Correction, 2:44 p.m. PST: This story initially misstated the day Nvidia slashed its revenue guidance by up to 50 percent. It was January 13.
Nvidia posted a fourth-quarter loss of just under $148 million and a 60 percent drop in revenue as demand plummeted.
On Tuesday, the largest graphics chip supplier reported a loss of $147.7 million, or 27 cents a share, compared with a profit of $257 million, or 42 cents a share, in the year-earlier period.
The Santa Clara, Calif.-based company posted revenue of $481.1 million, down 60 percent from the $1.2 billion reported for the fourth quarter a year ago.
Excluding special items, the loss would have been $94.4 million, or 18 cents a share. Analysts had expected a loss of 12 cents a share on $587 million revenue.
Shares of Nvidia fell more than 7 percent in after-hours trading.
"November fell off a cliff," said CEO Jen-Hsun Huang, addressing the decrease in demand, during an earnings conference call Tuesday. Chief financial officer Marvin Burkett added that December was worse.
Nvidia had slashed revenue guidance by up to 50 percent back on January 13.
Most of the major PC chip suppliers, including Taiwan Semiconductor Manufacturing Co. (TSMC), have cited a dramatic fall-off in orders from customers. TSMC has said it expects the chip industry to decline by mid to high single digits in 2009, "with very little visibility."
iSuppli, which tracks the PC market, said in its Q4 2008 Market Tracker that shipments of desktop PCs--where most of the high-end, high-profit-margin graphics chips go--are forecast to decline by 6.4 percent in the quarter on a year-over-year basis. And iSuppli expects the desktop PC market to get worse in 2009, with desktop PC shipments falling 5.5 percent to 146.2 million units.