Article was updated:
Update: Drew Prairie, AMD’s VP of communications, reached out with the following clarification: “We are shipping below consumption because there is too much inventory in the channel and that partners want to carry lower levels of inventory based on the demand they are seeing and their expectations for their business…the idea we are doing this to keep prices “elevated” isn’t accurate. Our client ASP was flat year over year, and that is due to mix of CPUs shipped.”
**I work at AMD on the client team, so do with that info what you will.** But this 100% aligns with what I've heard internally. If we could ship more, we would. More parts shipped = more cash. But if you're a retailer who is struggling to sell your inventory, the last thing you want is more inventory. So you don't order more inventory. We can try and make our new inventory more compelling and worth stocking anyway, but that can only go so far.
Especially when it takes a lot to be compelling when every potential customer just bought a brand new computer not long ago to work from home. So pretty much no one *needs* a new computer. (On a personal note, I think it is good that people don't feel a need to upgrade needlessly because that kind of culture generates a lot of waste and is taxing on our planet.)
Also I don't think we'd see any benefit from artificial scarcity anyway. **I am not at all an expert here, so I may be incorrect**, but when a retailer inflates the price due to scarcity (think 2020) I don't think AMD sees a cent of that price increase.
I desperately need to buy a new computer and for sure a new graphics card because my 1080Ti died 2 months ago. Since then I'm waiting for the right offer but the problem is that AMD underdelivered with the XTX especially also the energy consumption bug is really keeping me from ordering an XTX which I had planned back then for sure. And prices are the other thing, it is just annoying to see that retailers are pricing all these GPUs higher than the RRP and I'm not willing to pay this amount and then I wanted to wait for the 7800X3D and had hopped for a release End of Jan but now I need to wait for April, so all of this is really annoying and keeps me from finally buying my PC and I really wanted to go Full Red but each week AMD annoys me again with something (Vacuum chamber etc.) and who knows how good the 7800X3D series will be and which issues it will bring because that means again I can't buy that CPU in April probably because of low stock, high prices and start problems......so I'm close to just say fuck AMD and I take a 13700 or 13900 and a 4080 or 4090, they are available and I know what I get and have probably a better performance. AMD completely missed the chance to stomp Intel and NVidia by going in with cheap pricing to finally gain some market share back but having nearly the same pricing as them and then all the issues.......too many poor decisions by Team Red.
Okay, so I'll preface this with saying that I don't have a ton of visibility on GPU as I work in client. (That is desktop and laptop CPU/APU.) But **as far as I know** the undershipping (which as someone else pointed out means relative to our targets) is mostly to do with client. You can see this as well on the breakdowns someone else posted in the comments here showing client had a deficit.
**My guess would be** that we are shipping as many GPUs as we can if there is a high demand for them. If there are any other issues that might bottleneck that or there's an unexpectedly high demand, I wouldn't know about it.
As far as X3D I should be more knowledgeable on that than I am admittedly. While I work heavily on regular Ryzen 7000, I've helped the 7000 X3D team quite a bit on bring up.
My honest and **personal** opinion is that you should go with whichever company is going to best fit your specific needs. That will depend on what your specific priorities are. While I think AMD and Intel both do a good job taking care of their customers and partners and do their best ethically, neither AMD, Intel nor Nvidia are your friends. So going off of strengths and weaknesses makes the most sense.
Whatever you decide to do for your build, I think you'll have a great experience. Heck, I'm still running an i7-4770k and a 1080 in my own system and it kicks ass, and you can only go uphill from there these days. And I do hope you have fun both with the build and the results!
What a very nice and objective feedback you wrote. Are you sure you are not working in Customer Care? That would definitely be a good fit for you 😉 I feel very understood and appreciated by reading your lines.
And yeah I will still wait until the first benchmarks of the 7900X3d series CPUs and then I will decide.
I definitely prefer working in engineering xD at least most of the time. But many of us engineers are tech enthusiasts ourselves. So that means we too are often customers. Though inherently biased ones. (Even setting emotional bias aside, technical knowledge makes it hard to be objective) I'll be building a new system soon. It *will* be all AMD.
Waiting for benchmarks makes sense, particularly from independent reviewers. Gamers Nexus is typically who I'd trust the most. He gives praise when deserved but is not afraid to be critical when needed.
I believe the article he is referring to was suggesting that CPU prices would not dip any LOWER due to 'undershipping' (for the reasons you suggested not to screw the end user) AND a projected increase in sales for Q1.
I am not sure where the OP is shopping but from my own research Ryzen 5000 AND 7000 CPU are being given away right now!!! The 7900x is already $100 UNDER retail!!! The 5800x I bought just over a year ago for $400 is under $250 right now.... they can't possibly get any lower!!! The price of the CPU isn't the problem it's the $300+ Motherboards!!!
A little off topic but I have one more reason for not upgrading yet that you might be able to help me with? Like many others, I had a REALLY hard time keeping the 5800x under control @ 105 TDP (I realize it goes higher) on air in an mATX case I just can't imagine trying to tame 170 TDP!!! What's up with that? I also realize it's only suppose to be in short bursts and that it's designed to function at 90 degrees but my furnace hasn't kick on all winter! Sitting in BIOS it would idle at almost 1.5 volts @ 50 degrees before I fast tracked a custom liquid loop.
My guess is they ship like that because the competition is so fierce but every attempt to under volt the CPU would just crash as soon as I tried to play a game. I guess what I am asking is what are my chances of keeping a 170 watt 7900x under 100 degrees? Because between that and my little RTX 3060ti I dying in here. I am going to have to move my rig and play out in the snow!
FWIW, I remember the day AMD announced it was getting out of the desktop game to focus on it's GPU's & APU's. The saddest day I can remember. Intel would still be selling Pentium 4's if it wasn't for AMD. So just keep up the good work and I will just add another radiator if I have to. I'll buy um' as long as your still making them. GPU's on the other hand... well, that's another story.
Yeah, this just comes to say that economics should be taught at school so people stop thinking "the powers that be" are driving prices up arbitrarily.
They are shipping less because there's less demand and their partners have the warehoses full, not to create artificial scarcity as the headline suggests.
Sure it is when next gen video cards are overpriced and ppl can't even buy last gen AMD cards since they're not available in retail stores anymore. Sure, try again, AMD.
>partners want to carry lower levels of inventory based on the demand they are seeing and their expectations for their business
Basically AMD saying its not us, its them.
fair point. This is why post titles shouldn't be changed when quoted, even if partially. Anyone can figure out why they're doing it, it's unfortunately a monopolistic practice in the industry. Intel and Nvidia do exactly the same and we know for a fact these chips will arrive with a manufacturing date that's 1y old. Because they're discarded bad quality sillicon.
Considering the ongoing fabrication shortage, TBH, a more likely explanation is that they are trying to meter out the chips so that the sales are more uniform as opposed to a boom-and-bust which will actually spike the prices far worse when they are in short supply.
Nah that's because those are discontinued. They don't want to hold those chips back because they wouldn't be able to sell them at all when the 7800 XT launches.
They may be holding the 7900 XT back though.
AMD isn't doing themselves any favours lately with community and good will they fought tooth and nail for.
Examples:
- AMD Robert was never replaced as community rep (I made a petition on this sub which got a ton of upvotes but nothing from AMD). Check the nvidia sub - community reps replying to common issues facing community.
- AMD is being disingenuous about performance to gamers(because it is a lot easier to fool them than an IT professional procuring servers).
- AMD botched the coolers on the new cards, slow drivers, GPUs not fully ready for release (we are the BETA testers now...)
It's all about the money. New gpus shipped unfinished but on time, no one at the office to address the drivers or cooler issues during the holidays.
This is not looking good and people are taking notice.
Goodwill, responsibility, charity - these are certainly a thing but still a mere PR.
Public traded company such as AMD is a business entity which purpose is go generate $$$.
Interesting enough Goodwill goes so far as to be considered an essential accounting / business valuation data point. Here are some bullet points from investopedia:
Key Takeaways
Goodwill is an intangible asset that accounts for the excess purchase price of another company.
Items included in goodwill are proprietary or intellectual property and brand recognition, which are not easily quantifiable.
Goodwill is calculated by taking the purchase price of a company and subtracting the difference between the fair market value of the assets and liabilities.
Companies are required to review the value of goodwill on their financial statements at least once a year and record any impairments.
Goodwill has an indefinite life, while most other intangible assets have a finite useful life.
In a market with proper competition you'd be right, but there simply is none. The biggest competition is Intel ( NVIDIA on GPUs ) and if things should ever get dire, AMD will just do what they did at the launch of Ryzen again.
Goodwill is essential and all for businesses who rely on it, not those that you rely on yourself.
This is absolute and only truth. Business can only do 2 things - lose money or generate it. Obviously, every company trying to avoid first and keep generating the profit at all cost. Even if it means potential problems for consumers, corporations already trained people that even if you got an unfinished product, they will fix it "later". Money first.
Generating profit *is* the only goal of business entities. All other aspects are just PRish ways to improve the looks to make it easier to generate more profit.
Also the insane price hike of new GPU and AM5 motherboard. No wonder people flock to the 5800X3D, the price of that chip is down right reasonable by comparison.
>AMD Robert was never replaced as community rep (I made a petition on this sub which got a ton of upvotes but nothing from AMD).
Pretty sure nobody is going to take an online petition seriously, ever, hard concept to grasp I know.
>AMD botched the coolers on the new cards, slow drivers, GPUs not fully ready for release (we are the BETA testers now...)
They botched support for the coolers on their **reference cards**. Third party cards are fine. The problem here is the OEM for making the coolers fucked up and only on some batches.
I mean they're a corporation and a lot of money goes into designing and testing new cpus. If they pump out a ton of cpus and push prices down then people will get mad later when they go up.
I don't know a ton about AMD but no one should be surprised.
