Shortage of Chips Worldwide and How Nvidia is Tackling the Issue to Remain the Market Leader
Nvidia is an American multinational technology company that deals in Graphics Processing Units (GPUs) and graphic chips for gaming and professional markets. It is also one of the biggest players in the mobile computing and automatic market. Its “GeForce” brand is one of the most chips sought-after. Right from its inception, the company has been at the forefront of technology and has always been regarded as one of the most innovative ones in the market.
Recently, Nvidia was in the news again and for good reasons too. It crossed the 700 billion dollars threshold at the Dow Jones for the first time. And in the week ending 5th November 2021, it was valued at 745 billion dollars. This makes it the seventh most valuable company in the United States as it just left behind Berkshire Hathaway. And there is one good reason for the amazing success of Nvidia off late.
Let me define why this company is looking at becoming one of the most valuable ones in the US. It offers critical support to their entire gaming industry and is also related to handheld devices and smartphones.
Shortage of Chips is Here to Stay for Some Time
The crunch in chip availability worldwide is real and, in some cases, it was evident for over a year now. Alongside other hardware necessary in smartphones, tablets, and laptops/PCs, it is going to be a big deal due to the global crunch, which is now biting us. In fact, In the next few weeks, the condition is going to deteriorate further as the holiday season comes near. Many Industries not just in the US but around the world are now reeling from the effect but there is not much one can do.
It is not just Nvidia, as Intel and AMD are also of the view that the current shortage will continue for around two more quarters. And the situation will only settle down in the third quarter of 2021. So, it is not just critical for the smartphone manufacturers but also for any mobile app development company too. With that decline in sales for smartphones and handheld devices, the requirement for a new app from many businesses will be less than normal. And that will propel them to hold on to their new projects and app development will also suffer.
GPU shortage image smartphones virtually handicapped as most of the features nowadays rely heavily on GPU. The role of the CPU is not that much in processing with graphics for the high-resolution games and videos. This is extremely bad news for all the businesses around the world. And even the end-users as many people will not get the tech gadgets as promised by them to their loved ones.
The Shipping Backlog is Another Key Factor
In some cases where the tech companies can get their required hardware and other peripherals, the global shipping backlog is hurting them. The increase in the shipment cost is another factor but the very reason for the delay is that your shipment can reach its destination in six months. Yes, you have heard this right, and in extreme cases, it is even beyond that period. And that is why even the most optimistic companies some time ago are now downgrading their future sales and revenue figures.
The sitting background in the high prices of energy and other aspects also contributed to this situation. And now that everything is getting worse, there is not much one can do. That is why the scenario is going to be very tough for the industry and the consumers as well. Backlogs are usually displayed within weeks but this scenario is different. As businesses around the world have more or less reached their pre-pandemic peak, the situation in the last two years or so has been unprecedented. And that is why situations like this will be a norm, even in the future.
The Competition Between the Industry Giants
The competition for mobile gaming and hardware has heated up in the last few years. The competition of Nvidia with AMD has been one of the most closely fought battles in the recent past. And there is no looking down the GeForce GTX 1660 processor has been in direct competition with AMD RX 5500 XT. Some of the industry analysts give the AMD processor more brownie points than Nvidia. But only time will tell which company will come out triumphant in this battle.
Until then, it is Nvidia that is venturing into new vistas and Metaverse is one of them.
Future of Gaming as Nvidia Shifting Towards AI and Metaverse
The introduction of AI in gaming is not a new thing. It has been done for quite some time now and several app ideas are already in the pipeline which will be in the favor of the gamers. Metaverse is obviously not just about gaming but also combining many aspects of AI, VR, and VR to make a great space for everyone to enjoy. Facebook has started very early and is leading from the front. But that has a lot to do with their marketing. And companies like Google and Microsoft are also hot on their heels.
Nvidia is also looking to make the most of this scenario. The annual GTC developer conference will be one event where Metaverse will be at the center of attention. Highlighting the opportunities will make things spicy for Nvidia. It is already moving forward at a rapid pace to get a head start in this latest technology. It may turn out to be the future of the Internet and change it forever.
Over to you
What do you think is going to happen with Nvidia? And how it is going to tackle the issue of shortage of chips in the market? And now that businesses worldwide are facing this, what will be the consequences of it in the long term? And obviously, your thoughts about Metaverse will also be beneficial for the other readers as well.
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