Graphics card manufacturer Palit Microsystems recently cut orders for about 400,000 Nvidia GPUs for first quarter of 2009 due to high inventory levels, according to industry sources. Inventory pile-up at graphics card makers from the second half of 2008 is expected to affect Nvidia's fiscal first quarter 2009 performance.

Nvidia has lowered its fourth-quarter (ended January 25, 2009) revenue guidance to a 40-50% sequential decline due to inventory reductions by its channel partners in the global PC supply chain.

Prior to Palit's order cuts, graphics card makers Asustek Computer, Micro-Star International (MSI), Gigabyte Technology and PC Partner have also reduced orders with Nvidia, according to the sources. Nvidia is estimated to have lost orders of almost 1.5 million GPUs, said the sources.

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