PORTLAND, Ore. -- The problematic yields for Nvidia Corp.'s high-end graphics chips are expected to be resolved by the end of this month, with no supply constraints in the channels, according to a new report from Pacific Crest Securities Inc. today (Aug. 5).
Last week, Nvidia announced it would meet its sales forecast for the quarter, but the company lowered its gross-margin expectations. The Santa Clara, Calif.-based chip maker blamed the issues on higher-than-expected product costs for its 0.13-micron foundry technology. More specifically, it blamed its main foundry--Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC)
At the time, Michael McConnell, an analyst with Pacific Crest of Portland, lowered his estimates for Nvidia, due to lackluster sales with its nForce 2 chip-set line and manufacturing problems with its GeForce FX 5600 and FX 5900 line of graphics devices ( see July 29 story ).
In a report issued today, McConnell believes that Nvidia can meet his revised forecast and is more upbeat about the chip maker this week. This follows a better-than-expected outlook on its chip yields.
"Nvidia has informed its add-in board partners that yield problems on the NV35 and NV31 will be remedied by the end of August," McConnell wrote in a report issued today.
The problems with the NV31 and NV35 do not reside at TSMC. McConnell today told Silicon Strategies that the yield issues were "Nvidia-specific."
In another boost, Nvidia also recently announced a big OEM deal with a Taiwanese motherboard giant Gigabyte Technology Inc.--a move that impacts graphics chip rival ATI Technologies Inc., according to the analyst.
Gigabyte had primarily buying its graphics chips from ATI. Now, Gigabyte will be launching six models of its flagship GA-7NNXP series motherboard, all based on Nvidia's nForce2 Ultra 400 platform processors.
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