Nvidia graphics card shipments for 2022 could drop dramatically, at least if a new forecast is correct.
This comes from a DigiTimes (opens in new tab) report which states that, following the forecasts of Taiwanese graphics card vendors, Nvidia’s shipments for this year are expected to drop by something like 40% to 50%.
DigiTimes points out that this means that the amount of money raised by Team Green will also drop substantially, or indeed, as the report says, revenue is expected to decline at a “pace beyond imagination” – which sounds pretty serious.
This is all due to the cryptographic crash and a general post-pandemic weakening in demand for desktop GPUs.
Analysis: More fuel in GPU price cut?
That forecast for Nvidia aligns with the company’s recent fiscal results, which showed a sharp drop in revenue, and gaming graphics cards were hit hard, with sales dropping 33% year-over-year. So the remainder of 2022 with 40% drops in shipments, or perhaps more, is not an unbelievable scenario; although we must, of course, be very cautious when it comes to predictions like this one from DigiTimes. Of course, this is just an educated guess as to what’s to come for Nvidia, and things could be different.
That said, looking at the current economic climate – which is seriously shaky on a number of fronts – it’s not hard to imagine that the rest of 2022 will be a sticky wicket for Team Green. As inflation and cost-of-living increases hit the home and cause consumers suffering, there will clearly be less money to spend on more frivolous things like upgrading graphics cards.
As you may have seen, Nvidia and its partners are already cutting prices to combat what Team Green described as a ‘significant’ decline in sales projections for the fiscal second quarter and, as we argued before, we anticipate further price cuts. to come on current generation Ampere GPUs.
There’s supposedly still a bit of excess RTX 3000 stock left to clean up before the next-gen Lovelace graphics cards come out (and these new GPUs take a lot of the remaining momentum from current-gen sales). And this forecast of potential additional weakness for Nvidia in the remainder of 2022 – if the company does indeed experience revenue decline at an ‘unimaginable’ pace – may reinforce the need to drive more RTX 3000 sales through further discounts.
After all, it’s crucial that Nvidia’s graphics card maker partners can get rid of excess Ampere stock before the RTX 4000 GPUs can be fully released (and if that stock release doesn’t happen in a timely manner, we might even see all but the RTX 4090 delayed until 2023, as the rumor has already suggested).
Nvidia isn’t the only company to be affected by the current economic woes, of course. The DigiTimes report also states that AMD and Intel now have a bleaker outlook for shipment and revenue projections for this year. Intel expects a revenue drop of between $8 and $11 billion and a 10% drop in PC sales from 2021.
AMD expects shipments to drop by around 15%, but its revenue for the third quarter is still expected to rise slightly, putting it in a better position than Intel – after it took away Team Blue’s market share in high-end CPUs. server and embedded processors during the second quarter, during which the Red team’s revenue grew massively (70%, no less).
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