NVIDIA warns of supply shortages for the RTX 4000 series during the year-end sales season - Is it due to the transition to the next-generation GPU causing scarcity.

November 24, 2024

While NVIDIA announced strong performance in the third quarter of 2024, it also warned of supply constraints for the GeForce RTX 4000 series during the year-end shopping season. Colette Kress, the company's CFO, has indicated a policy of reducing production of the RTX 4000 series in preparation for the transition to the next-generation Blackwell architecture.

NVIDIA's gaming division achieved sales of $3.2 billion in the third quarter, achieving a 15% year-on-year growth. However, Kress CFO stated that the gaming division's sales are expected to decline on a quarterly basis in the fourth quarter due to supply constraints. This constraint is likely to affect the availability of GPUs for notebook PCs. However, the same CFO has indicated an expectation of supply improvement in early 2025.
Behind the supply constraints is the preparation for the transition to the Blackwell architecture-based next-generation GPU 'RTX 5000 series,' expected to be announced at CES in January 2025. Particularly, announcements for the flagship models RTX 5090 and RTX 5080 are anticipated. As for the current RTX 4000 series, while some chips for mobile devices are planned to continue production alongside the next-generation models, production of desktop products is expected to be gradually reduced.

The 'warning' of supply constraints can be interpreted as a strategic move to adjust inventory and maintain prices for the RTX 4000 series. Anticipating increased demand during the year-end shopping season, supply suppression enhances expectations for the next-generation models while preventing current model price erosion. Given the current scenario where the data center division accounts for 87.7% of total sales, prioritizing the production of more profitable data center products over consumer GPUs would be a logical decision. Ironically, this 'shortage warning' may even stimulate last-minute demand until the end of the year.