This week we continue our series on learning about the semiconductor industry by reviewing some of the terms used in NVIDIA's 1st quarter earnings call transcript. The transcript is provided by Seeking Alpha.
Disclaimer: The videos below do not belong to us. The creators are mentioned in each video.
Ethernet: A cable that connects computers so data can be transferred between them.
Path Tracing: A technology used in video games that simulates the movement of light in a scene so realistic looking images can be created.
Reflex Ultra Low Latency Rendering: NVIDIA’s technology that reduces the lag time between when an input device such as a mouse or keyboard is pressed, and when the action is reflected on the PC screen.
Data Science: The studying of data to extract meaningful insights.
Graphics Driver: The software that allows a computer's operating system to communicate with the computer's graphics hardware.
NeMo’s LLM Framework: NVIDIA's toolkit that can be used to collect large quantities of data to build and train generative artificial intelligence (AI) models.
Workstation: A computer designed to meet the needs of working industry professionals.
Smart Factories: A factory that collects and shares data with people and machines so the manufacturing process can run efficiently and adjust to changes in the factory's environment.
NVIDIA's gross margins of 64.6% is almost double Intel's margins of 34.2%. According to Intel's 2022 4th quarter conference call, their long-term goal is to reach gross margins of 54 - 58%. AMD's gross margins was 44% last quarter.
Since NVIDIA does not manufacture their own chips, their capital expenditures (CapEx) are significantly less than Intel's. NVIDIA's CapEx in the quarter was $248M and they expect to increase their CapEx to $300 - $350M. Their CapEx is ~3% of their revenues.
Intel's CapEx of $7.4B in the last quarter was ~63% of their revenues, and they are trying to get their CapEx to 20-30% of revenues.
AMD's CapEx of $158M in the last quarter was 3% of their revenues.
CONCLUSION
I skipped the terms "end to end data center" and "in-network computing" because I could not understand the explanations that I found. I need to do some more research on these terms.
Next week we will review the question and answer portion of NVIDIA's transcript.
Stay strong, stay blessed, and God willing, I will see you next week.
“Be anxious for nothing, but in everything by prayer and supplication, with thanksgiving, let your requests be made known to God; and the peace of God, which surpasses all understanding, will guard your hearts and minds through Christ Jesus.”
Philippians 4:6-7 NKJV
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