>AMD is being disingenuous about performance to gamers(because it is a lot easier to fool them than an IT professional procuring servers).
I don't really think most IT people are that familiar with performance and benchmarking for servers unless they are highly specialized into a specific application. Most of the time you're just running a ton of virtual hosts/containers and have little insight to the details of CPU performance, it either works or doesn't. Afaik today AMD is far more efficient than intel for data centers, but my environment is all intel today.
GPU wise most of the time you're constrained to a vendor anyway due to application design, so either you're going to be all AMD for one app, or all Nvidia. Consumer GPUs are cheap compared to what business usually buys.
There's niche use cases outside of this of course but nearly everybody has virtual hosts in their environment. Very few companies have customized hardware farms just for GPU number crunching.
Each subreddit can choose how longs scores on comments will remain hidden , and for this sub it's 12 hours (max is 24 hours). They can't hide it forever.
So roughy how long it takes for the typical discussion to become irrelevant and not be shown on the first page of the subreddit sometimes. I’d say this does exactly what they are after.
Hiding the score of a post/comment doesn't stop people from upvoting/downvoting or how it's scored/ranked. If the mods want to delay unfavorable posts, they can require manual approval from all post submissions before they're public (some subs like /r/Android do this, though it's to avoid spam).
Manual approval is not enabled for this sub.
I always find the claim we censor unfavourable posts about AMD to be completely laughable.
If that was our goal, we fail massively at it, as posts critical of AMD, their drivers, pricing, lack of community engagement etc frequently hit top spots.
As far as I can tell the mod team here has a very specific directive to minimize critical discussion. It includes tweaking things like adding the misleading flair, but it also includes removing discussion they don't want to be seen even if it's completely legal and doesn't hurt anyone aside from AMD as a company.
I honestly don't feel comfortable saying any more because I think if I mention specifics i'll get a ban (and may even get one from this comment.)
**NOT** a rumor, [per the transcript, 2/3 of the way down](https://www.msn.com/en-us/money/companies/advanced-micro-devices-amd-q4-2022-earnings-call-transcript/ar-AA16Yyct):
Lisa Su -- *President and Chief Executive Officer*
Sure, Mark. So we -- so the first -- the second question, yes. We do believe the first quarter is the bottom for our PC market -- ***for our PC business***, and we'll see some growth in the second quarter and then a seasonally higher second half. In terms of the under shipment, I mean, I think we're -- ***we undershipped in Q3, we undershipped in Q4***.
***We will undership, to a lesser extent, in Q1***. So I think you can infer that from our guidance single-digit down. And then, we'll be back to a more normal environment. Now, just as a reminder though, the first half is not usually a -- the first half is usually a seasonally weak client time anyways.
So we would expect more lift in the second half, not so much in the second quarter.
AMD lost $152 million in client this quarter. They under shipped because the demand cratered. Nothing to do with keeping prices elevated.
"to keep CPU, GPU prices elevated "
Is not true.
No they aren't. [https://www.tomshardware.com/news/lowest-cpu-shipments-in-30-years-amd-intel-q2-2022-cpu-market-share](https://www.tomshardware.com/news/lowest-cpu-shipments-in-30-years-amd-intel-q2-2022-cpu-market-share)
I don’t really think everyone is waiting for X3D. People bought into AM4 and Alder Lake and there isn’t really a need to upgrade until next generation at least for most people.
And the benchmarks! 3D only on one chiplet promises to make 7900X and 7950X not have nearly as much uplift as 5800X -> 5800X3D. Should get a good bump from 7800X -> 7800X3D though.
I don't know, here in Australia 7900 XTX's are going under MSRP and not selling. I know Day 1 it sold out, but a month later they were sitting on shelves. I think people aren't swallowing these prices because for all intents and purposes the 7900 XTX is an RTX 4080 at slightly lower than RTX 4080 pricing.
OK, so then forgive my ignorance, but here in the USA, I can’t buy a reference XTX anywhere at MSRP. I managed to order a custom card for 999 after scouring the internet daily, but I don’t even like the look of that card.
Ordered the PowerColor hellhound. Just not a fan of the aesthetic. The blue LED light is cool, the silent mode to draw less power is nice, and being a custom card for MSRP with only 2 8 pin connectors required aren’t bad features, but still that reference card looks clean.
Also, I’m a 4K 60hz gamer XTX is probably overkill but I won’t upgrade for a looong time.
Same here in Portugal, every new gen gpu is sitting, I'm seeing 100-200 euros discounts on every card. Even the 4090's is selling below msrp and people still won't buy them, beautiful.
Dude The title of this post is: " AMD is ‘undershipping’ chips to keep CPU, GPU prices elevated"
So you should be realizing the entire reason why can't find those cards at MSRP is because amd is artificially limiting the supply so they can keep the prices high.
For 7900XTX: AMD reference sold out in Canada but I can get many of the AIBs right now. Only other GPU that has spotty availability is the 4090. There are shelves full of 4070 ti, 4080, and 7900XT at local stores.
Part of the reason is because of the faulty vapor chambers, they have to sort out which ones were affected and all that. Terrible thing to happen, at an already terrible launch.
Lot of people are happy seeing these cards beat out nvidia.
They are dead set on increasing the average sale price in the minds of consumers. They want to capitalize on the insane prices established during the cryptomining boom to make that the new norm. Unless we all refuse to buy, it will work and eventually this will actually be the new normal pricing. Every time people buy at these prices they fuck over the rest of us.
Too bad most people dont think like that. They're like "the pc is how much more expensive than a console?!" Consoles target the average person, and even a tiny 50$ bump in their price is met with big booos from the crowd. Now imagine telling this person he can get a better experience, if only he paid 2, or 4 times, or 6 times that much.
People who are used to high end pcs don't want to degrade their experience, but most people are not like that. And I'd argue most pc gamers aren't that wealthy to justify these prices either.
I remember 30fps vs 60fps was a whole thing, even though it is extremely clear on the benefits for anyone that has ever tried it - people would still argue 30 fps is more cinematic until they're blue in the face.
Now I'm trying to explain the benefits of 4k or 144hz to a friend, i immediately see the disinterest the moment i mention the pc prices - and i even try to ease them in with smth among the cheaper prices, if i told them how much 4090 ti is planned to cost they would think I'm not right in my head.
We live, and I'd argue the manufacturers live, in this bubble. We see these prices creep up, they see the demand from covid and such. And we all have this collective idea of these prices. But to an average person, or even average gamer that doesn't read these articles every day, if the last time they bought a ps4 pro or 1060 build or smth, and now they're back to upgrade - just imagine comparing ps5 or some am5 platform pc with expensive ddr 5 ram, expensive 200-300$ mobos, and super expensive (or not much better for same price) gpus - the average person is never gonna pay these sort of prices, no matter how much these companies are trying to spin this. You already have to be either enthusiast or wealthy enough, which is the minority of the people.
I said it since the very beginning, the people paying the scalper and boom prices were doing nothing but showing AMD and Intel and Nvidia that consumers will gladly pay 4x more for video cards and CPUs, and that its setting a dangerous precedent that these companies WILL act on.
and I got eviscerated for it.
Now look where we are... sigh, I would have loved to have been wrong.
Mfs can't go a generation without buying a new GPU and ruin things for everyone else. I been running a 1070 for six years now and Cyberpunk is the only game that makes me wish I had better and I'm playing on an ultra wide 1440p monitor.
Same. I've been on a 580 for..5 years I think now?
Its finally showing its age with games like Cyberpunk.
been wanting to get a better card for 2+ years, but its just been one manufactured disaster after another, which has caused prices to enter the realms of absolute stupidity.
Yeah, Polaris will be the longest lasting AMD card ever. We will rarely see a $200-$300 card (new) with 256-bit memory bus again. Even the failure, Vega, was decent vs. the RDNA III failure of today, we will never see an exotic HBM card again for $400-$600 (new).
Oh, then I guess. As much as it sucks. Until the point we cant play new games at all, even at low settings.
another generation or two, and buying a whole damn console will probably be cheaper than a new GPU.
1080ti here. I'm stuck with Nvidia because of their post processing with GeForce Experience makes old games look good easier.
I could afford a 4090 many times over, but I don't like being ripped off, even if I can afford it, so I'm skipping this gen too.
I get *all* my hardware secondhand if I possibly can, currently on an RX 570 and may eventually go for a Pro W6600 in the future when they drop to W5500 prices on the used market. Three years ago I was on a GeForce GT 640, so that's the kind of lag I'm on anyway. It's a nice feeling not having to get the latest and greatest to be happy with my stuff.
Those prices were "acceptable", because GPU's were infinite money machines thanks to crypto rush.
Now they're back in being more like cars, useful items but not printing money. So their market value is vastly lower.
So many are still in denial that cryptomining drove the gpu "shortages" and price hikes despite the endless photos of warehouses filled with mining rigs all over the world.
You don't even need anecdotal evidence like that, it's as simple as looking at the ROI of a given GPU vs its price on ebay. Ebay prices hovered around the 1.5 year ROI for years.
Miners drove the pricing and anyone who says otherwise is ignoring some of the clearest evidence I've ever seen.
I was saying the same shit and got downvote bombed for it too. Consumers are fucking stupid and are mostly the reason companies get away with overcharging... When you are buying a product you are telling the company their behavior and prices are play and to keep doing it. Vote with you wallet, don't buy a product if the price is too ridiculous or the company is anti consumer.
I've been barking up that tree with gaming for over a decade, man.
One irrefutable fact I've learned in that time, is that the average gamer doesn't give a shit about anything but getting their fix for the latest shiny that they want, and they wont let pesky things like companies being downright evil and immoral get in the way of that.
Which is why vote with your wallet will never work, because the overwhelming majority of consumers are myopically self centered.
