Nvidia (NASDAQ: NVDA) announced this week that it expects its Graphics Processing Units to be in short supply for much of the year due to the ongoing chip shortage. Nvidia is joined by Stellantis (NYSE: STLA) and General Motors (NYSE: GM), which have also taken a hit to production due to ongoing shortages.
Upgrading your graphics card might have to wait until later this year or next year due to the still-ongoing market-wide shortage of computer chips. In January, the company previously warned that it was facing supply line shortages, a side-effect of the coronavirus pandemic forcing many chip plants to shut down. Given that other major chip consumers, such as Stellantis and GM, have been forced to suspend production to contend with the shortage, it doesn't come as a shock that a chip-heavy producer such as Nvidia is also having problems.
"Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year," said Nvidia CFO Colette Kress during the company's Investor Day event.
The good news for Nvidia, and many firms, is that the dearth of supplies may begin to ease as many plants re-open and resume production. Nvidia is predicting overall supply to pick up as the year progresses gradually and production reaches pre-pandemic levels. However, this recovery is threatened by the prospect of renewed surges of COVID-19 due to the spread of new vaccine-resistant variants and spikes in infection rates in various areas of the country.
Until supply begins to meet demand better, however, GPUs and other chip-intensive computer products will likely remain hard-to-come-by. For Nvidia, this means that many customers will be forced to contend with long waitlists and inflated prices on third-party sites such as eBay (NASDAQ: EBAY).
Nvidia's shares don't appear to have been affected much at all by the firm's announcement. If anything, it appears that Nvidia has had a pretty good week so far despite it. Compared to Monday's opening price, shares of Nvidia were up 12.9% by the time markets closed on Thursday.