Nvidia Corp forecast a larger-than-expected jump in quarterly revenue and its chief executive said the chipmaker’s mobile business was accelerating, sending its shares skyrocketing.
Although once known for graphics cards, Nvidia has since expanded into mobile devices such as tablets. The company said its phone business ramped up toward the second half of the second quarter and that more devices carrying its Tegra chips are going into production.
Nvidia, whose name is well-known to a community of gamers, graphic designers and other high-end users, this year made a splash at the Consumer Electronics Show in Las Vegas, where it unveiled a series of “design wins” — electronics manufacturers agreeing to use its mobile chips in phones and tablets.
On Wednesday, Nvidia said Samsung Electronics will use the Tegra in the new Galaxy R smartphone, the first time Asia’s biggest electronics firm has used that chip in one of its phones.
“In terms of if the [mobile] business is on track, the business is doing better than ‘on track’ in the sense that our design win momentum is better than ever,” Nvidia chief executive Huang Jen-hsun (黃仁勳) told analysts on a conference call.
However, while other business segments will grow, revenue from Tegra will hold steady this quarter from last, added Huang, a Taiwanese native who co-founded Nvidia in the 1990s and is known in Silicon Valley for his love of Ferraris and other fast cars.
The company’s quarterly guidance implies revenue of between US$1.06 billion and US$1.08 billion, compared with analysts’ average forecast of US$1.05 billion.
Anxious to move beyond personal computers, which are suffering from lackluster sales, Nvidia jumped into mobile devices this year, with its chips appearing in tablets and phones made by Samsung, Motorola Mobility and LG Electronics.
However, while several tablets have been launched, none have become a real challenge to Apple Inc’s iPad and sales have been lower than expected.
New processors launched by Intel Corp this year have led PC manufacturers to build an increased number of high-end laptops using discrete graphics chips provided by Nvidia, but a trend toward including graphics horsepower on central processors is seen as cannibalizing demand for low-end graphics chips that Nvidia also sells.
A few weeks ago, Intel trimmed its forecast for personal computer unit sales this year, warning of softness in mature markets, but pointing to healthy expansion in China.
Nvidia’s revenue of US$1.02 billion in the quarter ending July 31 was slightly above the US$1.01 billion average estimate of analysts polled by Thomson Reuters I/B/E/S.
The company reported non-GAAP (Generally Agreed Accounting Principles) earnings of US$193.5 million, or US0.32 a share, up from US$47.6 million, or US0.08 a share, one year ago.