Yahoo Finance Who Are NVIDIA’s Toughest GPU Competitors?
A Peek at NVIDIA's 4Q16: Catalysts, Competitors, Costly Battles
Return of AMD in GPU space
In the earlier part of the series, we saw that NVIDIA (NVDA) reported strong results in fiscal 3Q16 despite a weak PC (personal computer) market. It took away GPU (graphic processing unit) market share from Advanced Micro Devices (AMD). However, AMD, in its recently released fiscal 4Q15 earnings, stated that it will launch new products that compete with NVIDIA and win back its lost market share. Let’s see what that means for NVIDIA.
AMD versus NVIDIA
As you can see in the above graph, AMD started to lose market share in calendar 3Q14. That’s when NVIDIA gained market share. Due to reduced competition, NVIDIA managed to boost revenues. However, in fiscal 3Q15, AMD gained some lost market share in the AIB (add-in-board) segment, while NVIDIA lost. According to Jon Peddie Research, AMD’s market share grew from 18% in 2Q15 to 18.8% in 3Q15. NVIDIA’s share fell from 81.9% to 81.1% during the same period.
Both companies are launching new products.
In January 2016, both companies launched hot fixes for their graphics drivers: NVIDIA’s 361.82 update and AMD’s Radeon Software Crimson Edition 16.1.1.
Both companies are developing new architectures with HBM (high bandwidth memory) 2.0. NVIDIA is developing Pascal, and AMD is developing Polaris.
Both plan to shift GPU production to 14/16-nm (nanometer) node process. They’ve partnered with Samsung (SSNLF) and Global Foundries to do that.
AMD also launched the industry’s first hardware-virtualized GPU FirePro S-Series. If this trend continues, NVIDIA is likely to see slower revenue growth if PC markets don’t revive.
Intel enters gaming GPU
Another major concern for NVIDIA is the entry of Intel (INTC) into the gaming GPU space. At the 2016 CES (Consumer Electronics Show), Intel stated that it’s developing a gaming NUC (Next Unit of Computing) that will compete with AMD’s and NVIDIA’s GPUs. The NUC will be powered with a quad-core sixth-generation Skylake Core i7 and Iris Pro 580 iGPU (integrated graphics processing unit).
To overcome these challenges, NVIDIA is diversifying into other areas such as automotive and data center. It’s also looking to cash in on its rich portfolio of GPU patents by licensing them to others for a fee. In the next part of the series, we’ll look at the lawsuits currently in process and how they will benefit the company.
You can gain exposure to semiconductor stocks through the Power Shares QQQ ETF (QQQ). It has 3.0% exposure in Intel and 0.31% in NVIDIA.
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