CHW: What do you think about the Lucid Hydra 200 Chip?
 
JHH: I don’t know, it sounds like terrible idea. There is so much software going on, drivers, applications and optimization that to think that there is no software is a bad idea, too much to expect. Plus SLI and Crossfire are available to anybody.

CHW: Can we talk about the next generation? I get the impression that Fermi won’t be as good for gaming as it will be for parallel computing, can you comment on that.
 
JHH: You don’t have to worry, we presented Fermie this as a parallel processor, way because GTC is not a gaming event, it is a parallel computing event.
The new graphics capabilities of the new GeForce has not been revealed yet, we have some really exciting technologies to share, of course one of the most interesting technologies we shared it yesterday, in the future there will be rasterization and raytracking you won’t have to choose.
There are also a lot of other exiting secrets that we will talk about later.

CHW: Will Fermi be ready before for gamers?
 
JHH: Yes, testing for gamers take the same amount of time that for scientists, there is nothing more frustrating that wanting to game and the computer crushes. The time to get the hardware to market is really fast for gamers.

CHW: Are Gamers the most profitable market for NVIDIA?
 
JHH: I would say probably not, 2/3 of our revenue come from games but 2/3 of our profit comes from Quadro workstations,

CHW: How do you plan to always be the best? How do you achieve this?
 
JHH: The best way to do it is to have no backup plan, let me give you an example, when you are flying trapeze, swinging… they say that you should pretend that there is no net, now of course when they fall down is good to have a net, for us we have no net, my employees know there is no net, there is no safety, there is no back up, as a result you have to create good things that is how we became NVIDIA.
Now we are not always the best, but we always try to be the best the absolute best, over the course of the last 15 years on average we have been absolutely the best, what continues to challenge ourselves is to be more creative more imaginative. There are no warranties but that is why you need to have such good people.

Big Bang Fuzion reste prévue, mais qu'elle devrait sortir durant le premier trimestre 2010, MSI attendant que Lucid améliore ses pilotes pour Windows 7 et que le mode permettant de mettre une carte AMD et une carte NVIDIA en parallèle fonctionne.

Jen-Hsun Huang:
 
Gross margins on 55 and 40-nanometer products are similar. 55 is fine, it’s a perfectly gross margin and so will 40 be

Jen-Hsun Hang:
 
I think that we should have made -- there is probably an opportunity for us to have done somewhere between $50 million to $100 million more last quarter and certainly this quarter. And so it is certainly constraining our growth.  
 
Is it contributing to share loss? Sure. We demonstrated that this quarter. We lost, according to Mercury Research, I think it was two or three points of market share and it was completely attributed to lack of supply.

Jen-Hsun Huang:
 
And then starting the end of this coming quarter and the next quarter, we are going into a new product cycle and that new product cycle is based on Fermi and we are going to bring to the market for the first time in history the ability to do raytracing interactively in every single workstation.  
 
Customers really ecstatic about that capability and I can't wait to revolutionize graphics again. And so that’s -- the short-term, it’s the pull and the design pipeline, which we track very carefully, and then shortly after that, the ramping of Fermi GPU.

Jen Hsun Huang:
 
I expect GeForce to grow next year, not only because the market will be healthier next year. There is real evidence that GPU adoption is increasing. There is and the the enthusiasm behind Fermi, our next generation GPU architecture, is just out of this world. I mean, it’s just way over the top.  
 
And the reason for that is this is because the first brand new architecture we have created in four years and instead of an incremental change to DX11, this is a fundamentally new architecture and the performance is fabulous. And so we are expecting to be very successful with Fermi and all of its derivatives.

Glen Yeung Citigroup: when you say performance of Fermi is great, are you saying that relative to your previous architecture or also relative to the current competition?
 
Jen-Hsun Huang: Both

David Wu, Global Crown Capital:
 
Okay, that’s good. Jen-Hsun, I was at the show when Fermi was previewed and you showed very good numbers on the computing side. Relative to your competition that is shipping products, you didn’t talk anything about the graphics side -- should I assume that the graphics performance is equally superior to the competition that is shipping right now?
 
