* New campus on hold after new building leased
* PC gaming-related products boost 4th-quarter revenue
* Projects 1st-qtr rev of $1.05 bln, plus/minus 2 pct
* Shares up 3 pct after-hours
By Noel Randewich
SAN FRANCISCO, Feb 12 Graphics chipmaker Nvidia
Corp has halted plans to build a flashy new campus that
could have rivaled the architectural ambitions of major Silicon
Valley neighbors like Facebook Inc and Apple Inc
Nvidia said a year ago it would use property it owns across
the street from its current headquarters in Santa Clara,
California, to construct one, and eventually two, eco-friendly
buildings in the shape of triangles. The triangle is a basic
building block in video game graphics.
But Chief Executive Jen-Hsun Huang said on Wednesday that
Nvidia put the project on hold after leasing office space late
last year in a existing building by its headquarters.
"We will absolutely need a new campus eventually. In the
short term, with this new facility, we're in pretty good shape,"
Huang said in an interview.
Earlier on Wednesday, Nvidia posted higher fiscal
fourth-quarter revenue that beat Wall Street's expectations,
fueled by the chipmaker's PC gaming components, even as it
grapples with an expansion beyond computers and into mobile
When Nvidia unveiled plans for its new campus a year ago,
Huang wrote a blogpost showing off images of buildings with vast
open floors optimized for "cross-functional work," with
skylights in the shape of criss-crossed triangles taking up
almost all of the buildings' roofs.
Nvidia has been just one of many Silicon Valley tech
companies to plan major headquarter improvements in recent
Apple has been planning a massive new, ring-shaped structure
near its Cupertino headquarters, while Facebook intends to
expand its campus in Menlo Park, with the roofs of buildings
doubling as park space in a project the size of 7-1/2 football
Nvidia's decision not to launch into its construction
project shows prudent restraint on the part of Huang, said RBC
analyst Doug Freedman.
The company has about 3,300 employees at its headquarters,
some of whom have already moved into the newly leased building.
"I like the fact they're not building a new campus. It's
almost historically been a great investment short indicator when
a company goes out and builds itself a new campus," Freedman
said. "It distracts management's attention from the issues that
allowed them to build the campus."
Nvidia is at a critical juncture. With the personal computer
industry losing steam, Nvidia has expanded its graphics
expertise into mobile devices. But it is meeting stiff
competition from larger Qualcomm Inc and has responded
by increasing its focus on automotive markets and other areas.
Nvidia's results in the fourth quarter, which ended on Jan.
26, reflected better-than-expected sales of high-end graphics
chips popular with game enthusiasts. That niche has suffered
less than mainstream laptops from consumers' growing preferences
for tablets. The company's revenue forecast for the first
quarter was also above analysts' expectations.
"The graphics market has been fairly resilient, even in the
face of poor PC sales," said Evercore analyst Patrick Wang.
"Folks still buy graphics cards to play games."
Nvidia has struggled to convince manufacturers to use its
Tegra chips in tablets and smartphones. In the fourth quarter,
revenue from Nvidia's Tegra mobile chip business fell 37 percent
while revenue from its PC graphics processor business rose 14
The company is increasingly marketing the Tegra line of
chips as ideal for powering entertainment and navigation systems
in cars. In January, Nvidia said it was broadening its
relationship with Audi, which plans to use the
upcoming Tegra K1 chip in more of its cars.
Nvidia said that during the quarter, it had lower sales of
Tegra chips for smartphones and tablets while increasing its
sales of Tegra chips for cars.
Overall, Nvidia's fourth-quarter revenue rose to $1.14
billion, up 3 percent from the year-ago period. It said revenue
in the first quarter would be $1.05 billion, plus or minus 2
Analysts on average had expected fourth-quarter revenue of
$1.053 billion and first-quarter revenue of $1 billion,
according to Thomson Reuters I/B/E/S.
Net income was $147 million, or 25 cents a share, in the
fourth quarter ended on Jan. 26, compared with $174 million or
28 cents a share in the year-ago quarter. Non-GAAP earnings per
share in the fourth quarter were 32 cents.
Nvidia shares rose 3 percent in extended trading on
Wednesday after closing up 3.6 percent at $16.83 on Nasdaq.