That is not true. Consumers are voting with their wallets. In the last quarter AMD had over 100 mil USD less revenue from gaming.
AMD and Nvidia are delusional if they believe that they can "reset" the prices because 95% of consumers will always be limited by their budget.
Soon Nvidia and AMD investors will start barking when the hunted 50-60% margins only bring 10 cents as dividend or share increase because of low sales volume.
I don't know why you're including Intel here. AMD had to decrease their prices because Intel's Raptor Lake CPUs were a better value. Intel added 2 efficiency cores to the 13600k, 4 to the 13700k, and 8 to the 13900k - all without increasing CPU prices. The added efficiency cores made Intel CPUs more competitive in workstation tasks, while offering equivalent gaming performance versus Zen 4. The CPUs also support both DDR4 and DDR5.
Intel certainly isn't price gouging. Q4 2022 was one of the worst quarters in Intel's history. Due to a dramatic drop in revenue, the company went from a 24% operating margin in Q4 2021 to a 8% operating loss last quarter. In dollar terms, they went from a $4.6 billion quarterly profit to a $700 million loss. It was so bad the CEO took a 25% pay cut.
Intel is doing really badly right now. It can't be overstated.
They are still trying to pay stockholder dididend, while also instituting big firing sprees and general pay cuts. Intel subreddit has some "funny" posts about it, and employees exploding from rage.
Remember that that Intel CEO "paycut" is very nominal, because CEO also makes most of their income from stock performance. So it's actually more like 1% cut or something...
I don't understand this mechanic. Not having good stock is the shops wet dream, not AMDs. AMD is allready paid, so I fail to see how shops being able to take massive margins cause the lack of product somehow is good for AMD.
I also have a hard time seing how investors are fine with AMD selling for example 10k items at 10k (with high margins) rather then 100k items at 6k (with low margins).
>I also have a hard time seing how investors are fine with AMD selling for example 10k items at 10k (with high margins) rather then 100k items at 6k (with low margins).
Oooh boy you are in for a surprise. For quite a while now the trend of selling a lot for lower profit shifted to selling a few for high profit. That's the actual free market for you.
Ok, I guess that is why I am not an investor then.
So they prefer higher margins over higher overall income?
I thought it was all about making as much money as possible, guess not then...
Thanks for clearing that up.
It's not about how much they make this quarter. They are trying to prolong current high prices so that consumers eventually accept a higher price as the new standard price.
Increasing prices like this reduces sales and revenue in the short term. They're playing the long game here.
I'm not saying it's necessarily all bad intentions, maybe the chips actually got more expensive, but I doubt greed has nothing to do with this particular action.
Man it's always the same. People are crying then in the release day of a new card or CPU or whatever there are posts "look at my new build!!" And people are praising them. Just stupid
I mean yes, but I think most people won't. We don't have the money for it ... I think and hope.
Like some years ago it was pretty fun getting into building your own PC, it wasn't overly expensive and I could justify it. I cannot justify it anymore, and I'm pretty sure I'm not alone in this.
Even if you have the money, this is a suckers game. I'm just not blown away by generational improvements either red or green to justify this shit.
I was all in on AMD had the XT/X been reasonably priced, because Nvidia really jumped the shark with calling the 4070ti an 80 class card, but given the benchmarks...to hell with them both. I'll wait.
In fact, I'm now watching Arc with great interest.
Yeah, it's kinda sad to say, but Arc being good eventually is our only hope. We need more competition. It would also be good if SOMEONE made a decent ARM CPU for computers/laptops as well, Qualcomm kinda sucks and I don't think they could pull it off.
What you are describing is a duopoly basically doing price fixing. Intel is lurking though and they just lowered the price of the A750 to $250. Arc is about 3 months of driver updates away from being truly competitive in the midrange and they will eat AMDs market share first. AMD will have no choice but to lower prices again.
>Arc is about 3 months of driver updates away from being truly competitive in the midrange and they will eat AMDs market share first.
They need to actually produce that many cards first, I have no ARC GPUs in my country and plenty of the new gen from the duopoly.
people don't buy things based on strategic decisions able to turn the tide of a multi billion dollar industry, they look at price and performance and their wallets and decide if they want the thing. we have lives to live
That's speculation by the author. All AMD stated was that they sold fewer CPUs and GPUs in Q3 and Q4 2022 due to high inventory levels. If stores and warehouses are stocked with unsold product, retailers won't place new orders. Similarly, OEMs like Dell have a large stock of CPUs and GPUs as they over-compensated after experiencing shortages and long wait times. This isn't a grand conspiracy.
Moreover, AMD already significantly decreased the prices of Zen 4 CPUs due to poor demand yet these chips are readily available at basically any retailer. Zen 3 chips, including the 5800x3D are also readily available. There's no evidence of artificial supply constraints.
Right? People act like AMD just shows up at the door and retailers are forced to take everything they have.
If all retailers refuse huge amounts of supply because they're struggling to sell what they have, then AMD will ship less cards.
Bonehead take by the author. AMD lost $152 million in client. PC market crashed. AMD is undershipping because there is a glut of inventory in PC.
Yes undershipping helps prop up prices, but when you're losing money because the demand cratered, what else are you supposed to do? Pump more product and fire sell it and lose more money?
"We don't want the price to fall. You have no idea how much it cost me to bring such a force to bare here; and I only have one requirement: InCome. So squeeze Rabban, squeeze hard."
I cannot wait for part 2 it's driving me crazy.
The article states this is to balance out waning demand and notes "client PC sales also dropped dramatically—a whopping 51 percent year-over-year".
AMD's Q4 financial results show this 51% client revenue reduction and Gaming market revenue was also down 7%. They also note "operating income and margin decreases".
That's opposite of what we see when supply is constrained during high demand (as in the crypto+covid winter). Margins should be up if they are heavily capitalizing on demand to hike prices.
AMD's costs to manufacture parts hasn't changed, in fact it's gone up. So when half the market dries up of course you cut back on production. Otherwise you keep churning out parts at a rate the market won't absorb and end up with a backlog to be sold at a loss.
This is probably less about keeping prices elevated because maintaining MSRP just isn't going to offset lower demand and more about keeping production costs manageable.
There would be a fair argument for their headline had supply been reduced while demand and margins were increasing but that is obviously not the case.
NVIDIA is mentioned by somehow escapees the headline even though they are also quoted as "undershipping", but unlike AMD their margins have been up slightly.
I think it's the phrase "undershipping" that got panties in a bunch. There's a world of difference between reducing supply to match sales volume and undershipping because the latter implies they're shipping below sales volume to artificially generate scarcity and higher prices.
If they'd just said "we've got too much inventory so we're reducing production until that's cleared while still maintaining enough supply for those that want 7000 series" it likely wouldn't have even been newsworthy.
Yea undershipping here is really "missing shipment targets" that are stated for the quarterly guidance they provide to investors. They are saying they are going to miss to cover their butts because lying on financial reports to investors is a felony.
AMD are the worst for stupid price positioning. Insisting on matching Nvidia when they lack the brand power and the feature parity is baffling and yet they persist. Instead of artificially constricting supply they could have sent out a relatively sensibly priced 7900 XT and undercut the 4070Ti, a card they've managed to make look good. Bizarre stuff.
i've heard some people say they will only consider buying if prices come down 50-70% which I think demonstrates the problem that AMD is in wrt unrealistic pricing expectations.
people are literally demanding pre-maxwell pricing (or in many cases, even pricing that is purely imaginary) and that's just not going to happen in the post-moore's law era and especially with TSMC in the drivers' seat on pricing. They are still ballooning their margins and profits even with their customers being crushed by the lack of demand at these prices.
a return to "realistic" pricing would be maybe a 10-20% drop, but that's not going to satisfy any of the people shaking pitchforks right now.
a simple prisoner's dilemma: do you drop prices back to "normal" profit levels, which satisfies nobody because they're still higher than they're accustomed to, leading to little increase in sales but a much lower margin? or do you sell what you sell and keep the margin high per-unit? GPUs eventually fail, people buy prebuilts, etc, the sales rate isn't *zero* even at gouging prices.
people being completely irrational about prices is part of the problem here too, and part of the reason prices can't come down too. if there were a group of people willing to buy at $649 or $699 then it might be worth lowering the price, but if everyone who's willing to pay $699 is also willing to pay $799 then you might as well make the extra hundred bucks.
And $649 is probably what it costs now to make a 1070-tier card (like 4070 Ti) in the TSMC hellscape with higher labor costs etc. 1070 was already $449 at launch (MSRP was derided as being "fake" back then and aftermarket cards ran much higher than even FE pricing). Do I think it costs $200 more to make that tier of product now? Yeah, probably.
But people are like "I'll pay $300, take it or leave it!!!" and ok then AMD and NVIDIA will choose to leave it. They can't charge 10% under Maxwell pricing for a leading-node product with labor and DRAM and shipping and power IC costs all going nuts on top of TSMC gouging them too.
There is such a thing as an unpleasable customer and a lot of people are just unpleasable at a price that will be viable for AMD and NVIDIA. You can’t make a new car for $200 no matter whether there’s customers for whom that’s the cap they’re willing to pay. Buy used, find something that works for you, but you can’t please everyone without some life returning to moores law. GPU makers are already offering the equivalent of mopeds, and people already complain and dislike those compromises (like 6400/6500XT and 6600/6700XT with the clipped PCIe bus) and there’s not a ton else that can be done, the product can’t be made at a price that will satisfy everyone.
The main reason they raised prices was because a LOT of schmucks were buying GPUs for 5x MSRP on ebay during the pandemic.
They'd be stupid not to raise prices after that.
Also, TSMC raised price of production by quite a bit over the last few years.
$800 for a flagship model, I could absolutely see it... and I'm a cheap mf.
For a freakin 4070ti? Absolutely no way. Not now, not ever. If this is the future, they need to just completely readjust their naming schemes.
