SAN FRANCISCO — Automotive and mobile gaming were growth areas for graphics processor company Nvidia (Santa Clara, Calif.) in 2014. With revenue in fiscal 2015 reaching $4.68 billion, up 13% from last year, in its quarterly earnings call yesterday. Beating its own 4th quarter estimates, graphics processor company reported a 9% year-over-year increase in Q4 revenue, hitting $1.25 billion.
Gaming platforms grew more than 30%, automotive grew 80% year over year. "Momentum is accelerating in each of our market-specialized platforms, driving record revenue in the quarter and full year," said Jen-Hsun Huang, president and chief executive officer of Nvidia. Gaming, enterprise graphics, cloud (specifically mobile cloud for gaming), and automotive are Nvidia’s target markets.
Nvidia launched its 256-core Tegra X1 mobile processor alongside automotive computers called Drive at CES in January for digital cockpit and situational awareness. “Drive is basically a mobile super chip, a mobile super computer, with a ton of software on top,” said Huang in the earnings call.
Nvidia is banking that a digital cockpit with advanced graphics and surround vision combined with deep learning will lead to the self-driving car. “Those technologies, we believe, will help pave the path to the self driving car,” said Huang. Nvidia’s role in automotive is mostly confined to infotainment today but “more people are starting to do what Audi had done with their really amazing virtual cockpit, where infotainment and digital clusters merged into one.” Said Huang. “With Tegra, with our automotive platform, we're able to easily merge the two.”
Nvidia's strategy with Tegra "is to focus on automotive and gaming,” said Huang on the call. And Nvidia's “DRIVE auto-computing platform is at the center of the advance toward self-driving cars."
Nvidia's automotive cockpit platform introduced at CES 2015. (Source: Nvidia)
China is especially important to Nvidia’s gaming business. Its 192-core gaming console GeForce GTX 960 GPU, introduced last year made a big hit in China. “GeForce is the largest game platform in China,” said Huang, a market he said that historically hasn't had access to game consoles.
Software is key to Nvidia's game plan. One analyst implied the company has transformed from a component supplier to more of a platform-based business. 10 years ago, Nvidia was 100% PC OEMs, responded Huang. “Now we're substantially less than 20%. And so the company has been -- has been transitioning to this new model with our own platforms, largely software, and they serve 4 vertical markets." Huang added that “value-added, highly differentiated platforms are really growing nicely, and it's more than making up for the decline of our PC OEM business, which, as a result, our margins also increase.”