A little over two years ago, most of the semiconductor companies held an inventory-to-sales ratio at an average of 39%. Those ratios have steadily climbed since then, with one notable exception: Nvidia. Today’s average inventory-to-sales ratio is a whopping 63% and was 72% last quarter. Nvidia drove down the average this quarter and last quarter.
The good news is the R&D expenditures have also increased from an average of 21% in Q1’21 to 22% this quarter and 27% last quarter.
We’ll update these charts after Nvidia reports and we publish the Q3’23 Market Watch report.
In Q2’23, Nvidia drove its inventory down to $4.3 billion, while sales soared to $13.5 billion, making the ratio fall to 32%. R&D grew to $2 billion, just 0.02% of revenue.