NVIDIA CEO Jensen Huang said he sees no signs that the global chip shortage will end anytime soon. The head of the largest chipmaker by market capitalization made a presentation at the NVIDIA GTC conference, during which he spoke about the company’s achievements in the field of the metaverse and artificial intelligence.
NVIDIA still gets the bulk of its revenue – about 47% in the second quarter – from gaming graphics cards. And they are still in short supply due to the chip shortage caused by the pandemic. “I think next year the demand will significantly exceed the supply. We don’t have the magic of supply chain management … We have the support of our suppliers. We are lucky that we have a lot of suppliers, our supply chain is diverse, and our company is quite large, so we have the support of a large ecosystem around “– said Mr. Huang.
The chip crisis erupted with the outbreak of the pandemic, when automakers, anticipating a slowdown in sales, cut orders for them. But consumers had other plans and soon began to actively buy cars. In parallel, consumers, finding themselves in self-isolation at home, began to buy electronics – from workstations and webcams to gaming PCs and consoles. As a result, several industries began to fight for the attention of a small number of chip manufacturers – this led to a crisis that continues to this day. Buying a video card or game console is now very problematic, especially without the extra charge to the recommended retail price. The demand has grown so much that the goods that get into the open sale are sold out almost instantly.
NVIDIA isn’t the only company struggling with chip shortages. Intel CEO Pat Gelsinger said last month that he did not expect the situation to improve until 2023. As for the head of NVIDIA, he does not consider the level of demand observed today to be a temporary phenomenon, in contrast to the problems with the supply of semiconductor components. According to Mr. Huang, high demand is of a long-term nature: “People are starting to collect more and more home workstations because now their home is their office. And when they are at home, they prefer to have a stable system, which is why PCs are sold incredibly well. “… In addition, people spend more and more time playing games, so the demand for top-end video cards is also very high.