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The earnings warning by graphics chip maker Nvidia [ NVDA 9.899 
+0.329 (+3.44%) ] may be a symptom of bigger things, such as a glut of semiconductors.
A report today by Macquarie analyst Shawn Webster has some pretty stunning numbers:
That there are an estimated 10 to 16 million excess processors out there.
That's roughly 11 to 18 percent of the quarterly processor shipment rate, which above historic norms.
If the trend continues into the fourth quarter, that could translate into dollar volume of $1.1 billion to $1.9 billion in excess inventory.
Here's the rub: PC demand simply may not be enough to sop up all of the extra chips.
Why care? Bloated inventory is never good. Webster believes you would need 24 to 26 percent PC growth to make the extra chips disappear.
He further thinks if the trend doesn't reverse itself, there could be risk to consensus estimates for Intel [ INTC 18.43 +0.15 (+0.82%) ] and AMD [ AMD 6.09 +0.16 (+2.70%) ]. (Some analysts actually argue Intel could gain from Nvidia's pain—especially if there is a shift to the kind of integrated chipsets Intel makes.)
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