nvidia warns of potential gpu shortage this holiday season
Santa Clara, Thursday, 5 December 2024.
NVIDIA has alerted the market about a potential shortage of its RTX 40 series GPUs in the fourth quarter of 2024, driven by heightened demand. CFO Colette Kress mentioned during the company’s Q3 earnings call that although gaming revenue reached $3.2 billion, a 15% rise from the previous year, the fourth quarter might face supply constraints. This could lead to limited availability and higher prices during the holiday shopping season, potentially affecting NVIDIA’s market position and stock value. The company is also preparing for the launch of its next-generation Blackwell architecture at CES 2025, with the new RTX 50-series GPUs expected to be unveiled. NVIDIA plans to continue some production of RTX 40 mobile chips alongside the transition, suggesting a gradual shift between generations.
Market impact and supply chain dynamics
The anticipated GPU shortage comes at a critical time when NVIDIA maintains a dominant position in the gaming market, with its GeForce RTX 3060 holding a 7.46% market share [2]. The global GPU market is projected to exceed $98.5 billion in 2024 [2], making supply chain disruptions particularly significant. Current pricing trends already show signs of strain, with retailers maintaining prices above recommended levels [4]. For example, the PNY RTX 4080 Super is being sold at $1,020, despite a recommended retail price of $1,000 [4].
Healthcare and AI sector implications
The shortage’s impact extends beyond gaming into critical sectors like healthcare, where GPUs are essential for medical imaging and AI applications [6]. According to Bill Lynch from Pure Storage, GPUs serve as ‘the brains for AI’ [6]. The shortage is particularly concerning as Morgan Stanley reports these chips are ‘booked out 12 months’ due to high demand from cloud service providers [6]. However, large healthcare organizations with established cloud partnerships are better positioned to weather the shortage [6].
Future outlook and production plans
NVIDIA is actively preparing for its next-generation Blackwell architecture launch, with discussions ongoing between NVIDIA and TSMC regarding production in Arizona [2]. The company expects supply constraints to stabilize by early 2025 [1]. The transition plan includes continued production of select RTX 40 mobile chips alongside the upcoming RTX 50 series [1], suggesting a strategic approach to managing inventory during the generational transition.