Nvidia (NVDA) CEO Jensen Huang doesn’t see the global chip shortage coming to an end anytime soon. The head of the largest chip maker by market cap, Huang is fresh off his virtual keynote at Nvidia’s GTC conference where he announced advances in the company’s metaverse and AI efforts.
But Nvidia still makes the bulk of its revenue, about 47% in Q2, from the sale of its gaming cards. And those continue to be in short supply due to the pandemic-induced chip crisis.
“I think that through the next year, demand is going to far exceed supply. We don’t have any magic bullets in navigating the supply chain,” Huang told Yahoo Finance Live on Wednesday.
“We have the support of our suppliers. We’re fortunate that we’re multi-sourced and that our supply chain is diverse and our company is quite large so we have the support of a large ecosystem around us,” he added.
The chip crisis kicked off at the start of the pandemic when automakers, expecting a slowdown in sales, cut their chip orders. But consumers had other plans and started buying up cars in droves. At the same time, consumers, trapped in their homes due to pandemic restrictions, started grabbing everything from workstations and webcams to gaming PCs and game consoles.
With so many industries vying for attention from the small number of global chip makers, a crunch was all but guaranteed. And it continues to play out now. Try buying an Nvidia graphics card or, heck, a PlayStation 5. If you don’t want to pay hundreds of dollars over the manufacturer’s suggested retail price, you’ll likely be waiting a while.
The demand has piled up so much that when products do become available, they sell out in an instant. We’re talking about people lined up in parking lots outside of electronics stores hoping to get their hands on a new Nvidia card. I’ve got an Nvidia card in my own gaming computer, but was lucky enough to get it in 2019.
Of course, Nvidia isn’t the only company contending with the chip shortage. Intel CEO Pat Gelsinger told Yahoo Finance Live last month that he doesn’t expect supply problems to get better until some time in 2023.
While Huang says the chip shortage will eventually subside, he doesn’t think the level of demand we’re seeing is transitory. Instead, he says it’s here to stay.
“People are starting to build more and more home workstations because their home is now their office,” Huang said. “And when they’re at home they prefer to have a permanent system, and so desktop computers are doing incredibly well.”
People are also spending more time gaming, he said, leading to more people trying to get their hands on Nvidia’s high-end graphics cards.
“I think these are permanent conditions, and we’re going to see new computers being built for quite a while. People are building home offices, and you could see all of the implications,” Huang said.
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