Chip failure associated costs, pricing and weak demand blamed for ?disappointing? Q2

Nvidia reports $120 million loss

Graphics specialist Nvidia has reported a $120.9 million net loss for the second quarter of fiscal 2009, ending on July 27th 2008.

The firm generated $892.7 million for the quarter compared with revenues of $935.8 million for the same time in the previous year, a decrease of five per cent.

Much of the damage came from the $196 million it was forced to spend on warranty, repair and returns of “significant quantities” of failing chipsets.

Pricing issues and a decline in desktop demand were also blamed for the loss.

“Our Q2 financial performance was disappointing. The desktop PC market around the world weakened during the quarter. And our miscalculation of competitive price position further pressured our desktop GPU business,” said Jen-Hsun Huang, president and CEO of Nvidia.

“In contrast, the rest of our businesses did not exhibit the same dynamics as our desktop business. The notebook GPU, MCP, and Professional Solutions groups grew a combined 27 percent year-over year.”

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