NVDA
Reported 05/09/17
The Company
Nvidia first started out as a PC Graphic card company and has now branched out into GPU’s. These processors can solve many of the complex computer science problems and have now gone into the field of artificial intelligence (AI). AI is a buzz word at this time so it must be looked on with a little bit of skepticism, not because it will not happen, but because how long it may take to implement. The GPU allows companies to run programs with deep learning which can also allow inference. The difference between deep learning and inference is with deep learning you need a human to teach the machine and with inference the machine can actually learn on its own through trial and error. Nvidia actually makes different chip sets for different problems, such as the NVIDIA DGX AI supercomputer, the NVIDIA Drive AI car computing platform and the GeForce NOW cloud gaming service, all which allow specific audiences separate solutions.
Gamers select NVIDIA GPU’s for immersive games. The GPU also helps with the fastest spectator sport, eSports, which attracts millions of viewers. Also more than 100 million people participate in MOBA (multiplayer online battle area) games.
Professional designers use the GPU to create visual effects in movies and design products.
Researchers use the GPU to accelerate important applications, from simulating viruses to exploring the origins of the universe. A rapidly growing number of enterprises and startups, use GPU’s for deep learning that meets and in some cases surpasses, human perception.
The GPU product brands are aimed at specialized markets including Geforce for gamers: Quadro for designers: Tesla and DGX for AI data scientist and big data researchers: and GRID for cloud based visual computing users. The Tegra brand integrates an entire computer onto a single chip, and incorporates GPU’s and multi-core CPU’s to drive supercomputing for mobile gaming, entertainment devices, and autonomous robots, drones and cars. (Nintendo Switch uses the Tegra X1)
The company is Headquartered in Santa Clara, California.
Their Business:
They have two reportable segments- GPU and Tegra Processors, which are based on a single underlying architecture. From these they have created platforms that address four large markets: Gaming, Professional Visualization, Datacenter, and Automotive.
Businesses NVIDIA Visual Computing and Accelerated Computing Platforms and Brands
GPU · GeForce for PC gaming
· GeForce NOW for cloud-based game-streaming service
· Quadro for design professionals working in computer-aided design,
video editing, special effects and other creative applications
· Tesla for AI utilizing deep learning and accelerated computing,
leveraging the parallel computing capabilities of GPUs for general
purpose computing
· GRID to provide the power of NVIDIA graphics through the cloud and
datacenters
Tegra Processor · Tegra processors are primarily designed to enable branded platforms -
DRIVE PX and SHIELD
· DRIVE PX automotive supercomputers that provide self-driving
capabilities
· SHIELD includes a family of devices and services designed to harness
the power of mobile-cloud to revolutionize home entertainment, AI and
gaming
Business Strategies:
Extending their technology leadership in AI, Revolutionizing computing with the GPU’s parallel processing capability, Extending their technology leadership in visual computing, Extending their visual computing leadership into mobile and cloud computing platforms, licensing their intellectual property, enabling GPU computing platforms in key focus areas.
Nvidia’s business has evolved from a gaming products company to broader markets, from Chips to platforms and complete systems. So now they not only sell to their partner networks but have expanded to e-tail channels and some of the world’s largest retailers.
Manufacturing:
They do not manufacture their own semiconductor wafers, instead they utilize fables manufacturing strategies, which mean they use suppliers to make, box, and ship their product. They utilize Taiwan Semiconductor manufacturing Company LTD, Samsung Electronics Co to produce the semiconductor wafers and then use Advanced Semiconductor engineering, INC., BYD Auto Co. LTD, Hon Hai Precision Industry Co. LTD, etc. to perform assembly , testing, and packaging of products and platforms. They also purchase substrates and memory from various companies. (This all can be found in the 10K)
Competition:
This field is very competitive and moves at lightning speed. It is possible that NVDIA could lose their lead if other companies were to align to better compete with NVDIA. Their current competitors are:
• Suppliers of or licensors of discrete and integrated GPU’s and accelerated computing processing solutions, such as Advanced Micro Devices(AMD), ARM Holdings plc, Imagination Technologies Group plc, Intel Corporation (INTEL), and Xilinx, Inc.
• Also suppliers of SOC products that are embedded into automobiles and smart devices. Such as Ambarella, Inc., AMD, Apple Inc, Broadcom ltd, Intel, Mobileye N.V. (now purchased by Intel), Renesas Electronics Corporation, Samsung, and Texas Instruments Incorporated.
Employees:
As of January 29th , 2017 they had 10,299 employees, 7,282 were in research and development and 3,017 were in sales, marketing, operations, and administrative positions.
Jen-Hsun Huang co-founded NVIDIA in 1993 and has served and its President, Chief Executive Officer and a member of the Board of Directors since its inception. At one time he was a microprocessor designer for AMD.
Issuer Purchases of Equity Securities:
Beginning August 2004, the Board of Directors authorized, subject to certain specifications, to repurchase shares of their common stock. On November 7, 2016, the Board authorized an additional $2.00 billion under the repurchase program and extended it through December 2020.
Through January 29, 2017, they have repurchased an aggregate of 245 million shares under the share repurchase program for a total cost of $4.59 billion. All shares delivered from these repurchases have been placed into treasury stock. As of January 29, 2017, they were authorized, subject to certain specifications, to repurchase additional shares of common stock up to $2.73 billion through December 2020. For fiscal year 2018, they intend to return $1.25 billion to our shareholders through ongoing quarterly cash dividends and share repurchases.
Andy