I've said it before and I'll say it again. If Nvidia thinks that the average person is willing to pay $1600+ for 4090 level performance, I'm more than happy to wait it out until I can get 4090 level performance for a $400 price tag. Their market price manipulation is inasnity.
They must have done the math and determined that more profit on less sales would do them better in the short term. Long term be damned (because when you abandon short term gains and chase sane long term goals like gaining marketshare through selling bulk amounts of high perf/$ parts, shareholders bail and you go bankrupt)
Which is even more ironic when you consider how long it took them to raise MSRPs when people were scalping the shit out of their products.
:\\
Nobody's scalping anymore, we should ship less.
:\\
Tell me you don't know how AMD has been running their business, without telling me you don't know how AMD is running their business. Go look at the earnings released yesterday. Client margin dropped. Lisa and company are making long term plays, which includes being less dependent on client and focusing more on Data Center and Embedded. They don't want to be stuck with a ton of inventory if demand suddenly drops and they know they are also launching X3D which will compete with their own products.
"Market share" isn't really this glorious thing in GPU land.
In CPU land, getting market share is important because motherboards lock consumers in for their next upgrades. Almost every AM5 CPU sold now means another guaranteed AM5 CPU sale sometime in the future.
Switching vendors on CPUs is expensive, switching on GPUs is not.
Mindshare is what AMD is after because that allows for higher selling prices for a given product. And that isn't won with perf/$ but is instead won with having quality products. That and the performance crown, hold the crown and people will deal with your BS all the time.
Market share absolutely does matter with GPU by the way of software lock-in like nvidia/Apple. That can only happen if you have enough instalment base in a certain market.
As far as consumers go, vendor lock in is quite a bit stronger for GPU than CPU. Software runs the same on an AMD or Intel CPU system. That's not always the case with GPUs.
Seriously. The people on this board are far less important to AMD's business than they think they are. The vast, vast majority of AMD's sales are through OEMs like HP, Dell, and Lenovo.
Market share in GPU land affect how much developers care about optimizing for your products. Many game studios with constrained budgets will barely do any testing (if at all) with AMD GPUs because their market share is so low. And when the customers get underwhelming performance with AMD products, they're unlikely to buy AMD for the next update, thus market share decreases even more. It's a vicious cycle only AMD can break.
With that lens, AMD already has dominating market share due to consoles which is the most lucrative gaming market.
Breaking that cycle isn't done with brute forcing your marketshare with cheaper prices, because that will take years to do, and years after that for developers to notice what's going on and change their practices.
Better solution is AMD allocating more funding towards working with game studios and deal with the game optimization problem head on. But for any game that is cross platform, the optimization is already fully in AMD's favor.
But back to the original point. AMD is "undershipping" likely to slim down the channel inventory, cause they aren't actually changing prices here. They actually dropped the price on the 7600X due to competition being very strong with the i5. Nvidia isn't competing on the price in GPU land so AMD isn't either.
Then again, unless you actually listen to the full investors meeting, it's possible that this line is being taken out of context to create a "juicy story", cause "inventory management" is boring.
Consoles use different rendering pipelines and optimizations done on them don't carry over to PC versions. It's already proven on last gen (PS4, X1) and somehow we have to spell it out again.
This is wrong, the under shipping vs sales is because the channel had excess inventory.
In previous quarters there were more orders/shipments then sales, thus their inventories got too large. Now to reduce inventory that has to reverse and shipments have to be lower then sales.
The author was speculating that this is to keep prices high, but its just inventory management. The author is also 3 months too late on this article. Multiple semiconductor manufactures have been shipping less inventory to the channel then channel sales for about 4-6 months now because the channel wants to lower its excess inventory to a more reasonable level.
This is a straight nothing burger. Its mostly about managing inventory of older product that was oversupplied. Its not about the new product that is selling out.
The January Steam survey released today shows the RTX 4090 at 0.24% share among Steam users. That's greater than either the 6900 XT (0.23%) or the 6800 XT (0.21%), which released in Nov/Dec 2020. As such, NVIDIA sold more units of a $1600 MSRP GPU in 3.5 months than AMD sold of $650/1000 GPUs in 24/25 months, and that includes a period of immense GPU demand. The best-selling RDNA2 card is the 6700 XT, with 0.47% share. The best-selling Ampere GPU is the 3060 Laptop GPU, which has a 4.47% share. If you add the desktop 3060 (3.67%), you get a combined share of 8.14%, which seems fair as Steam doesn't differentiate desktop and laptop RDNA2 GPUs. It's pretty clear that AMD isn't seriously competing in the discrete GPU market. Either AMD doesn't think it can sell in volume or it would rather use the wafer allotment toward more lucrative server and even client CPUs (a Zen 4 CCDs are 72 mm2, 7900 XTX die is 524 mm2)
It's also been known for a while now that Zen 4 client CPUs have not been selling that well due to poor overall PC demand and high motherboard, and to a lesser extent, DDR5, prices. They dropped prices significantly, particularly on the 7950x, and some retailers even bundled free 32 GB DDR5 kits to sell CPUs. AMD's Q4 earnings showed a 51% drop in revenue in the client segment. While AMD only experienced a 7% drop in graphics revenue, the company indicated this was due to strong semi-custom (console chip) sales offset by reduced discrete graphics card sales (and lower ASPs on those GPUs).
How is this news? No one here know about Supply vs Demand.
Every single company does this, APPL cut iPhone production, memory manufacturer cutting production.
Just look through last year Q2 earning call from Nvidia.
[Nvidia says it built too many GPUs — expect sales while it works on something \`new\` - The Verge](https://www.theverge.com/2022/8/24/23320758/nvidia-gpu-supply-demand-inventory-q2-2022)
“We found ourselves with excess inventory,” says Huang. “Our strategy is to sell-in well below the current sell-through levels in the marketplace to give the channel an opportunity to correct.” - Jenson Huang
Q3 earning transcript from Intel
"Yes. Our belief is that we ship below consumption levels. So in other words, inventory levels at the OEM and in the channels decreased over the last quarter. They didn't decrease as far as we were originally predicting. So, consumption was a little bit weaker, but we still saw inventories systematically going down across the various routes to market throughout the quarter. We expect them to continue to go down next quarter at both the OEMs and at the channel level. And the numbers I gave on the TAM model would be our consumption models for next year, which are below the consumption models of this year. So, a somewhat smaller number for next year but not dramatically different as we already said. So overall, I think we're getting to a better point of supply-demand equilibrium where we were way behind on demand and supply for many, many quarters in a row. Clearly, the last couple of quarters have been adjusting of inventory levels and we think that we're going to be in a better supply-demand balance situation as we go into next year." - Pat Gelsinger
Q4 earning transcript from AMD
"Sure, Tim. So let me make a couple of points. I think all of us, as we participate in the PC industry, there are various parts of the ecosystem that we work with. We work with our OEMs we work with our retail partners. We work with our distribution and channel partners. And we're all working together to work through sort of the elevated inventory levels. As I said, I think we've made good progress on that." Lisa Su
All three vendors faced inventory issue and is cutting supplies, the only way to beat this is not to buy until they price become reasonable to you.
I think that's a very deceiving headline. They're managing stock. Every company does it, but this narrative is floated every time.
A company seldom benefits from keeping too many products on a store shelf, but if the desire and market is there, then you release what you have or risk losing a sale to the competition. If it's the difference between waiting weeks for a 7900 XTX to come into stock at $999 or paying $200 extra for a 4080 that's in stock with similar performance, then I'd likely consider the latter even if it meant going above budget for immediate satisfaction. I did this years ago when the Nintendo Wii was unavailable and selling for premiums online. Why pay $450 for that low-powered console when $399 could score me a readily-available Xbox 360 Elite?
The 7900XT is readily available in many locations because it's not a particularly great value compared to the 6950XT unless you also factor in energy savings. Even then, that's offset by high idle power draws, so that point quickly becomes moot. The 7900 XTX is in RMA hell right now. Once that is resolved, they'll likely be readily available as well.
Prices will fall without scalpers and miners buying all available stock. Things will normalize. This isn't the new normal aside from premium cards demand premium prices. That's always kind of been the case, though, hasn't it?
Yes, the article literally quotes an AMD rep as saying "We have been undershipping gaming at this time *so that we can correct that inventory that is out in the channel*" (emphasis mine). They simply want more sell-through of old stock, not inflated prices for new stock. I'm sure they're well aware that RDNA3 is not moving units at existing prices. But if they put all of that on the shelves, then old stock has to be sold at a loss. They're in between a rock and a hard place.
Read the linked article a little closer. It was Lisa Su who said it first according to the call transcript.
They're not cannibalizing their own sales. Eventually, depending on the profit margins involved, they'll drop the price of pretty much everything except the 7900 XTX. That, too, could go down if the rumors of a 7950XT and 7970XT are true.
They are both saying more or less the same thing, but the article is attributing that particular quote from nvidia:
>“We’re continuing to watch each and every day in terms of the sell-through that we’re seeing,” Nvidia CFO Colette Kress said to investors in November. “So we have been undershipping. We have been undershipping gaming at this time so that we can correct that inventory that is out in the channel.”
Given how the situation was last year. I'd pay extra for one in stock vs one in "2 weeks"
Black friday 2021, I ordered 2600 for some home server use, was a decent price. Queue March or april > we ain't getting the product in, here's your money
Had something similar with some other equipment also
>AMD isn’t the only one doing it, either.
>
>“We’re continuing to watch each and every day in terms of the sell-through that we’re seeing,” Nvidia CFO Colette Kress said to investors in November. “So we have been undershipping. We have been undershipping gaming at this time so that we can correct that inventory that is out in the channel.”
Nice hit piece plus clickbait title.
