Back in August, graphics specialist NVIDIA (NASDAQ:NVDA) announced its latest graphics architecture known as Turing, as well as three graphics processing units (GPUs) based on that architecture: RTX 2080 Ti, RTX 2080, and RTX 2070.
NVIDIA said that cards based on those GPUs would sell for $999, $699, and $499, respectively, meaning that they're aimed squarely at the high end of the market. At lower price points, the company continues to offer GPUs based on its older Pascal architecture, which first made its debut in May of 2016.
During NVIDIA's most recent conference call, CEO Jensen Huang indicated that the company planned to eventually bring Turing-architecture based products to more mainstream price points. Let's take a closer look at his comments.
Turing coming to the mainstream at some point
Huang said he expects the company's Turing architecture -- which incorporates specialized hardware to accelerate a type of rendering known as ray tracing -- "to do really well."
In fact, although the company is currently coping with a glut of inventory sitting out in the distribution channels of its mid-range Pascal-based desktop graphics processors -- a glut so bad that CFO Colette Kress told investors that its "Q4 outlook for gaming reflects very little shipment in the mid-range Pascal segment to allow channel inventory to normalize" -- Huang seemed upbeat about the demand for its high-end Turing-based cards.
But nonetheless, the demand on the high-end products are fantastic. The 2080 Tis are largely sold out. I think it's still sold out everywhere. And so I think that the demand is great. I'm expecting it to be just a fantastic new generation.
The executive then went on to tell investors that "as we go on, surely, we'll bring Turing deeper into the mainstream."
"And so we don't have anything to announce today, but as usual, we want to bring a brand-new architecture to as many gamers as possible," Huang added.
Why not share anything?
There's a good reason NVIDIA isn't sharing anything about its upcoming mid-range Turing products -- the inventory issues around its mid-range Pascal-based products that I mentioned earlier.
To be clear, this doesn't mean NVIDIA itself is carrying a bunch of mid-range Pascal chips that it can't move. What it does mean is that its distribution partners have too many cards based on its mid-range Pascal processors that they need to sell to end customers.
If NVIDIA were to start talking up the virtues of its upcoming mid-range Turing-based graphics processors, or even providing insight into the potential launch of those products, this could lead prospective customers to postpone their purchases since they would know updated products were imminent. Huang's comments don't give potential customers an idea as to when such Turing-based products could come out -- and for good reason: NVIDIA's partners need to move those Pascal-based cards so that NVIDIA itself can start shipping significant quantities of mid-range GPUs to its partners again.
As far as how long it could take for the channel to drain this Pascal-based stock, in her prepared remarks, NVIDIA CFO Colette Kress said on the Nov. 16 call that "Pascal is well positioned as the GPU of choice in the mid-range for the holidays, and we expect to work down channel inventories over the next quarter or two."