Nvidia Corp (NASDAQ: NVDA), the powerhouse in chip manufacturing, has become a beacon of growth and innovation in recent years. In the third quarter of fiscal 2024, concluding on October 29, 2023, the company reported an extraordinary surge in revenue from all segments and major markets, coupled with an eye-popping surge in net income.
Nvidia’s global revenue grew a remarkable 206% YoY in Q3 FY24 to $18,120 million. On a quarterly basis, the company recorded an impressive 34% growth. Intriguingly, a substantial portion of this outstanding revenue surge is attributed to a singular country – Singapore.
Nvidia’s net profit soared an extraordinary 1,259% YoY and 50% QoQ, reaching $9,243 million during the third quarter of fiscal 2024. This remarkable profit growth solidifies Nvidia’s position as the world’s most profitable semiconductor company, surpassing its competitors, such as Intel, Samsung Semiconductor, and TSMC.
In comparison, TSMC (Taiwan Semiconductor Manufacturing Company), the world’s largest contract chip manufacturer, generated $17.28 billion in revenue and $6.67 billion in net profit during the third quarter ended September 30, 2023. Intel, another chip-manufacturing giant, generated $14.16 billion in revenue with a net profit of $297 million during the same period in 2023.
Now, let’s explore the factors contributing to Nvidia’s success in the global tech industry, spanning major markets and segments during fiscal Q3 2024.
Singapore: The Silicon Oasis of Nvidia’s Success
A substantial portion of Nvidia’s revenue in Q3 FY24, approximately 14.9%, came from Singapore. Even though the country contributed less than 20% to the company’s overall revenue, the revenue growth is jaw-dropping. Nvidia’s revenue from Singapore jumped 404.1% YoY, from just $536 million in Q3 FY23 to $2,702 million in Q3 FY24. Notably, this growth even outpaced Nvidia’s overall revenue growth of 205.5% compared to the year-ago period.
So now the question arises: What is the secret behind Singapore’s significant role in Nvidia’s triumph?
“I would highly think it’s due to data centers as Singapore has quite a lot of data centers and cloud service providers,” Maybank Securities analyst Jarick Seet told CNBC.
According to insights from industry experts, the secret behind Singapore’s significant role in Nvidia’s success lies in its function as a strategic hub. Nvidia’s chips are sent to Singapore for final assembly with other products before being shipped to various countries. Moreover, these chips play a crucial role in applications such as artificial intelligence, computing, and electric vehicles.
Sang Shin, a former executive at Temasek and GIC, highlighted Singapore’s role in building data centres. He emphasized the nation’s stability, talented workforce, robust digital infrastructure, and government policies conducive to digital and data services. This unique combination positions Singapore as a crucial player in Nvidia’s operations, showcasing how the nation’s attributes align with the demands of the digital and data services industry.
The United States accounted for 34.8% of Nvidia’s global revenue in Q3 FY24, totaling $6,302 million. The company recorded a whopping 193.4% YoY growth in its US revenue during the third quarter.
Meanwhile, Nvidia’s revenue from Taiwan also increased a strong 275.8% YoY to $4,333 million during the quarter ended October 29, 2023, representing 23.9% of the total revenue.
Nvidia revenue from China, including Hong Kong, increased 251% YoY, from $1,148 million in Q3 FY23 to $4,030 million in Q3 FY24. The region accounted for 22.2% of Nvidia’s total third-quarter revenue worldwide.
Data Center Dominance: Nvidia’s Crown Jewel
- A whopping 80.1% of Nvidia’s third-quarter revenue came from the Data Center segment, amounting to $14,514 million. The company recorded an astonishing 278.6% YoY growth in its data center revenue during the quarter ended October 29, 2023.
- Gaming contributed 15.8% to Nvidia’s global revenue in Q3 FY24, with gaming revenue surging by an impressive 81.4% YoY to reach $2,856 million. This growth reflects increased sell-in to partners after normalising channel inventory levels. The 15% sequential growth in Nvidia’s gaming revenue is attributed to strong demand for the GeForce RTX 40 Series GPUs during the back-to-school season and the commencement of the holiday season.
- Nvidia’s revenue from Professional Visualization more than doubled in fiscal Q3 2024, amounting to $416 million. The year-on-year increase is a result of higher sell-in to partners following the normalization of channel inventory levels. The 10% QoQ increase was primarily due to heightened demand for enterprise workstations and the ramp-up of notebook workstations based on the Ada Lovelace GPU architecture.
- Nvidia’s revenue from the Automotive segment increased 4% YoY to $261 million during fiscal Q3 2024, while OEM and other segment revenue remained flat at $73 million.
In conclusion, Nvidia’s stellar performance in fiscal Q3 2024 positions it as a true powerhouse in the global semiconductor industry. As Nvidia continues to expand its operations in Singapore, the demand for data centres is expected to remain high. The city-state’s rapid growth in digital apps, e-commerce, the Internet of Things (IoT), artificial intelligence (AI), crypto-trading, blockchain activities, and online gaming contributes to this sustained demand. This expansion into Singapore further underscores Nvidia’s strategic approach to capitalizing on emerging trends and solidifying its presence in key markets, ensuring a continued trajectory of success in the ever-evolving landscape of technology.