 
Jen-Hsun Huang:
 
We didn’t announce anything on graphics because it wasn’t graphics day. When we announce GeForce and Quadro, we are going to talk about the revolutionary graphics ideas that are designed into Fermi and so we are looking forward to do that in the near future. And so please be patient with us, the market is anxiously waiting and we have enthusiasts all over the world that are waiting for us to ship it. You know, every four years or so, we revolutionize the GPU with a brand new architecture. If you remember the G80, what became the GeForce 8800, was probably one of the most successful products in the history of our company and we’ve been doing incremental changes to G80 since then.  
 
And now with Fermi, it’s another revolutionary architecture and I’m expecting to take the GPU market up another notch.
 
And relative to the competition, the market has really spoken, although it’s a fast chip [RV870], it’s not that fast and it is basically an RV770 with DX11. And I think that you could incrementally make changes for a number of years but certainly not forever and we are going to really change the marketplace going forward with Fermi and so that’s our focus and we are trying to get it shipped as soon as possible. The demand is really, really strong for it and we will tell you about all the great graphics features when we launch.

David Wu - Global Crown Capital :  The chip is a very big one. I was wondering, can you shrink it quickly?
 
Jen-Hsun Huang:
 
Well, there are many derivatives of Fermi and so each one of the processors are designed to be the right size of its market.  
 
You know, back in the good old days, everybody used to tell me that MP10 was too big and then MP20 was too big and MP40 was too big, MP30 was too big, it’s only too big if it doesn’t do anything and if it is, but if the performance is excellent, what consumers enjoy is something that is surprising and delightful and shocking and just the next level. And that is what we have built for them.

Jen-Hsun Huang:
 
Next year is going to be an interesting first quarter because in fact, we will need more wafers than ever in Q1. And the reason for that is because, I mean more 40-nanometer wafers than ever in Q1, because we are ramping, we are obviously fully ramping Fermi for three different product lines, GeForce, Quadro, and Tesla.  
 
We will be fully ramping MCP89. We will be fully ramping TEGRA. Not to mention the 40-nanometer products that we currently have that are fully ramped up, and so I am expecting Q1 to be a pretty exciting quarter for us because we just have so many new products.

Joanne Feeney - FTN Capital:
 
I wanted to try to get into the issue we’ve been hearing about in the market. It’s been noted that your higher end discrete graphics processor, the 270, 285, 290, that line, has been in short supply and we are wondering if you have made a strategic decision to de-emphasize that segment of the market or if you are supply constrained even at 55-nanometer, or if you have just seen demand tail off and that is why we have seen supply slow to a trickle here?
 
Jen-Hsun Huang:  Well, the demand for GTX275 and 285 and 295 is really high. We have nothing left. We’ve just got nothing left.  
 
 
Joanne Feeney - FTN Capital:  So this is a supply problem  
 
Jen-Hsun Huang:
 
We shipped everything we could last quarter and we are not trying to keep any for a rainy day and so customers are just yanking parts of our hands and so we are just trying to keep up and our focus is just to keep up with our demand across the board. And the sacrifices that we have to make sometimes in our own channel products, particularly the high end so that we can fulfill OEM demand, is a sacrifice that we have to make and we made plenty of that this quarter and we will have to make some of it next quarter.

Hans Mosesmann - Raymond James:
 
A couple of questions -- regarding 40-nanometer, when does the situation get better? How are the yields coming along and what is your allocation from your foundry? Is it something that would allow you to get out of this perhaps earlier than your competition?
 
 
Jen-Hsun Huang: The yields are improving. I would say that without exception, yields are better today than it was at the beginning of last quarter. [TSMC] and Moores and his entire management team are just intensely focused on this and they are making progress every single day.  
 
Yield enhancement is NVIDIA's number one strategic objective now. It is all we do. If floods my entire email. That is all I talk about. That is all I think about. That is all we meet about. And so it is of vital interest to both of us that we get 40-nanometer yields up to the levels that are absolutely world class. And I have no question whatsoever that it will and based on the work that -- and the effort that the TSMC team is putting into it, I have every confidence, complete confidence that we will get there, and soon.  
 
Relative to the allocation, you know obviously, I don’t know what other people are allocated -- all I know is this; we’re not allocated enough.

Jen-Hsun Huang:
 
The market demand for core 2 duos are still really, really strong because core 2 duo, as you know, is the best CPU that has probably been designed by anybody on the planet in the last 10 years. The core 2 duo is not just fast but it is fast and low power and it is just exquisitely engineered.