The ongoing chip shortage has caused Nvidia to focus more on procuring semiconductor manufacturing over the longer-term, according to company chief financial officer Colette Kress.
Nvidia’s CFO mentioned the effort during a Q&A at the Credit Suisse 25th Annual Technology Conference on Tuesday.
“Most of our discussions with our suppliers has been what do we see going forward?” she said. “How can we help them and enable them to build the capacity that they will need to support the system going forward.”
The company’s focus on long-term procurement is also highlighted in Nvidia’s purchase commitments for manufacturing capacity, Kress added. Last month, the company reported it had outstanding long-term supply obligations totaling $6.90 billion, up from $2.5 billion a year ago.
Nvidia's SEC filing also provided a breakdown of the spending. About $2.9 billion is marked for the last three months of fiscal 2022, which should be this year's Q4. Another $4.6 billion will be spent in fiscal 2023, which should be next year.
“How long will it take until this bounces out? It’s difficult to say,” Kress said. “We feel good about the beginning of next year and what we’ve computed. But when we think about the second half of next year, I think we’ll be in a great position, given so much of the work that we’ve already done on long-term procurement.”
The statements offer some optimism on when the graphics card shortage might end. A few months ago Nvidia’s CEO Jensen Huang gave a more pessimistic take when he predicted GPU supplies will probably remain constrained through most of 2022.
“A lot of that has to do with the demand being so great,” Huang added. "We’ve only upgraded less than 20% of our total install base. So there’s another 80% of the world’s PC gaming market that we have yet to upgrade to RTX (graphics cards)."
In 2022, Nvidia is expected to release next-generation graphics cards, likely the RTX 4000 series, which will no doubt face massive demand from both consumers and cryptocurrency miners. According to Taiwan’s DigiTimes, Nvidia may end up tapping TSMC to build the upcoming GPUs using the company’s 5-nanometer manufacturing process.