The markets continued their topsy-turvy ways, with the Nasdaq opening down 2.5% today. Optimism built throughout the day, closing the losses to just 0.26% by the time the closing bell rang. Today, we're checking in on two of the top storylines developing over the past 24 hours in technology.
Tech News No. 1: NVIDIA roars
With earnings season over, investing conferences are back on the agenda. One of the heavy hitters this week is Citi's Technology conference, which runs through Thursday. These conferences can give a good overview of different technology companies' trajectories, but they're also notable because companies will routinely drop new material information on their businesses.
In today's early session, Broadcom's
In the afternoon session, NVIDIA
The bullish forecast was foreshadowed earlier in the day, when Huang stopped by the Dow Jones offices and forecasted that the company's mobile unit will generate $1 billion in sales next year, as reported by Barron's Tech Trader Daily writer Tiernan Ray. That heavy sales growth indicates that the company is finding its own niche in the industry against larger rival Qualcomm
However, NVIDIA's Tegra mobile processor is still only about 20% next year's forecast. Plugging in NVIDIA's projected mobile sales, you can see that the company is also expecting strong growth in its graphics card business as well.
Segment |
Trailing Sales |
2013 Estimated Sales |
2013 vs. Trailing Growth Rate |
---|---|---|---|
Companywide sales | $3.7 billion | $4.85 billion (midpoint) | 31% |
Consumer products (Tegra) | $410 billion | $1 billion | 144% |
Graphics cards (GPUs and high-end cards) | $3.3 billion | $3.85 billion | 17% |
Sources: Company filings; Capital IQ, a division of Standard & Poor's.
A 17% growth rate in graphics cards might not look particularly impressive, but considering that NVIDIA's consumer graphics cards are often lumped in with the struggling PC industry, it's a pretty strong showing. NVIDIA's higher-end offerings have numerous tailwinds behind them but have also struggled to find a foothold. The segment has been stuck treading water the past five quarters as sales growth dried up.
Longer term, NVIDIA investors need to look at growth within the Chinese market. It gets quite a bit of media attention that NVIDIA is supplying high-end cards to the world's fastest supercomputer in China, but there's also a lot of action on the consumer side. China's PCs ship with a graphics card attach rate in the 80s, much higher than America's attach rate, which languishes in the 20s. With China being the world's largest PC market, NVIDIA's reliance on the emerging economic giant should only grow.
Tech News No. 2: Can Moore's Law continue?
Taiwan Semiconductor Manufacturing
That technology might look complex and confusing -- and it is -- but the key point is that it could address a key concern in semiconductors. Investors and consumers have become acclimated to the concept of Moore's Law, an idea that roughly equates to the doubling of computing power every two years. That rate has been accomplished by continually shrinking transistors and placing more items on ever more powerful semiconductors throughout time. However, we're rapidly approaching the limits of current technology. Transistors are already down to the size where every atom counts.
EUV attempts to move chip-making forward by using a light much more precise than existing technologies. However, it's not without its downsides. Here's how ARM Holdings
"To have a fab running economically," Segars said, "you need to build about two to three hundred wafers an hour. EUV machines today can do about five."
Taiwan Semi is also testing out other three other next-generation processes; the field of semiconductor design and manufacturing is at its most wide-open position in decades, and these changes could present opportunities for investors. For example, Intel's
That's it for today’s tech recap. To stay apprised, add any of the major companies mentioned here to our free My Watchlist service today:
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