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Nvidia's Nintendo Switch SoC revenue at its lowest point ever, Switch SoC revenue to increase significantly next quarter

ggx2ac

ggx2ac

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Oct 25, 2017
3,504
Nvidia has recently posted their first quarter earnings for FY1/2020.

To summarise how Nintendo Switch SoC revenue is doing, the following table shows revenue made from Tegra. It is split into money made from Automotive and Non-automotive (i.e. including Switch SoCs):

Screenshot_20190517-1217002.png


As you can see, non-automotive revenue is at their lowest point ever which means Switch SoC shipments are expected to be at their lowest.

However, a Nikkei article has given some new information on the next quarter:
https://r.nikkei.com/article/DGXMZO44915180X10C19A5000000

Credit to Fukuzatsu for translating to me the following:
5～7月期の売上高は前年同期を16～20%下回る25億～26億ドルを見込んでいる。データセンター向けは停滞が続くが、2～4月期と比べ任天堂のゲーム機「スイッチ」向けに納めている部品の販売量が増える見込みだ。
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To summarise, Nvidia expects to be down overall in the 2nd Quarter YoY in revenue by 16-20% due to stagnation of Data Center sales. However, gaming oriented hardware (i.e Switch hardware) is expected to increase.

Update:

Some quotes from the earnings call transcript:
https://seekingalpha.com/article/42...uang-q1-2020-results-earnings-call-transcript

Timothy Arcuri

Okay. Thanks. And then, just as a follow-up, can you give us some even qualitative if not quantitative sense of the $320 million incremental revenue for July. How that breaks out is the thinking sort of that data center is going to be flat to maybe up a little bit and pretty much the remainder of the growth comes from gaming. Thanks.

Colette Kress

Yes. So, when you think about our growth between Q1 and Q2, yes, we do expect in terms of our gaming to increase. We do expect our Nintendo switch to start again in sizable amount. Once we move into Q2 and we do at this time expect probably our data center business to grow.

_____

Toshiya Hari

Thank you. As a quick follow-up on the gaming side, Colette, can you characterize product mix within gaming. You saw in the current quarter, you cited mix as one of the key reasons why gross margins were down year-over-year albeit off a high base going into Q2 in the back half. Would you expect SKU mix within gaming to improve or stay the same? I ask because it's important for gross margins obviously. Thank you.

Colette Kress

Yes. When you look at our sequential gross margin increase that will be influenced by our larger revenue or larger revenue and better mix, which you're correct is our largest driver of our gross margin. However, we will be beginning the Nintendo switch back up and that does have lower gross margins than the company average influencing therefore our Q2 gross margin guidance that we provided.

As we look forward towards the rest of the year, we think mix and the higher revenue again will influence and likely rise our overall gross margins for the full year.

____

Jen-Hsun Huang

And our notebook growth is going to be really great because of the Max-Q design that we invented and the last couple of quarters have also intersected with overlapped with the seasonal slowdown that -- not so, but build that the seasonal builds of the Nintendo switch and we're going to go back to normal build cycle.
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Last edited:
ILikeFeet

ILikeFeet

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Oct 25, 2017
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I'm guessing nintendo pays on delivery or some shit. but whatever, all this smoke is blinding
 
OP
OP
ggx2ac

ggx2ac

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Member
Oct 25, 2017
3,504
Some quotes from the earnings call transcript:
https://seekingalpha.com/article/42...uang-q1-2020-results-earnings-call-transcript

Timothy Arcuri

Okay. Thanks. And then, just as a follow-up, can you give us some even qualitative if not quantitative sense of the $320 million incremental revenue for July. How that breaks out is the thinking sort of that data center is going to be flat to maybe up a little bit and pretty much the remainder of the growth comes from gaming. Thanks.

Colette Kress

Yes. So, when you think about our growth between Q1 and Q2, yes, we do expect in terms of our gaming to increase. We do expect our Nintendo switch to start again in sizable amount. Once we move into Q2 and we do at this time expect probably our data center business to grow.

_____

Toshiya Hari

Thank you. As a quick follow-up on the gaming side, Colette, can you characterize product mix within gaming. You saw in the current quarter, you cited mix as one of the key reasons why gross margins were down year-over-year albeit off a high base going into Q2 in the back half. Would you expect SKU mix within gaming to improve or stay the same? I ask because it's important for gross margins obviously. Thank you.

Colette Kress

Yes. When you look at our sequential gross margin increase that will be influenced by our larger revenue or larger revenue and better mix, which you're correct is our largest driver of our gross margin. However, we will be beginning the Nintendo switch back up and that does have lower gross margins than the company average influencing therefore our Q2 gross margin guidance that we provided.

As we look forward towards the rest of the year, we think mix and the higher revenue again will influence and likely rise our overall gross margins for the full year.

____

Jen-Hsun Huang

And our notebook growth is going to be really great because of the Max-Q design that we invented and the last couple of quarters have also intersected with overlapped with the seasonal slowdown that -- not so, but build that the seasonal builds of the Nintendo switch and we're going to go back to normal build cycle.
Click to expand...
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Onix555

Onix555

Member
Apr 23, 2019
3,381
UK
Well automotive appears to be increasing at a steady rate, i'm sure that in a few years it will be a $1 billion+ industry. As a shareholder this pleases me. However, I am still quite upset that Nvidia invests into these childish game toys, they are tempremental financially and I cannot understand their appeal to society.



