“We are downgrading Nvidia to a “hold†and removing our 12-month price target (was $22) after a series of channel checks indicating that Fermi is not ramping well and there could be further product delays. Based on our findings, Nvidia has very limited supply of Fermi desktop/notebook parts and yields remain poor at around 20-30%,†analyst Rajvindra Gill wrote in a note to clients.
In a bid to improve yields of the code-named GF100 chip (NV60, GT300, G300), Nvidia disabled 32 out of 512 stream processors even on flagship GeForce GTX 480 graphics board, however, after the product was formally launched on the 12th of April, it is still rarely available and where it is in stock, it costs much more than its recommended price of $499.
Considering the fact that Nvidia GF100 chip – which powers both GeForce GTX 470 and GTX 480 graphics boards and will eventually power the Tesla C2000-series computing cards – consists of 3.1 billion of transistors and is made using TSMC’s 40nm process technology known for its insufficient yields, it is not a surprise that Nvidia cannot ship enough modern DirectX 11-supporting graphics processing units (GPUs) to compete successfully with its arch-rival ATI, graphics business unit of Advanced Micro Devices. Since Nvidia’s top-of-the-range GeForce GTX 480 has not managed to recapture performance leadership from ATI Radeon HD 5970 and is also not widely available, the halo effect of the advanced product launch will not be significant
The analyst from Needman believes that the potential delays of other chips from the Fermi family will inevitably mean additional design wins for ATI, which will lead to further market share loss by Nvidia. Recently ATI already announced that it had shipped over six milion DirectX 11 graphics processors since late September, meanwhile, according to Rajvindra Gill, Nvidia has supplied less than ten thousand of its GF100 chips.
“We believe Nvidia could lose market share starting in [the second half of 2010], face a more challenging pricing environment and/or experience potentially lower gross margins,†said the analyst.
Nvidia declined to comment on the information.
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