Nvidia posted a $141 million loss in its second fiscal quarter, which ended August 1. Losses have widened since the same period last year, when the outfit was $105 million in the red.

Nvidia was forced to cough up $193 million for faulty mobile chips shipped in 2008. Had it not, it would have been profitable, but just barely. The company was also forced to take a significant inventory writedown due to poor demand.

On the upside, revenues jumped 4.5 percent to $811 million, although revenues still failed to meet analysts’ expectations. Nvidia is somewhat more optimistic about the upcoming third quarter and it expects revenues of between $836 and $852 million.

Although Nvidia would probably attribute its inventory issues to poor demand and the increasing popularity of integrated graphics, the obsolescence of much of Nvidia’s discrete GPU lineup is obviously becoming a major issue. Things should improve in the current quarter thanks to the recently introduced GTX 460 and soon-to-launch GF106 and GF 108 parts.

However, Nvidia doesn’t appear to have a bright future in integrated graphics and chipsets either, as it basically has no chipset business thanks to licensing issues. The company appears to be doing quite well in the discrete mobile market, thanks to Optimus power switching technology. However, with no mobile DirectX 11 parts in sight it’s unlikely Nvidia will keep up the positive trend in the months to come.

The company is still going strong in the professional graphics market and GPGPU, thanks to successful Quadro and Tesla products. As for Nvidia’s Tegra SoC, it appears to be a relatively good processor, but with no real market appeal. The company has scored some significant design wins, but there is little reason for optimism. Smartbooks never really took off, Tegra-based tablets are apparently on the way, but they are still not on the market. Microsoft’s Kin, the only phone based on the chip, was killed off by Redmond in what could only be described as infanticide, as it was on the market for mere weeks.

Nvidia shares hit a 52-week low following the announcement, but in they eventually closed at $8.96. Investors obviously aren’t happy bunnies and although new DirectX 11 GPUs should bring about some cautious optimism, the company is still confronted by numerous issues and it will clearly take months before investors regain confidence.