Nvidia pins hopes on workstation market

Graphics firm Nvidia made a loss of $201.3 million for its first quarter. In the same quarter last year it made a profit of $176.8 million.

The loss is not as bad as it seems because Nvidia took a $140.2 million charge, but nevertheless revenues dropped by 42 percent to $664.2 million, while its gross margin fell to 28.6 percent from 44.6 percent the previous year.

CEO Jen-Hsun Huang said in a conference call that Nvidia had cut expenses and made a significant dent in its inventory. He said that the workstation element of its business – often unsung by its marketing people – would help raise gross margins.

Nvidia markets itself as a really cool company and does that so well that people can forget it is a fabless chip company, and its high end and bread end products subsidize its high profile gaming and consumer electronics stuff.

He confirmed what other chip companies such as AMD have been saying – enterprises are not dipping into their pockets while the economic meltdown continues to give the world the jitters.

While Nvidia’s chipset business is by far the least lucrative element of its business mix, it grew by 98 percent compared to the same period last year, indicating it’s edging out its competition, such as it is.

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