Nvidia Reaps PC Gaming And Car Benefits

Nvidia’s growing presence in the automotive industry, as well as its long-established gaming credentials, helped the company post a surprise increase in second quarter sales.

And the chipmaker further pleased investors by delivering a better-than-expected forecast for the current financial quarter.

Cars And Gaming

Nvidia of course has made its name making graphics processing units (GPUs), as well as system on a chip units (SOCs) for the mobile computing market.

However, of late it has also turned its focus to the automotive sector. In May this year it signed up the likes of Bentley, Rolls-Royce and Aston Martin, along with the famously tech-friendly Tesla, for its smart car development kits.

Those big-chip signings followed Nvidia’s unveiling of its specially-designed in-car computing system, Nvidia Drive, which looks to make driving smarter and safer through technology, powered by the company’s Tegra X1 processor.

The company found that the deep learning artificial intelligence technology needed for the cars to analyse the world around them runs much better on graphics processors, rather than ‘traditional’ computer chips.

Nvidia has also introduced a range of new platforms and initiatives targeting the smart car market, including DRIVE PX, an auto-pilot computing platform that processes video from up to 12 onboard cameras to provide a seamless 360-degree ‘Surround-Vision’ view around the car, as well as an Auto-Valet self-parking tool.

Nvidia said that it is now working with more than 50 companies that are using DRIVE PX in their autonomous driving efforts. And it seems that 8 million cars on the road are currently using Nvidia chips, which has lead to a 76 percent quarterly rise in automotive revenue.

By The Numbers

All of this means that Nvidia’s play in the automotive sector is reaping rewards for the company. For the second quarter ending 26 July, it posted an overall net profit of $26m (£16.8m), down from $128m (£83m) in the same year-ago quarter.

Sales however rose 5 percent to $1.2bn (£746m) from $1.1bn (£713m) last year. Analysts had been expecting a 8 percent revenue decline.

And despite concern that Nvidia’s financial well being is tied in the fluctuating PC market, its gaming revenue rose 59 percent, helped by strong sales of its popular GeForce series of gaming chips.

“Our strong performance in a challenging environment reflects NVIDIA’s success in creating specialized visual computing platforms targeted at important growth markets,” said Jen-Hsun Huang, president and chief executive officer of NVIDIA.

“Our gaming platforms continue to be fueled by growth in multiple vectors – new technologies like 4K and VR, blockbuster games with amazing production values, and increasing worldwide fan engagement in e-sports,” said Huang. “And our GPU-accelerated data centre platform continues to make great strides in some of today’s most important computing initiatives – cloud-based virtualisation and high performance computing applications like deep learning.

“Visual computing continues to grow in importance, making our growth opportunities more exciting than ever,” he said.

Looking forward the company pleased Wall Street after it said that it expects to post third quarter revenues of approximately $1.18bn (£763m). Shares in the company rose nearly 10 percent on Thursday.

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Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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