With the global chip shortage causing heavy unbalance with supply and demand, NVIDIA is planning to invest $6.9 billion up to 2023 in hopes of addressing this concern. With this, NVIDIA is planning to increase its efforts in semiconductor manufacturing.
NVIDIA to Focus on Procurement of Semiconductor Manufacturing
According to the story by PCMag, the ongoing chip shortage has resulted in NVIDIA deciding to focus more on the procurement of longer-term semiconductor manufacturing, as per Colette Kress, the company's chief financial officer.
In a recent Q&A at the Credit Suisse 25th Annual Technology Conference, NVIDIA's CFO mentioned the company's effort. Kress said that most of the company's discussions with their suppliers have been looking towards what they want to see going forward.
Purchase Commitment for Manufacturing Capacity
Kress tackled the question of how they can help and enable them to be able to build the capacity needed to support the system moving forward. The company's main long-term procurement focus is also highlighted by the purchase commitment of NVIDIA for manufacturing capacity.
In November, the company said that it had outstanding long-term supply obligations that go up to $6.9 billion. To put it into scale, the company only had outstanding long-term supply obligations totalling $2.5 billion in 2020.
$6.9 Billion Total Budget Until 2023
NVIDIA's SEC filing also showed a breakdown of their spending. Around $2.9 billion was marked for the last three months of 2022, which is around the 4th quarter of next year. To add, another $4.6 billion will be spent in 2023. Aside from just NVIDIA, Sony and TSMC are also gearing up to combat the global chip shortage, as previously noted in an article by TechTimes.
Kress said that it's difficult to say how long it will take in order for the business to bounce out. They feel great about the beginning of 2022 and what they have computed. When they think about the second half of 2022, Kress said that the company would be in a great position given a lot of the work they've already done during long-term procurement.
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Global Semiconductor Shortage
The statements offer some optimism on when the GPU shortage could end. Just a few months ago, Jensen Huang, the CEO of NVIDIA, gave a more pessimistic take when he was able to predict GPU supplies which will probably remain constrained through the majority of 2022.
Huang said that a lot of this has to do with the massive demand for GPUs. The CEO said that they have only upgraded less than 20% of the company's total install base. This means that there is still 80% of the world's PC gaming market still has to upgrade to the RTX.
In 2022, NVIDIA is being expected to roll out another line of next-gen GPUs, which are most likely the RTX 4000 series. These next-gen GPUs, as per PCMag, will no doubt face large demand from both regular consumers and the rising crypto miners.
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This article is owned by Tech Times
Written by Urian B.
