Processor shipments are the next casualty as chip sales falter

(Image Courtesy: Nvidia)

The global chip crunch is squeezing the life out of graphics cards business, and demand forecasts are rapidly crashing down. World's biggest manufacturers of graphics cards - AMD and Nvidia, along with Intel - the latest entrant into this arena - all have revised their annual revenue projections, as demand continues to remain lifeless.

According to the website DigiTimes, analysts are expecting a heavy down trend in revenue for the graphic processing unit (GPU) market, as fear of a near 50 per cent dip in shipments looms large.

Intel has lowered its revenue projection to $65-68 billion, expecting a hit of $8-11 billion in income. The report expects a 10 per cent drop in sales for the overall PC market.

Chipmaker Micron Technology too recently said it is witnessing slower offtake for components used in data centers, considered to be the backbone of internet and business networks.

Some analysts are complaining that the COVID-19 pandemic had "falsely helped" in fostering a rising interest in PC and allied components. The initial rebound has not followed through in 2022. The other reason is the recent rout in cryptocurrencies, leading to lower demand overall, even for GPUs.

The street fears Nvidia Corp. will be hit hard by the crypto winter, and income could fall "at a pace beyond imagination," said the news report.

Analysts fear Nvidia's shipments could fall by nearly 50 per cent, even as the graphics card maker projects that its second quarter sales could be well-below its previously-stated outlook.

Mercury Research recently reported that computers and desktop processor shipments have sunk to their lowest level in nearly three decades. Notebook and Laptop sales will also be affected by lower demand, and Lenovo and HP too are expecting nearly 60 per cent lower shipments for their Chromebook models.

Amid this pall of gloom, AMD and Apple are the only two companies that are expecting positive results in the second quarter.