 30 years ago by US-Taiwanese Jen-Hsun “Jensen” Huang and initially focused on graphics cards that offered computer gamers better-resolution images. These high-performance microchips are now also used in the development of AI.
However, Nvidia does not produce its chips itself, but rather develops them and outsources the manufacturing to other companies. In order to meet the persistently high demand, binding and non-cancellable orders were placed with contract manufacturers such as TSMC. This ensures preferential delivery.
Analyst: Nvidia is working on a sanctions chip for China
At the end of May, Nvidia had already reached a market value of more than a trillion dollars. Otherwise, only the technology group Apple, the software giant Microsoft, the online trading giant Amazon, the Google parent company Alphabet and the Saudi Arabian oil company Aramco have such a market value. Since the beginning of the year alone, the stock has gained 240 percent.
Nvidia expects continued steep growth in its fourth quarter. Sales will rise to $20 billion, the company said – despite the US government’s new restrictions on semiconductor exports to China. Chief Financial Officer Colette Kress said the “negative effects” on the China business would be offset by other regions.
Meanwhile, according to analysts, Nvidia is developing new AI chips specifically for the People’s Republic in order to meet current requirements. However, this would tie up development capacity for products whose sale could also be banned in the next round of sanctions, criticized analyst Jacob Bourne from the industry service Insider Intelligence.