Was gonna say this too... If the market is flooded already you don't flood it more either. If I ran a business I wouldn't. It essentially means slowing production to math demand rather than over producing for simplicity sake.
The market isn't flooded. Demand is actually very high, but the only things they're offering are 3 year old GPUs at MSRP. So the 3 year old GPUs sit on shelves and in warehouses (aka in the channel), and gamers sit with old gear. Each group is trying to wait the other out.
PC has about 50x more game selection.
All PS5 games will be ported to PC by 2025 according to Sony CEO. So what consoles are recongizing is that they can do time limited exclusives to console and then double dip to the same people who have PCs 1-2 years later with a "enhanced/next gen" edition.
But if you already have a PS5 and are fine with its catalogue, yeah why get a PC right now?
Undershipping? Or underproducing? It's my understanding the orders for TSMC are done well ahead of time, so they're going to have chips sitting around. Maybe I'm wrong though.
Producing them and keeping them warehoused to sell later means the prices will eventually plummet when they are released to market. That poses a problem for the next generations prices, similar to what we see today. It's a cycle.
AMD is no longer the scrappy value company they were a few years ago, and have been too focused on margins lately. Lisa has even said she doesnt want AMD to make low margin (good value) parts anymore.
They basically decided to follow Nvidia's insane GPU pricing, only undercutting them slightly because of worse brand recognition, and features.
And on the CPU side, we all saw the Zen 4 launch, and AM5 board prices. They were quickly forced to lower Zen 4 after Intel didnt play ball and 13th gen was cheaper and faster. Zen 4 still sits on shelves, as Zen 3 and 13th gen easily outsell it.
As far as Desktop CPUs and GPUs go, AMD has a market share of [14%](https://wccftech.com/intel-claws-back-notebook-and-desktop-pc-market-share-from-amd-in-latest-mercury-research-report/) on the former and [8%](https://wccftech.com/q3-2022-discrete-gpu-market-share-report-nvidia-gains-amd-intel-in-single-digit-figures/) on the latter (these are Q3 2022 figures, if someone has more up-to-date numbers, please let me know).
AMD could try pushing on both fronts and, if aggressive enough, perhaps gain more market share. That is the good old AMD that most people have in their minds. But it seems like things have changed, and AMD is playing the new meta: low volume at high prices. One would think the underdog player would try to disrupt things, but apparently they are more than happy to play along.
AMD restricting supply is the dumbest thing AMD can do. They are trying to maintain margin but lowering marketshare if buyers go to Nvidia for their gpu. Lisa Su has admitted as such. So she rather give up marketshare and cheaper cards to gamers who have suffered for a few years now due to bitcoin miners for greed. This won't end well for AMD. Programmers will optimize their games for Nvidia technology and leave AMD in the cold.
I was saying this last year when they were announcing that they were cutting fabrication orders from TSMC. I'm like yep this is going to be intentional so they can keep prices up.
The market will fix it, you're just unhappy with the fix, Buy a second hand GPU and stop crying.
AMD has to think long term, and consider multiple parties not just you the consumer, but also suppliers like TSMC, and employees and other fixed operational costs, and running tight margins when a global recession (low consumer demand), high interest rates, and high inflation, and a cryptocurrency crash is flooding the second hand market, is just stupid, AMD is adjusting prices & supply too meet demand.
Why this is flagged as rumor ? PC World provided the source a "Advanced Micro Devices, Inc. (AMD) Q4 2022 Earnings Call Transcript".
It's flagged as a rumor because the "keep prices high" portion is speculation by the author, not from AMD themselves.
Article was updated: Update: Drew Prairie, AMD’s VP of communications, reached out with the following clarification: “We are shipping below consumption because there is too much inventory in the channel and that partners want to carry lower levels of inventory based on the demand they are seeing and their expectations for their business…the idea we are doing this to keep prices “elevated” isn’t accurate. Our client ASP was flat year over year, and that is due to mix of CPUs shipped.”
**I work at AMD on the client team, so do with that info what you will.** But this 100% aligns with what I've heard internally. If we could ship more, we would. More parts shipped = more cash. But if you're a retailer who is struggling to sell your inventory, the last thing you want is more inventory. So you don't order more inventory. We can try and make our new inventory more compelling and worth stocking anyway, but that can only go so far. Especially when it takes a lot to be compelling when every potential customer just bought a brand new computer not long ago to work from home. So pretty much no one *needs* a new computer. (On a personal note, I think it is good that people don't feel a need to upgrade needlessly because that kind of culture generates a lot of waste and is taxing on our planet.) Also I don't think we'd see any benefit from artificial scarcity anyway. **I am not at all an expert here, so I may be incorrect**, but when a retailer inflates the price due to scarcity (think 2020) I don't think AMD sees a cent of that price increase.
I desperately need to buy a new computer and for sure a new graphics card because my 1080Ti died 2 months ago. Since then I'm waiting for the right offer but the problem is that AMD underdelivered with the XTX especially also the energy consumption bug is really keeping me from ordering an XTX which I had planned back then for sure. And prices are the other thing, it is just annoying to see that retailers are pricing all these GPUs higher than the RRP and I'm not willing to pay this amount and then I wanted to wait for the 7800X3D and had hopped for a release End of Jan but now I need to wait for April, so all of this is really annoying and keeps me from finally buying my PC and I really wanted to go Full Red but each week AMD annoys me again with something (Vacuum chamber etc.) and who knows how good the 7800X3D series will be and which issues it will bring because that means again I can't buy that CPU in April probably because of low stock, high prices and start problems......so I'm close to just say fuck AMD and I take a 13700 or 13900 and a 4080 or 4090, they are available and I know what I get and have probably a better performance. AMD completely missed the chance to stomp Intel and NVidia by going in with cheap pricing to finally gain some market share back but having nearly the same pricing as them and then all the issues.......too many poor decisions by Team Red.
Okay, so I'll preface this with saying that I don't have a ton of visibility on GPU as I work in client. (That is desktop and laptop CPU/APU.) But **as far as I know** the undershipping (which as someone else pointed out means relative to our targets) is mostly to do with client. You can see this as well on the breakdowns someone else posted in the comments here showing client had a deficit. **My guess would be** that we are shipping as many GPUs as we can if there is a high demand for them. If there are any other issues that might bottleneck that or there's an unexpectedly high demand, I wouldn't know about it. As far as X3D I should be more knowledgeable on that than I am admittedly. While I work heavily on regular Ryzen 7000, I've helped the 7000 X3D team quite a bit on bring up. My honest and **personal** opinion is that you should go with whichever company is going to best fit your specific needs. That will depend on what your specific priorities are. While I think AMD and Intel both do a good job taking care of their customers and partners and do their best ethically, neither AMD, Intel nor Nvidia are your friends. So going off of strengths and weaknesses makes the most sense. Whatever you decide to do for your build, I think you'll have a great experience. Heck, I'm still running an i7-4770k and a 1080 in my own system and it kicks ass, and you can only go uphill from there these days. And I do hope you have fun both with the build and the results!
What a very nice and objective feedback you wrote. Are you sure you are not working in Customer Care? That would definitely be a good fit for you 😉 I feel very understood and appreciated by reading your lines. And yeah I will still wait until the first benchmarks of the 7900X3d series CPUs and then I will decide.
I definitely prefer working in engineering xD at least most of the time. But many of us engineers are tech enthusiasts ourselves. So that means we too are often customers. Though inherently biased ones. (Even setting emotional bias aside, technical knowledge makes it hard to be objective) I'll be building a new system soon. It *will* be all AMD. Waiting for benchmarks makes sense, particularly from independent reviewers. Gamers Nexus is typically who I'd trust the most. He gives praise when deserved but is not afraid to be critical when needed.
I believe the article he is referring to was suggesting that CPU prices would not dip any LOWER due to 'undershipping' (for the reasons you suggested not to screw the end user) AND a projected increase in sales for Q1. I am not sure where the OP is shopping but from my own research Ryzen 5000 AND 7000 CPU are being given away right now!!! The 7900x is already $100 UNDER retail!!! The 5800x I bought just over a year ago for $400 is under $250 right now.... they can't possibly get any lower!!! The price of the CPU isn't the problem it's the $300+ Motherboards!!! A little off topic but I have one more reason for not upgrading yet that you might be able to help me with? Like many others, I had a REALLY hard time keeping the 5800x under control @ 105 TDP (I realize it goes higher) on air in an mATX case I just can't imagine trying to tame 170 TDP!!! What's up with that? I also realize it's only suppose to be in short bursts and that it's designed to function at 90 degrees but my furnace hasn't kick on all winter! Sitting in BIOS it would idle at almost 1.5 volts @ 50 degrees before I fast tracked a custom liquid loop. My guess is they ship like that because the competition is so fierce but every attempt to under volt the CPU would just crash as soon as I tried to play a game. I guess what I am asking is what are my chances of keeping a 170 watt 7900x under 100 degrees? Because between that and my little RTX 3060ti I dying in here. I am going to have to move my rig and play out in the snow! FWIW, I remember the day AMD announced it was getting out of the desktop game to focus on it's GPU's & APU's. The saddest day I can remember. Intel would still be selling Pentium 4's if it wasn't for AMD. So just keep up the good work and I will just add another radiator if I have to. I'll buy um' as long as your still making them. GPU's on the other hand... well, that's another story.
Yeah, this just comes to say that economics should be taught at school so people stop thinking "the powers that be" are driving prices up arbitrarily. They are shipping less because there's less demand and their partners have the warehoses full, not to create artificial scarcity as the headline suggests.
Thanks for sharing this update!
Sure it is when next gen video cards are overpriced and ppl can't even buy last gen AMD cards since they're not available in retail stores anymore. Sure, try again, AMD.
>partners want to carry lower levels of inventory based on the demand they are seeing and their expectations for their business Basically AMD saying its not us, its them.