/s
 
test_account

test_account

Member
Oct 25, 2017
4,645
Do we know how long production time these systems usually have? For example, Switch was released in early March 2017. When was the first retail Switch system produced?
 
1-D_FE

1-D_FE

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Oct 27, 2017
8,269
We kind of had rumors that there are new remotes coming for Shield TV. Here's hoping there's a revision of Shield TV coming, too. Those numbers are really low, so here's hoping they're just clearing stock before it's annnounced.
 
Jbone115

Jbone115

Member
Oct 25, 2017
2,744
People acting like Nintendo is delaying the launch of a revision that was never announced or even hinted at (officially) is pretty funny.

A revision is pretty much inevitable, but nobody really knows when it'll be revealed/released.
 
Thraktor

Thraktor

Member
Oct 25, 2017
570
This lines up with TSMC's 20nm revenue dropping by 75% over the course of 2018. TX1 was the last high-volume 20nm chip in production, and it looks like they stopped (or at least massively reduced) production late last year. They'll presumably be in full-scale manufacturing on the 12nm replacement now, with shipments to Nintendo (and therefore revenue) starting this quarter.

1-D_FE said:
We kind of had rumors that there are new remotes coming for Shield TV. Here's hoping there's a revision of Shield TV coming, too. Those numbers are really low, so here's hoping they're just clearing stock before it's annnounced.
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There's actually good evidence for this in Nvidia's Linux/Android source code, specifically a device codenamed Sif with the same T214/Mariko chip referred to in Switch firmware.
 
1-D_FE

1-D_FE

Member
Oct 27, 2017
8,269
Thraktor said:
This lines up with TSMC's 20nm revenue dropping by 75% over the course of 2018. TX1 was the last high-volume 20nm chip in production, and it looks like they stopped (or at least massively reduced) production late last year. They'll presumably be in full-scale manufacturing on the 12nm replacement now, with shipments to Nintendo (and therefore revenue) starting this quarter.



There's actually good evidence for this in Nvidia's Linux/Android source code, specifically a device codenamed Sif with the same T214/Mariko chip referred to in Switch firmware.
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Nice.
 
plusaflag

plusaflag

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Thraktor said:
This lines up with TSMC's 20nm revenue dropping by 75% over the course of 2018. TX1 was the last high-volume 20nm chip in production, and it looks like they stopped (or at least massively reduced) production late last year. They'll presumably be in full-scale manufacturing on the 12nm replacement now, with shipments to Nintendo (and therefore revenue) starting this quarter.



There's actually good evidence for this in Nvidia's Linux/Android source code, specifically a device codenamed Sif with the same T214/Mariko chip referred to in Switch firmware.
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Thanks, so the stars are indeed aligning!
I hope we get the 8GB of RAM leaked in the 5.0 firmware. A few bells and whistles left and right would be nice too.
 
MercuryLS

MercuryLS

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Oct 27, 2017
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Thraktor said:
This lines up with TSMC's 20nm revenue dropping by 75% over the course of 2018. TX1 was the last high-volume 20nm chip in production, and it looks like they stopped (or at least massively reduced) production late last year. They'll presumably be in full-scale manufacturing on the 12nm replacement now, with shipments to Nintendo (and therefore revenue) starting this quarter.



There's actually good evidence for this in Nvidia's Linux/Android source code, specifically a device codenamed Sif with the same T214/Mariko chip referred to in Switch firmware.
Click to expand...
Click to shrink...

What kind of battery life improvement are we talking about if they kept the battery the same size?
 

Deleted member 31092

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I guess the theory of cheaper SKU + new "standard" SKU (aka the Pro) replacing the current model is gonna be the true one.

We all saw it coming really.
 
Dekuman

Dekuman

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Oct 27, 2017
19,026
Thanks for the spreadsheet
Q4 2018 was 64 million and Q1 2029 was 32 both very low compared to the prior quarters and we know Nintedno Switch sales are up yoy including a massive holiday.

It's clear they are using up all the remaining old chip inventories.
Bowl0l said:
It's the opposite. Nvidia could just leave Nintendo and watch a Direct explaining how a Switch successor ends up worse than a 2015 chip.
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There is most likely a clause in the contract for such things. This isn't high school it's business
 
metalslimer

metalslimer

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Oct 25, 2017
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Well if they haven't even started manufacturing then it will be at least Sept- October before we see it.
 
Hailinel

Hailinel

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Bowl0l said:
Doubt Nvidia will sign anything with huge penalties. Nintendo is the vulnerable party, not Nvidia when they started their partnership.
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Nvidia's chip security flaw isn't Nintendo's fault and not solely Nintendo's problem. Any company that bought the same chip now has to deal with the security flaw. In no way is Nvidia blameless given that they made and sold this chip, likely with the promise that it was more secure than it actually is.
 

Deleted member 25712

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Bowl0l said:
Doubt Nvidia will sign anything with huge penalties. Nintendo is the vulnerable party, not Nvidia when they started their partnership.
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Past performance not indicative of future yadda yadda yadda...one thing I've learned in 20 years of "Nintendo's in trouble" or "Nintendo's vulnerable" is that Nintendo is never in trouble.
 
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