Thursday, February 16th 2012

NVIDIA Kepler Yields Lower Than Expected.

NVIDIA seems to be playing the blame game according to a article over at Xbit. This is what they had to say, "Chief executive officer of NVIDIA Corp. said that besides continuously increasing capital expenditures that the company ran into in the recent months will be accompanied by lower than expected gross margins in the forthcoming quarter. The company blames low yields of the next-generation code-named Kepler graphics chips that are made at TSMC’s 28nm node. “Decline [of gross margin] in Q1 is expected to be due to the hard disk drive shortage continuing, as well as a shortage of 28nm wafers. We are ramping our Kepler generation very hard, and we could use more wafers. The gross margin decline is contributed almost entirely to the yields of 28nm being lower than expected. That is, I guess, unsurprising at this point,” said Jen-Hsun Huang, chief executive officer of NVIDIA, during a conference call with financial analysts.

NVIDIA’s operating expenses have been increasing for about a year now: from $329.6 million in Q1 FY2012 to $367.7 million in Q4 FY2012 and expects OpEx to be around $383 million in the ongoing Q1 FY2013. At the same time, the company expects its gross margins in Q1 FY2013 to decline below 50% for the first time in many quarters to 49.2%. Nvidia has very high expectations for its Kepler generation of graphics processing units (GPUs). The company claims that it had signed contracts to supply mobile versions of GeForce “Kepler” chips with every single PC OEM in the world. In fact, NVIDIA says Kepler is the best graphics processor ever designed by the company. [With Kepler, we] won design wins at virtually every single PC OEM in the world. So, this is probably the best GPU we have ever built and the performance and power efficiency is surely the best that we have ever created,” said Mr. Huang.

Unfortunately for NVIDIA, yields of Kepler are lower than the company originally anticipated and therefore their costs are high. Chief exec of NVIDIA remains optimistic and claims that the situation with Fermi ramp up was ever worse than that. “We use wafer-based pricing now, when the yield is lower, our cost is higher. We have transitioned to a wafer-based pricing for some time and our expectation, of course, is that the yields will improve as they have in the previous generation nodes, and as the yields improve, our output would increase and our costs will decline,” stated the head of NVIDIA.

Kepler is NVIDIA's next-generation graphics processor architecture that is projected to bring considerable performance improvements and will likely make the GPU more flexible in terms of programmability, which will speed up development of applications that take advantage of GPGPU (general purpose processing on GPU) technologies. Some of the technologies that NVIDIA promised to introduce in Kepler and Maxwell (the architecture that will succeed Kepler) include virtual memory space (which will allow CPUs and GPUs to use the "unified" virtual memory), pre-emption, enhance the ability of GPU to autonomously process the data without the help of CPU and so on. Entry-level chips may not get all the features that Kepler architecture will have to offer."Source: Xbit Laboratories
Add your own comment

75 Comments on NVIDIA Kepler Yields Lower Than Expected.

#1
TheMailMan78
Big Member
On a side note this explains why the new AMD GPU's are so damn expensive. Also thanks for the heads up Crap Daddy!
Posted on Reply
#2
LAN_deRf_HA
So are we going to get stuck with 28nm as long as we were stuck with 40nm? With this much going into it and the transition being so costly I doubt anyone will be eager to move on to the next process.
Posted on Reply
#3
jpierce55
I imagine we will be, it may have been better to wait another generation before moving on as it is. This news is not surprising to me. Nvidia has been doing good financially, so I expected it was external.
Posted on Reply
#4
Crap Daddy
All this time we were blaming AMD how greedy they are with the 7900 series. I'm really starting to think those 50 bucks or so over the right price may go directly to TSMC.
Posted on Reply
#5
erocker
But Nvidia said soon?! How dissappointing. :(
Posted on Reply
#6
ViperXTR
nVidia: We expected more from 7900
AMD: We expected higher yield from Kepler
Problem nVidia? trollface.jpg
Posted on Reply
#7
theonedub
habe fidem
It would be more surprising if there weren't issues. I'm looking forward to the next Nvidia offering.
Posted on Reply
#8
NC37
Every year it seems there is another production problem related to TSMC or GF. Really makes me want to ask an ATI exec if they factored that in when they decided to close their in house fabs and go with them. Bad publicity + delays like this have to cut into profits. Maybe the cheaper production outweighs this but I'd have for sure looked at this downside and considered that in the long run it would be better to keep things in house.
Posted on Reply
#9
BlackOmega
This is basically a message saying "Hey guys, I know you wanted a competitively priced GPU from us, but because our yields are total suck ass, they're going to be expensive as hell. Sorry."

So we can expect a GPU that may outperform the 79xx series, but a quite the price premium.
Posted on Reply
#10
erocker
by: BlackOmega
This is basically a message saying "Hey guys, I know you wanted a competitively priced GPU from us, but because our yields are total suck ass, they're going to be expensive as hell. Sorry."