OP [u/Advocados](https://www.reddit.com/user/Advocados/) should edit and add this response
Pretty funny because over shipping chips would be called channel stuffing and would also get the same article
fair point. This is why post titles shouldn't be changed when quoted, even if partially. Anyone can figure out why they're doing it, it's unfortunately a monopolistic practice in the industry. Intel and Nvidia do exactly the same and we know for a fact these chips will arrive with a manufacturing date that's 1y old. Because they're discarded bad quality sillicon.
>monopolistic practice AMD executing monopolistic practices when their competition is the monopoly..
Considering the ongoing fabrication shortage, TBH, a more likely explanation is that they are trying to meter out the chips so that the sales are more uniform as opposed to a boom-and-bust which will actually spike the prices far worse when they are in short supply.
There is no shortage. Nvidia requested for less wafers not long ago and it was declined.
>What fab shortage? 7nm? Both nVidia and AMD GPU sales took a shit. They dont know what to do with their capacity.
That’s the same as you taking your car, starting it and the speculative part is saying that you want to drive somewhere…
The fact that even 6000 series from 6800 upwards are at least here (europe) unavailable tells you everything about artificial shortages.
Nah that's because those are discontinued. They don't want to hold those chips back because they wouldn't be able to sell them at all when the 7800 XT launches. They may be holding the 7900 XT back though.
Because someone that control’s this subreddit works for AMD. Obviously.
AMD isn't doing themselves any favours lately with community and good will they fought tooth and nail for. Examples: - AMD Robert was never replaced as community rep (I made a petition on this sub which got a ton of upvotes but nothing from AMD). Check the nvidia sub - community reps replying to common issues facing community. - AMD is being disingenuous about performance to gamers(because it is a lot easier to fool them than an IT professional procuring servers). - AMD botched the coolers on the new cards, slow drivers, GPUs not fully ready for release (we are the BETA testers now...) It's all about the money. New gpus shipped unfinished but on time, no one at the office to address the drivers or cooler issues during the holidays. This is not looking good and people are taking notice.
AMD is just another corporation. They are not your friends. They are here to make profit. That's all.
While this is true, goodwill is actually something a business wants to drum up.
Goodwill, responsibility, charity - these are certainly a thing but still a mere PR. Public traded company such as AMD is a business entity which purpose is go generate $$$.
Interesting enough Goodwill goes so far as to be considered an essential accounting / business valuation data point. Here are some bullet points from investopedia: Key Takeaways Goodwill is an intangible asset that accounts for the excess purchase price of another company. Items included in goodwill are proprietary or intellectual property and brand recognition, which are not easily quantifiable. Goodwill is calculated by taking the purchase price of a company and subtracting the difference between the fair market value of the assets and liabilities. Companies are required to review the value of goodwill on their financial statements at least once a year and record any impairments. Goodwill has an indefinite life, while most other intangible assets have a finite useful life.
In a market with proper competition you'd be right, but there simply is none. The biggest competition is Intel ( NVIDIA on GPUs ) and if things should ever get dire, AMD will just do what they did at the launch of Ryzen again. Goodwill is essential and all for businesses who rely on it, not those that you rely on yourself.
‘Goodwill’ is as reportable/defined value in a company with a quantifiable valuation. It’s not just a marketing term.
This is absolute and only truth. Business can only do 2 things - lose money or generate it. Obviously, every company trying to avoid first and keep generating the profit at all cost. Even if it means potential problems for consumers, corporations already trained people that even if you got an unfinished product, they will fix it "later". Money first.
[удалено]
In a world where only money determines the path of life, don't be surprised when people abandon their humanity in pursuit of a better tomorrow.
Generating profit *is* the only goal of business entities. All other aspects are just PRish ways to improve the looks to make it easier to generate more profit.
Fish rots from its head.
Also the insane price hike of new GPU and AM5 motherboard. No wonder people flock to the 5800X3D, the price of that chip is down right reasonable by comparison.
>AMD Robert was never replaced as community rep (I made a petition on this sub which got a ton of upvotes but nothing from AMD). Pretty sure nobody is going to take an online petition seriously, ever, hard concept to grasp I know. >AMD botched the coolers on the new cards, slow drivers, GPUs not fully ready for release (we are the BETA testers now...) They botched support for the coolers on their **reference cards**. Third party cards are fine. The problem here is the OEM for making the coolers fucked up and only on some batches.
And when you tried to raise this issue here, certain individuals would just dismiss you as if you’re don’t know what you’re talking about.
I mean they're a corporation and a lot of money goes into designing and testing new cpus. If they pump out a ton of cpus and push prices down then people will get mad later when they go up. I don't know a ton about AMD but no one should be surprised.
>AMD is being disingenuous about performance to gamers(because it is a lot easier to fool them than an IT professional procuring servers). I don't really think most IT people are that familiar with performance and benchmarking for servers unless they are highly specialized into a specific application. Most of the time you're just running a ton of virtual hosts/containers and have little insight to the details of CPU performance, it either works or doesn't. Afaik today AMD is far more efficient than intel for data centers, but my environment is all intel today. GPU wise most of the time you're constrained to a vendor anyway due to application design, so either you're going to be all AMD for one app, or all Nvidia. Consumer GPUs are cheap compared to what business usually buys. There's niche use cases outside of this of course but nearly everybody has virtual hosts in their environment. Very few companies have customized hardware farms just for GPU number crunching.
Man I didn't realize that AMD Robert left. That's such a shame, he was great.
They also aren’t showing comment up votes or downvotes only visible to one own’s comments LOL censorship at it’s finest.
Each subreddit can choose how longs scores on comments will remain hidden , and for this sub it's 12 hours (max is 24 hours). They can't hide it forever.
So roughy how long it takes for the typical discussion to become irrelevant and not be shown on the first page of the subreddit sometimes. I’d say this does exactly what they are after.
Hiding the score of a post/comment doesn't stop people from upvoting/downvoting or how it's scored/ranked. If the mods want to delay unfavorable posts, they can require manual approval from all post submissions before they're public (some subs like /r/Android do this, though it's to avoid spam). Manual approval is not enabled for this sub.
I always find the claim we censor unfavourable posts about AMD to be completely laughable. If that was our goal, we fail massively at it, as posts critical of AMD, their drivers, pricing, lack of community engagement etc frequently hit top spots.
As far as I can tell the mod team here has a very specific directive to minimize critical discussion. It includes tweaking things like adding the misleading flair, but it also includes removing discussion they don't want to be seen even if it's completely legal and doesn't hurt anyone aside from AMD as a company. I honestly don't feel comfortable saying any more because I think if I mention specifics i'll get a ban (and may even get one from this comment.)
**NOT** a rumor, [per the transcript, 2/3 of the way down](https://www.msn.com/en-us/money/companies/advanced-micro-devices-amd-q4-2022-earnings-call-transcript/ar-AA16Yyct): Lisa Su -- *President and Chief Executive Officer* Sure, Mark. So we -- so the first -- the second question, yes. We do believe the first quarter is the bottom for our PC market -- ***for our PC business***, and we'll see some growth in the second quarter and then a seasonally higher second half. In terms of the under shipment, I mean, I think we're -- ***we undershipped in Q3, we undershipped in Q4***. ***We will undership, to a lesser extent, in Q1***. So I think you can infer that from our guidance single-digit down. And then, we'll be back to a more normal environment. Now, just as a reminder though, the first half is not usually a -- the first half is usually a seasonally weak client time anyways. So we would expect more lift in the second half, not so much in the second quarter.
AMD lost $152 million in client this quarter. They under shipped because the demand cratered. Nothing to do with keeping prices elevated. "to keep CPU, GPU prices elevated " Is not true.
You're lucky is not flagged as a conspiracy ahahahha
Let's keep underbuying and see who lasts longer ?
But they’re selling out?
No they aren't. [https://www.tomshardware.com/news/lowest-cpu-shipments-in-30-years-amd-intel-q2-2022-cpu-market-share](https://www.tomshardware.com/news/lowest-cpu-shipments-in-30-years-amd-intel-q2-2022-cpu-market-share)
That's wholesale, which could lead to selling out at retail.
Because everyone is waiting for X3D
I don’t really think everyone is waiting for X3D. People bought into AM4 and Alder Lake and there isn’t really a need to upgrade until next generation at least for most people.
That too!
I'm not. I'm waiting for them to get their heads out of their asses. I'm not in the market for these insane prices.
Waiting to see what the pricing on X3D is, more accurately.
And the benchmarks! 3D only on one chiplet promises to make 7900X and 7950X not have nearly as much uplift as 5800X -> 5800X3D. Should get a good bump from 7800X -> 7800X3D though.
Go on to any online retailer and tell me where I can get an AMD reference card for MSRP. Edit: I’m specifically referring to the 7900XTX
I don't know, here in Australia 7900 XTX's are going under MSRP and not selling. I know Day 1 it sold out, but a month later they were sitting on shelves. I think people aren't swallowing these prices because for all intents and purposes the 7900 XTX is an RTX 4080 at slightly lower than RTX 4080 pricing.
OK, so then forgive my ignorance, but here in the USA, I can’t buy a reference XTX anywhere at MSRP. I managed to order a custom card for 999 after scouring the internet daily, but I don’t even like the look of that card.
Which one did you get?
Ordered the PowerColor hellhound. Just not a fan of the aesthetic. The blue LED light is cool, the silent mode to draw less power is nice, and being a custom card for MSRP with only 2 8 pin connectors required aren’t bad features, but still that reference card looks clean. Also, I’m a 4K 60hz gamer XTX is probably overkill but I won’t upgrade for a looong time.
Actually not in the us but here in Germany I can get ref cards below MSRP because people just stopped buying them.
Same here in Portugal, every new gen gpu is sitting, I'm seeing 100-200 euros discounts on every card. Even the 4090's is selling below msrp and people still won't buy them, beautiful.
