Nvidia is gearing up for a prosperous second half of 2023, thanks to a spike in demand for its artificial intelligence processors, industry sources believe.
China, which is constrained by the US' exports ban, has pushed up the price and volume of Nvidia's AI GPU series, and Chinese companies are stockpiling regardless of cost, according to the sources.
Despite a decline in gaming graphics card revenue, Nvidia was already able to report an exceptional fiscal first quarter. Strong sales of its data center products, particularly the A100 series, were the primary factor, the sources said.
In its fiscal second quarter ending in July, Nvidia is expected to exceed its revenue guidance as shipments of its H100 AI GPU series, which can cost up to nearly US$40,000 in China, enter their peak season, the sources indicated. The primary delivery season for Nvidia's DGX H100 systems, which have an official starting price of US$200,000, has also begun.
Nvidia's A800 chip, the China-specific variant of its A100 AI GPU series, has also been purchased and stocked in significant quantities by Chinese customers, the sources noted.
Demand for Nvidia's AI GPUs is not only crucial to preventing further revenue declines at TSMC, but also a growth catalyst for server industry supply chain companies like Asustek Computer, Gigabyte Technology, Hon Hai Technology Group (Foxconn), Quanta Computer, Supermicro, and Wistron in the second half of 2023, the sources said.
In May, Nvidia projected fiscal second-quarter revenue of approximately US$11 billion, representing an increase of more than 50% sequentially, with gross margin increasing by 4-percentage points to 68.6%.
Article translated by Jessie Shen
