Nvidia: Darkest time-before dawn
Despite the excellent financial results for the fourth quarter of 2020, Nvidia shares have fallen by more than 16% since the report was published. This happened against the background of increased concerns about the global shortage of chips. In a recent interview, the CFO said that supply difficulties are likely to continue in April, but the situation should improve in May. According to preliminary data, Nvidia will not be able to process about 30% of orders for CQ1 and CQ2. However, this does not mean that the company will lose money: orders were not canceled – just shifted the deadline for their implementation.
Automakers were the first to feel the shortage of chips. For example, Ford is forced to reduce the volume of production of the most profitable model – the F-150. IHS Markit estimates that the industry will lose about $61 billion in 2021. The shortage hit both data centers and gaming platforms (Xbox and PS5). J. P. Morgan believes that chip manufacturers will need another 1-2 quarters to restore pre-crisis activity.
Problems with Nvidia's chips began in July 2020. Analysts (Bloomberg) predict that the peak of the deficit will be in April (-56%) - this corresponds to the forecasts of the representatives of the company itself. After that, its production capacity should increase by 20%. This will not be enough to fully compensate for the shortage, but a start will be made. Bloomberg believes that Nvidia will be the first company to solve these problems and resume production. AMD and Qualcomm will be able to overcome the difficulties only by September.