So we can expect a GPU that may outperform the 79xx series, but a quite the price premium.
...and they knew it all along. Their previous comments were nothing but to keep people from purchasing from their competition.
Posted on Reply
#11
mastrdrver
How is it that nVidia is the only one affected by the hard drive shortage? AMD never said it's GPU sales were affected by the shortage.
Posted on Reply
#12
BlackOmega
by: erocker
...and they knew it all along. Their previous comments were nothing but to keep people from purchasing from their competition.
Of course they did. But the whole "wait for x to come out" thing works really well.
Posted on Reply
#13
radrok
Looking forward to the finished product, 79xx didn't impress me.
Come on Nvidia, can't wait to get back to good OpenGL support.
Posted on Reply
#14
BlackOmega
by: erocker
...and they knew it all along. Their previous comments were nothing but to keep people from purchasing from their competition.
Actually now that I think about it for more than second, I'm wondering if this is just a fake shortage to falsely inflate their prices.
Posted on Reply
#15
Fluffmeister
by: radrok
Looking forward to the finished product, 79xx didn't impress me.
Come on Nvidia, can't wait to get back to good OpenGL support.
I agree, looking forward to see what Kepler offers.

:D
Posted on Reply
#16
badtaylorx
why make the comment in the first place???

we allready knew that kepler wouldnt be here for a cppl more months??? :confused:
Posted on Reply
#17
eidairaman1
Sounds alot like Fermi. Who thinks Nv needs a corporate realignment?
Posted on Reply
#18
newtekie1
Semi-Retired Folder
by: erocker
...and they knew it all along. Their previous comments were nothing but to keep people from purchasing from their competition.
I'm pretty sure the whole "our mid-range cards will outperform their top end" was kind of a hint that kepler would be expensive as hell. Basically saying the mid-range was going to start at $500...
Posted on Reply
#19
entropy13
by: eidairaman1
Sounds alot like Fermi. Who thinks Nv needs a corporate realignment?
You mean "sounds alot (sic) like the first Fermi."
Posted on Reply
#20
eidairaman1
by: entropy13
You mean "sounds alot (sic) like the first Fermi."
Ya took a revision to fix it. Eh basically a 2900/3870 deal
Posted on Reply
#21
semantics
maybe they need to hire new experts making these projections which always seem wrong.
Posted on Reply
#22
Inceptor
Projections are almost always wrong. Period. Full stop.
Criticizing on the basis of a commentary which was, at best, cryptic, is just as wrong.

So, NV says it's all TSMC's fault. Why? because they have to; they can't ship out a ton of GPUs now, if they say nothing and pretend it's all OK, it'll be a bit like the Bulldozer rollout for them.

"Hey guys, our 28nm yield is pretty bad, so uhh, you're gonna pay for it, and unless you fork over the money IMMEDIATELY to get the few cards we ship, you're gonna wait for it."
*NV guy waves his hand at you as you look at those AMD GPUs and says,*
"Those aren't the cards you're looking for, move along now. Here's a shiny brochure about the awesomness you can have from us.... six months from now."
Posted on Reply
#23
eidairaman1
Your Last Line Makes me laugh hard

by: Inceptor
Projections are almost always wrong. Period. Full stop.
Criticizing on the basis of a commentary which was, at best, cryptic, is just as wrong.

So, NV says it's all TSMC's fault. Why? because they have to; they can't ship out a ton of GPUs now, if they say nothing and pretend it's all OK, it'll be a bit like the Bulldozer rollout for them.

"Hey guys, our 28nm yield is pretty bad, so uhh, you're gonna pay for it, and unless you fork over the money IMMEDIATELY to get the few cards we ship, you're gonna wait for it."
*NV guy waves his hand at you as you look at those AMD GPUs and says,*
"Those aren't the cards you're looking for, move along now. Here's a shiny brochure about the awesomness you can have from us.... six months from now."
Posted on Reply
#24
NAVI_Z
by: Inceptor
Projections are almost always wrong. Period. Full stop.
Criticizing on the basis of a commentary which was, at best, cryptic, is just as wrong.

So, NV says it's all TSMC's fault. Why? because they have to; they can't ship out a ton of GPUs now, if they say nothing and pretend it's all OK, it'll be a bit like the Bulldozer rollout for them.

"Hey guys, our 28nm yield is pretty bad, so uhh, you're gonna pay for it, and unless you fork over the money IMMEDIATELY to get the few cards we ship, you're gonna wait for it."
*NV guy waves his hand at you as you look at those AMD GPUs and says,*
"Those aren't the cards you're looking for, move along now. Here's a shiny brochure about the awesomness you can have from us.... six months from now."
sike !...:roll::roll::roll:
Posted on Reply
#25
omegared26
:)

dont worry nvidia fanboys, Kepler will be out when AMD will have the 8xxx series
Posted on Reply
Add your own comment