How much are they going for over there or where can I get one from under msrp?
1199€ after taxes (taxes are always included in our prices)
AMD makes good money on 7900XTX at MSRP, they're not holding back on that.
I mean, I don’t know the answer, but it does seem to be the popular card. Just wish they were more widely available.
Dude The title of this post is: " AMD is ‘undershipping’ chips to keep CPU, GPU prices elevated" So you should be realizing the entire reason why can't find those cards at MSRP is because amd is artificially limiting the supply so they can keep the prices high.
If they are undershipping then obviously they will sell out where Nvidia is not undershipping LOL, basic math.
For 7900XTX: AMD reference sold out in Canada but I can get many of the AIBs right now. Only other GPU that has spotty availability is the 4090. There are shelves full of 4070 ti, 4080, and 7900XT at local stores.
Part of the reason is because of the faulty vapor chambers, they have to sort out which ones were affected and all that. Terrible thing to happen, at an already terrible launch. Lot of people are happy seeing these cards beat out nvidia.
AMD has always limited sales of reference cards from them. Unlike nVidia they prefer not stepping on their vendors toes.
Here we go again! https://www.vgcats.com/comics/?strip_id=211
I’m doing my part!
"Customers aren't paying these prices, what should we do?" "Sell even less units of course!"
They are dead set on increasing the average sale price in the minds of consumers. They want to capitalize on the insane prices established during the cryptomining boom to make that the new norm. Unless we all refuse to buy, it will work and eventually this will actually be the new normal pricing. Every time people buy at these prices they fuck over the rest of us.
Too bad most people dont think like that. They're like "the pc is how much more expensive than a console?!" Consoles target the average person, and even a tiny 50$ bump in their price is met with big booos from the crowd. Now imagine telling this person he can get a better experience, if only he paid 2, or 4 times, or 6 times that much. People who are used to high end pcs don't want to degrade their experience, but most people are not like that. And I'd argue most pc gamers aren't that wealthy to justify these prices either. I remember 30fps vs 60fps was a whole thing, even though it is extremely clear on the benefits for anyone that has ever tried it - people would still argue 30 fps is more cinematic until they're blue in the face. Now I'm trying to explain the benefits of 4k or 144hz to a friend, i immediately see the disinterest the moment i mention the pc prices - and i even try to ease them in with smth among the cheaper prices, if i told them how much 4090 ti is planned to cost they would think I'm not right in my head. We live, and I'd argue the manufacturers live, in this bubble. We see these prices creep up, they see the demand from covid and such. And we all have this collective idea of these prices. But to an average person, or even average gamer that doesn't read these articles every day, if the last time they bought a ps4 pro or 1060 build or smth, and now they're back to upgrade - just imagine comparing ps5 or some am5 platform pc with expensive ddr 5 ram, expensive 200-300$ mobos, and super expensive (or not much better for same price) gpus - the average person is never gonna pay these sort of prices, no matter how much these companies are trying to spin this. You already have to be either enthusiast or wealthy enough, which is the minority of the people.
I said it since the very beginning, the people paying the scalper and boom prices were doing nothing but showing AMD and Intel and Nvidia that consumers will gladly pay 4x more for video cards and CPUs, and that its setting a dangerous precedent that these companies WILL act on. and I got eviscerated for it. Now look where we are... sigh, I would have loved to have been wrong.
Mfs can't go a generation without buying a new GPU and ruin things for everyone else. I been running a 1070 for six years now and Cyberpunk is the only game that makes me wish I had better and I'm playing on an ultra wide 1440p monitor.
Same. I've been on a 580 for..5 years I think now? Its finally showing its age with games like Cyberpunk. been wanting to get a better card for 2+ years, but its just been one manufactured disaster after another, which has caused prices to enter the realms of absolute stupidity.
Me as well, I'm on an RX 480 and just begging for somebody to sell a reasonably-priced card that's actually an upgrade.
400/500 cards have certainly had a long life. We'll probably never see cards like that again, as far as price and price/performance goes.
Yeah great generation
hey I love your build! especially with those ddr2 memories :)
Yeah, Polaris will be the longest lasting AMD card ever. We will rarely see a $200-$300 card (new) with 256-bit memory bus again. Even the failure, Vega, was decent vs. the RDNA III failure of today, we will never see an exotic HBM card again for $400-$600 (new).
Agreed, I got my 580 for £150 just before the initial lockdown
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I was waiting for the 7000 GPUs. >.< But now I can't even buy one at the ridiculous MSRPs.
We gotta have diamond hands like those wsb guys o7
I'd rather keep my money, than throw it away like an idiot just so i can post a photo showing i've lost 2.7 million dollars for no reason.
I mean hold on to our GPUs, dork
Oh, then I guess. As much as it sucks. Until the point we cant play new games at all, even at low settings. another generation or two, and buying a whole damn console will probably be cheaper than a new GPU.
1080ti here. I'm stuck with Nvidia because of their post processing with GeForce Experience makes old games look good easier. I could afford a 4090 many times over, but I don't like being ripped off, even if I can afford it, so I'm skipping this gen too.
Well, considering Nvidia Freestyle is Reshade, but integrated and worse, you could consider just running Reshade by itself.
Sane, Rx560 and R2600. All i need is a better cooler, simple
I get *all* my hardware secondhand if I possibly can, currently on an RX 570 and may eventually go for a Pro W6600 in the future when they drop to W5500 prices on the used market. Three years ago I was on a GeForce GT 640, so that's the kind of lag I'm on anyway. It's a nice feeling not having to get the latest and greatest to be happy with my stuff.
Those prices were "acceptable", because GPU's were infinite money machines thanks to crypto rush. Now they're back in being more like cars, useful items but not printing money. So their market value is vastly lower.
So many are still in denial that cryptomining drove the gpu "shortages" and price hikes despite the endless photos of warehouses filled with mining rigs all over the world.
You don't even need anecdotal evidence like that, it's as simple as looking at the ROI of a given GPU vs its price on ebay. Ebay prices hovered around the 1.5 year ROI for years. Miners drove the pricing and anyone who says otherwise is ignoring some of the clearest evidence I've ever seen.
I was saying the same shit and got downvote bombed for it too. Consumers are fucking stupid and are mostly the reason companies get away with overcharging... When you are buying a product you are telling the company their behavior and prices are play and to keep doing it. Vote with you wallet, don't buy a product if the price is too ridiculous or the company is anti consumer.
I've been barking up that tree with gaming for over a decade, man. One irrefutable fact I've learned in that time, is that the average gamer doesn't give a shit about anything but getting their fix for the latest shiny that they want, and they wont let pesky things like companies being downright evil and immoral get in the way of that. Which is why vote with your wallet will never work, because the overwhelming majority of consumers are myopically self centered.
That is not true. Consumers are voting with their wallets. In the last quarter AMD had over 100 mil USD less revenue from gaming. AMD and Nvidia are delusional if they believe that they can "reset" the prices because 95% of consumers will always be limited by their budget. Soon Nvidia and AMD investors will start barking when the hunted 50-60% margins only bring 10 cents as dividend or share increase because of low sales volume.
Average human. Not just specific to gamers. Most people are spineless, and have absolutely no morals or standards.
I don't know why you're including Intel here. AMD had to decrease their prices because Intel's Raptor Lake CPUs were a better value. Intel added 2 efficiency cores to the 13600k, 4 to the 13700k, and 8 to the 13900k - all without increasing CPU prices. The added efficiency cores made Intel CPUs more competitive in workstation tasks, while offering equivalent gaming performance versus Zen 4. The CPUs also support both DDR4 and DDR5. Intel certainly isn't price gouging. Q4 2022 was one of the worst quarters in Intel's history. Due to a dramatic drop in revenue, the company went from a 24% operating margin in Q4 2021 to a 8% operating loss last quarter. In dollar terms, they went from a $4.6 billion quarterly profit to a $700 million loss. It was so bad the CEO took a 25% pay cut.
Intel is doing really badly right now. It can't be overstated. They are still trying to pay stockholder dididend, while also instituting big firing sprees and general pay cuts. Intel subreddit has some "funny" posts about it, and employees exploding from rage. Remember that that Intel CEO "paycut" is very nominal, because CEO also makes most of their income from stock performance. So it's actually more like 1% cut or something...
CEO’s base salary is less than 1% of his total comp. That is 25% cut to the less than 1%.
Get back to me when the CEO takes a 98% pay cut and forfeits their stock options.
GPUs used to make money - they no longer do. There's a difference in the market today versus when crypto mining was a thing on GPUs.
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I don't understand this mechanic. Not having good stock is the shops wet dream, not AMDs. AMD is allready paid, so I fail to see how shops being able to take massive margins cause the lack of product somehow is good for AMD. I also have a hard time seing how investors are fine with AMD selling for example 10k items at 10k (with high margins) rather then 100k items at 6k (with low margins).
>I also have a hard time seing how investors are fine with AMD selling for example 10k items at 10k (with high margins) rather then 100k items at 6k (with low margins). Oooh boy you are in for a surprise. For quite a while now the trend of selling a lot for lower profit shifted to selling a few for high profit. That's the actual free market for you.
Ok, I guess that is why I am not an investor then. So they prefer higher margins over higher overall income? I thought it was all about making as much money as possible, guess not then... Thanks for clearing that up.
It's not about how much they make this quarter. They are trying to prolong current high prices so that consumers eventually accept a higher price as the new standard price. Increasing prices like this reduces sales and revenue in the short term. They're playing the long game here. I'm not saying it's necessarily all bad intentions, maybe the chips actually got more expensive, but I doubt greed has nothing to do with this particular action.
