Nvidia Partners Increased Profits due to GeForce Supply Issues

The past year has not been particularly good for the PC industry as a whole. Despite the launch of Microsoft’s new Windows 10 OS and various hardware releases, PC shipments have continued to fall, facing heavy pressure from mobile devices and tablets. Some firms have been hit hard, with Micron for instance, reporting poor financials among others. There does appear to be a few bright spots though, with gaming related sales up, and for Nvidia AiB partners such as Asus, eVGA and Zotac in particular, this has meant increased profits.

Buoyed by the strong Maxwell 2.0 chip powering most of the 9xx series of graphics cards, Nvidia partners like MSI, ASUS, Galaxy, Colorful, Palit and Gigabyte have managed to increase their profits despite little change in shipments. This is apparently due to high demand in China, outstripping supply and raising prices by as much as 15% on average. With shipments not keeping up, this has meant that these partners have been raking it in over the 2015 year.

Colorful, ASUS and Palit for instance are seeing a 20% increase in revenue over 2014 despite shipments being the same. Gigabyte however, went the opposite route and kept profits the same despite a 10% drop in shipments. Since the profits are going to the OEMs instead of the retailers, the price increases are probably due to the OEMs. Instead of increasing production and shipments to meet demand, it looks like the OEMs have decided to keep supply constant and raises prices instead, which is bad news for the consumer as they will ultimately pay more for the product, but great for the manufacturer as they haven’t had to work any harder to meet the demand. It may also hint that a launch for Pascal is expected soon as Nvidia and their partners start clearing the channel to pave the way.