Nvidia’s Challenges – Business Week

Dodging a Hail of Bullets:

Chief Executive Jen-Hsun Huang is trying to beat back the challenges. As sales slow in the company’s core desktop-PC market, he’s pushing into new markets, including graphics chips for high-end notebooks and such low-end products as set-top boxes. On July 16, Nvidia released a new set of chips aimed at low-end PCs and set-top boxes. And Huang is striving to make sure Nvidia’s next-generation chip, code-named NV30, hits the market later this year, right on time.

Still, Nvidia’s problems look like they’re going to get worse before they get better. The company is having a tough time penetrating the new markets it has targeted. In low-end graphics chips, for example, Intel is pricing so aggressively that it is expected to grab 40% of the market by mid-2003, up from 17% now. Worse, ATI introduced its new Radeon graphics chip on July 17, and industry analysts say it’s a step ahead of Nvidia’s current top-line GeForce4 chip in speed and graphics quality.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.