Nvidia Addresses Supply-Demand Concerns For Next-Gen Products: 'The Cycle Times Are Improving...' CEO Reassures

During the fourth quarter earnings call on Wednesday, Nvidia Corporation NVDA CEO Jensen Huang addressed concerns about the potential supply constraints for the company’s next-generation products.

What Happened: During the earnings call, Bernstein Research’s Stacy Rasgon inquired about the anticipated supply constraints for the company's next-generation products.

In response, Huang acknowledged the issue, attributing it to the intricate nature of Nvidia’s products and the time required to ramp up production.

"The supply chain is really doing fantastic supporting us. And so overall, the supply is improving. We expect the demand will continue to be stronger than our supply provides and — through the year and we’ll do our best," Huang said. 

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He further explained, “The cycle times are improving and we’re going to continue to do our best. However, whenever we have new products, as you know, it ramps from zero to a very large number. And you can’t do that overnight. Everything is ramped up. It doesn’t step up.”

Earlier during the call, Nvidia's chief financial officer, Colette Kress, said supply for Hopper architecture products has been improving. She highlighted the continued strong demand for Hopper, anticipating their next-generation products facing supply constraints due to overwhelming demand.

"We expect our next-generation products to be supply constrained as demand far exceeds supply," she said. 

Why It Matters: Nvidia’s acknowledgement of potential supply constraints comes on the heels of a strong Q4 earnings report, where the company exceeded revenue and EPS estimates. The company reported a revenue beat of $22.10 billion and a non-GAAP EPS of $5.16.  

This surpassed optimistic predictions and represented a 22% surge compared to the previous quarter.

Previously, it was reported that Nvidia has been grappling with a supply crisis aggravated by increased demand for its RTX 4090 graphics cards. The scarcity of these cards, especially noticeable in Southeast Asia and Taiwan, underscores the difficulties consumers and manufacturers encounter.

This surge in demand occurs against the backdrop of heightened export restrictions on advanced chips to China by the U.S. government, further adding complexity to supply chain operations.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.