NVIDIA: Two Thirds Of All GPUs Are RTX, Not Impacted By Intel Supply Issues
This is part two of our coverage of NVIDIA's presentation at the Credit Suisse Annual Technology Conference 2019. NVIDIA's CFO Colette Kress discussed quite a few topics with analysts present there and some of it makes up for material information about the company. The company also revealed for the first time just how much of its sales were coming from RTX-based graphics cards and the answer would be surprising to some.
NVIDIA: Two-thirds of all GPUs sold are RTX-based
There had been a lot of questions about the traction NVIDIA's Turing-based RTX series had been getting considering the higher ASP and it looks like the company has finally answered the question: pretty good. Colette was asked a question about RTX-based graphics card and this is the response she had for the analyst:
Overall of boards that we sell in desktop, two-thirds of it are now with ray tracing. So we are really pleased with the market adoption of it and of course, there is absolutely more room to grow. We have cards that fit every single type of price points as well as every single type of overall gamer. So you can overall buy a card in the $100 and as well as all the way up to $1000 to participate in ray tracing.
The way we see it, in the future ray tracing will be the underpinnings of gaming and PC gaming. So I think we're just in the initial stages and the amount of ray tracing that we'll see in the future, not only for PC gaming consoles and others, will continue to fuel the overall gaming market. - Colette Kress, NVIDIA CFO
This should put to rest any speculation about the RTX series not performing well financially and not getting enough traction. If two-thirds of all boards shipped are RTX based then this is a huge win for raytracing.
NVIDIA: Selling expensive graphics cards is not a priority
The next question then becomes, is NVIDIA focusing only on the high-end customer segment? RTX graphics cards are very expensive and not everyone can afford them right now. If RTX is going to be the bread and butter of NVIDIA then the ASP needs to come down and this is exactly the question that an analyst asked Colette. Her response to this was:
ASPs are important, but remember, we also keep a portfolio of a card for any type of gamer. It doesn't - this isn't an industry that we want only the high-end. We want to be able to bring anyone who is interested in gaming into this market. What we have seen is, the gamers are starting in their teens and are staying well past the age of 40.
What that means is, there's different types of discretionary income across our portfolio that they may choose to get the best of the best, and choosing NVIDIA. We've continued to hold that high-end part of the market, which is so important because those are the ones that are helping us design what we believe is the future of gaming as well. - Colette Kress, NVIDIA CFO
This isn't really a surprising or all that enlightening response considering NVIDIA is naturally going to focus on all price points - not just with the same attention. But it is reassuring to know that NVIDIA does not consider the high-end GPU segment a priority.
NVIDIA: We aren't impacted by Intel supply issues
Another interesting question that an analyst asked was whether NVIDIA has any correlation with the supply issues plaguing Intel considering historically Intel CPUs are the one getting packaged with NVIDIA GPUs:
In the case of the overall CPU shortages we are probably going on about a year of talks of CPU shortage pieces. As I'll remind, in terms of where we are in both the desktop and or notebook, we tend to be in more high-end types of systems. We find that our OEMS are generally targeting more of that high-end as well. So we haven't seen any real impact this last quarter from overall CPU shortages. Going into Q4, we've taken into account what we know and is incorporated in our guidance as well. - Colette Kress, NVIDIA CFO
Here's the thing however, anyone that has been following the tech industry closely would not find this answer surprising. Ryzen CPUs are now getting a very high attach rate with NVIDIA GPUs and any shortfall on the Intel side will be quickly made up from the AMD end. It is still good to know (for NVIDIA investors) however that the company is not impacted by the Intel supply issue all that much.
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