Gaming Chip Shortage Could Continue Through 2024, Nvidia Warns

Nvidia executives predict that a worldwide shortage of gaming chips will persist until at least the end of 2024, potentially worsening challenges for the video game industry. The shortage stems from high demand for AI-related technology, which has manufacturers prioritizing more profitable data center components over consumer gaming hardware.

The worldwide shortage of gaming semiconductors will likely continue through the remainder of 2024, according to a top Nvidia executive, potentially adding more difficulties for an already struggling video game sector facing declining sales and reduced consumer interest.

During Wednesday’s quarterly earnings conference call, Nvidia’s Chief Financial Officer Colette Kress indicated that supply limitations will continue to impact the company’s gaming division this quarter and in upcoming months, despite robust consumer demand for their products.

“As much as we would love to have more supply, we do believe for a couple quarters it is going to be very tight,” Kress said.

“If things improve by the end of the year, there is an opportunity to think about what that is from a year-over-year growth. But it’s still too early for us to know at this time.”

The semiconductor shortage has intensified as technology companies rush to expand their artificial intelligence infrastructure, creating demand for memory chips that far exceeds available supply. This situation has driven up costs and led manufacturers to focus on producing components for more profitable data center applications.

The supply crunch has affected consumer technology products including mobile phones and computers, along with gaming systems. Nvidia’s processors power many PC gaming setups and Nintendo’s Switch gaming device, while Sony’s PlayStation and Microsoft’s Xbox systems rely on AMD components.

Industry analysts have painted a grim picture for gaming console sales. Research company TrendForce projected in December that console sales will drop 4.4% this year, a worse outlook than their previous estimate of a 3.5% decrease.