Nvidia CEO says a holistic effort beyond graphics chips will make it dominant in PC gaming

Nvidia chief executive Jen-Hsun Huang said that his company’s graphics chips are “further ahead [of the competition] than at any other time in our history.” Nvidia announced its newest graphics chips for PCs last week, with the high-end products aimed at gamers and virtual reality fans at the outset.

“Our PC gaming platform, GeForce, is strong, and it’s getting stronger than ever,” he said. “Our GPU architecture is just superior. We dedicated an enormous amount of effort to advancing our GPU architecture. The engineering of Nvidia is exquisite. Our craftsmanship is unrivaled anywhere.” Nvidia has new chips coming out this summer that it hopes will cement its grip on the high-end PC gaming market.

He said the scale of Nvidia’s efforts in designing GPUs is the biggest in the world, because, “This is the one thing that we do.”

Earlier today, the graphics chip maker reported earnings for its first fiscal quarter ending April 30 beat Wall Street’s expectations. Nvidia’s results are a bellwether for the PC industry, as the company is one of the largest makers of graphics chips. Its results are also indicators of the health of sectors such as PC gaming hardware, graphics-enhanced data center computing, deep learning, and car computing. The PC market isn’t growing like it once did, but Nvidia still did well.

The Santa Clara, California-based company reported non-GAAP earnings of 46 cents a share (up 39 percent from a year ago) on revenue of $1.30 billion, up 13 percent from a year ago.

Above: Tim Sweeney of Epic Games with Jen-Hsun Huang of Nvidia.

Image Credit: Nvidia

Analysts had expected non-GAAP earnings of 31 cents a share on revenue of $1.27 billion. Nvidia has an estimated 81 percent share of the discrete graphics card market, according to Jon Peddie Research. Nvidia’s stock is up 4.8 percent to $37.30 a share in after-hours trading. Nvidia’s outlook for the second fiscal quarter is revenue of $1.35 billion and gross profit margins of 58 percent.

Gaming revenue was $687 million, up from $587 million a year ago, thanks in part to interest in virtual reality headsets. Huang said that Nvidia’s advantage goes beyond chips, as the company has created a hardware-software platform.

“It’s about evolving all of the algorithms that sit on top of our GPUs,” Huang said. “It’s about making sure the experience just works.”

Huang said the company works closely with game developers to make the games work properly. Nvidia creates the GeForce Experience software to enable gamers to do things like record their gaming experiences. AMD does this too. But Huang believes “it’s not just about chips anymore.”

Nvidia grew up as a PC graphics chip company, and it is the last stand-alone maker of such chips, in competition with microprocessor makers Intel and AMD. But Huang has dedicated most of the time in Nvidia’s recent press conferences to Nvidia’s attempts to create supercomputers for cars, which could fuel innovations such as dashboard electronics, infotainment systems, and self-driving cars. He also recently announced its new consumer PC graphics chips based on its Pascal architecture.

The company unveiled the graphics processing units (GPUs) at a live event in Austin, Texas, on Friday night. The Nvidia GeForce GTX 1080 and 1070 GPUs represent the newest generation of graphics for consumer computers, and they come at a time when 3D graphics is being pushed to its limit by virtual reality headsets.

The consumer GPUs come a month after Nvidia unveiled the very first Pascal-based GPU, the P100, which was targeted at deep learning neural networks. Pascal is a new master design, dubbed an architecture, for a whole generation of chips that also come with a new manufacturing process. The process, based on the Taiwan Semiconductor Manufacturing’s 16 nanometer FinFET node technology, represents a new spin of Moore’s Law, or the prediction that the number of transistors on a chip doubles every couple of years. This process will enable chips that are faster, smaller, and cheaper than previous generations.

The previous generation of chips used the 28-nanometer TSMC process that has been available to Nvidia and rival Advanced Micro Devices since 2012. With the new process, Nvidia was able to create the P100 with 15 billion transistors on a single chip. The GTX 1080 and 1070 are slimmed-down versions of the P100. The GPUs have about 3,584 CUDA cores. Gamers will use that hardware to push their games to the limit, Huang said.

“Regarding Pascal, we are expecting a lot,” Huang said. “It’s in full production. Yields are good. Building these semiconductors are very hard, but we are very good at it. We wouldn’t have announced it if we didn’t have manufacturing under control.”