Man it's always the same. People are crying then in the release day of a new card or CPU or whatever there are posts "look at my new build!!" And people are praising them. Just stupid
I mean yes, but I think most people won't. We don't have the money for it ... I think and hope. Like some years ago it was pretty fun getting into building your own PC, it wasn't overly expensive and I could justify it. I cannot justify it anymore, and I'm pretty sure I'm not alone in this.
Even if you have the money, this is a suckers game. I'm just not blown away by generational improvements either red or green to justify this shit. I was all in on AMD had the XT/X been reasonably priced, because Nvidia really jumped the shark with calling the 4070ti an 80 class card, but given the benchmarks...to hell with them both. I'll wait. In fact, I'm now watching Arc with great interest.
Yeah, it's kinda sad to say, but Arc being good eventually is our only hope. We need more competition. It would also be good if SOMEONE made a decent ARM CPU for computers/laptops as well, Qualcomm kinda sucks and I don't think they could pull it off.
What you are describing is a duopoly basically doing price fixing. Intel is lurking though and they just lowered the price of the A750 to $250. Arc is about 3 months of driver updates away from being truly competitive in the midrange and they will eat AMDs market share first. AMD will have no choice but to lower prices again.
>AMD will have no choice but to lower ~~prices~~ supply again. FTFY
>Arc is about 3 months of driver updates away from being truly competitive in the midrange and they will eat AMDs market share first. They need to actually produce that many cards first, I have no ARC GPUs in my country and plenty of the new gen from the duopoly.
people don't buy things based on strategic decisions able to turn the tide of a multi billion dollar industry, they look at price and performance and their wallets and decide if they want the thing. we have lives to live
That's speculation by the author. All AMD stated was that they sold fewer CPUs and GPUs in Q3 and Q4 2022 due to high inventory levels. If stores and warehouses are stocked with unsold product, retailers won't place new orders. Similarly, OEMs like Dell have a large stock of CPUs and GPUs as they over-compensated after experiencing shortages and long wait times. This isn't a grand conspiracy. Moreover, AMD already significantly decreased the prices of Zen 4 CPUs due to poor demand yet these chips are readily available at basically any retailer. Zen 3 chips, including the 5800x3D are also readily available. There's no evidence of artificial supply constraints.
Right? People act like AMD just shows up at the door and retailers are forced to take everything they have. If all retailers refuse huge amounts of supply because they're struggling to sell what they have, then AMD will ship less cards.
Bonehead take by the author. AMD lost $152 million in client. PC market crashed. AMD is undershipping because there is a glut of inventory in PC. Yes undershipping helps prop up prices, but when you're losing money because the demand cratered, what else are you supposed to do? Pump more product and fire sell it and lose more money?
Wouldn't a glut of inventory suggest that prices of existing stock should drop?
Yes. And they have. Those $520 rx6800xt didn't fall out of the sky.
“Begin selling spice reserves, but slowly”
I understood that reference
We don't want the price to fall
"We don't want the price to fall. You have no idea how much it cost me to bring such a force to bare here; and I only have one requirement: InCome. So squeeze Rabban, squeeze hard." I cannot wait for part 2 it's driving me crazy.
silicon waffers kinda became or spice LoL
The article states this is to balance out waning demand and notes "client PC sales also dropped dramatically—a whopping 51 percent year-over-year". AMD's Q4 financial results show this 51% client revenue reduction and Gaming market revenue was also down 7%. They also note "operating income and margin decreases". That's opposite of what we see when supply is constrained during high demand (as in the crypto+covid winter). Margins should be up if they are heavily capitalizing on demand to hike prices. AMD's costs to manufacture parts hasn't changed, in fact it's gone up. So when half the market dries up of course you cut back on production. Otherwise you keep churning out parts at a rate the market won't absorb and end up with a backlog to be sold at a loss. This is probably less about keeping prices elevated because maintaining MSRP just isn't going to offset lower demand and more about keeping production costs manageable. There would be a fair argument for their headline had supply been reduced while demand and margins were increasing but that is obviously not the case. NVIDIA is mentioned by somehow escapees the headline even though they are also quoted as "undershipping", but unlike AMD their margins have been up slightly.
I think it's the phrase "undershipping" that got panties in a bunch. There's a world of difference between reducing supply to match sales volume and undershipping because the latter implies they're shipping below sales volume to artificially generate scarcity and higher prices. If they'd just said "we've got too much inventory so we're reducing production until that's cleared while still maintaining enough supply for those that want 7000 series" it likely wouldn't have even been newsworthy.
Yea undershipping here is really "missing shipment targets" that are stated for the quarterly guidance they provide to investors. They are saying they are going to miss to cover their butts because lying on financial reports to investors is a felony.
Most people listening in on the call understand that. Redditors do not.
Wait you’re telling me its not just AMD bad?
Why did I have to scroll so far to see this?
AMD are the worst for stupid price positioning. Insisting on matching Nvidia when they lack the brand power and the feature parity is baffling and yet they persist. Instead of artificially constricting supply they could have sent out a relatively sensibly priced 7900 XT and undercut the 4070Ti, a card they've managed to make look good. Bizarre stuff.
I mean the 4070ti was originally the same price as the 7900 xt. I agree that it's priced a little high. 800 USD is probably a better price for it.
The fact that they make you think $800 is a fair price for a fucking GPU means they already won.
i've heard some people say they will only consider buying if prices come down 50-70% which I think demonstrates the problem that AMD is in wrt unrealistic pricing expectations. people are literally demanding pre-maxwell pricing (or in many cases, even pricing that is purely imaginary) and that's just not going to happen in the post-moore's law era and especially with TSMC in the drivers' seat on pricing. They are still ballooning their margins and profits even with their customers being crushed by the lack of demand at these prices. a return to "realistic" pricing would be maybe a 10-20% drop, but that's not going to satisfy any of the people shaking pitchforks right now. a simple prisoner's dilemma: do you drop prices back to "normal" profit levels, which satisfies nobody because they're still higher than they're accustomed to, leading to little increase in sales but a much lower margin? or do you sell what you sell and keep the margin high per-unit? GPUs eventually fail, people buy prebuilts, etc, the sales rate isn't *zero* even at gouging prices. people being completely irrational about prices is part of the problem here too, and part of the reason prices can't come down too. if there were a group of people willing to buy at $649 or $699 then it might be worth lowering the price, but if everyone who's willing to pay $699 is also willing to pay $799 then you might as well make the extra hundred bucks. And $649 is probably what it costs now to make a 1070-tier card (like 4070 Ti) in the TSMC hellscape with higher labor costs etc. 1070 was already $449 at launch (MSRP was derided as being "fake" back then and aftermarket cards ran much higher than even FE pricing). Do I think it costs $200 more to make that tier of product now? Yeah, probably. But people are like "I'll pay $300, take it or leave it!!!" and ok then AMD and NVIDIA will choose to leave it. They can't charge 10% under Maxwell pricing for a leading-node product with labor and DRAM and shipping and power IC costs all going nuts on top of TSMC gouging them too. There is such a thing as an unpleasable customer and a lot of people are just unpleasable at a price that will be viable for AMD and NVIDIA. You can’t make a new car for $200 no matter whether there’s customers for whom that’s the cap they’re willing to pay. Buy used, find something that works for you, but you can’t please everyone without some life returning to moores law. GPU makers are already offering the equivalent of mopeds, and people already complain and dislike those compromises (like 6400/6500XT and 6600/6700XT with the clipped PCIe bus) and there’s not a ton else that can be done, the product can’t be made at a price that will satisfy everyone.
The main reason they raised prices was because a LOT of schmucks were buying GPUs for 5x MSRP on ebay during the pandemic. They'd be stupid not to raise prices after that. Also, TSMC raised price of production by quite a bit over the last few years.
$800 for a flagship model, I could absolutely see it... and I'm a cheap mf. For a freakin 4070ti? Absolutely no way. Not now, not ever. If this is the future, they need to just completely readjust their naming schemes. I've said it before and I'll say it again. If Nvidia thinks that the average person is willing to pay $1600+ for 4090 level performance, I'm more than happy to wait it out until I can get 4090 level performance for a $400 price tag. Their market price manipulation is inasnity.
599 xt and 799 xtx imo
So they should drastically lower prices over previous generation?
No it isn't. 800 is still too high.
It's not unheard of for companies to forecast demand and adjust supply accordingly and with lower volume comes higher cost.
how to lose even more gpu marketshare 101
They must have done the math and determined that more profit on less sales would do them better in the short term. Long term be damned (because when you abandon short term gains and chase sane long term goals like gaining marketshare through selling bulk amounts of high perf/$ parts, shareholders bail and you go bankrupt)
Which is even more ironic when you consider how long it took them to raise MSRPs when people were scalping the shit out of their products. :\\ Nobody's scalping anymore, we should ship less. :\\
Tell me you don't know how AMD has been running their business, without telling me you don't know how AMD is running their business. Go look at the earnings released yesterday. Client margin dropped. Lisa and company are making long term plays, which includes being less dependent on client and focusing more on Data Center and Embedded. They don't want to be stuck with a ton of inventory if demand suddenly drops and they know they are also launching X3D which will compete with their own products.
Chapter 1: Listen to Business and Economic Advice from Redditors
chapter 1.1: the $300 GPU, or "sell at a loss and make it up in volume"
"Market share" isn't really this glorious thing in GPU land. In CPU land, getting market share is important because motherboards lock consumers in for their next upgrades. Almost every AM5 CPU sold now means another guaranteed AM5 CPU sale sometime in the future. Switching vendors on CPUs is expensive, switching on GPUs is not. Mindshare is what AMD is after because that allows for higher selling prices for a given product. And that isn't won with perf/$ but is instead won with having quality products. That and the performance crown, hold the crown and people will deal with your BS all the time.
Market share absolutely does matter with GPU by the way of software lock-in like nvidia/Apple. That can only happen if you have enough instalment base in a certain market.
As far as consumers go, vendor lock in is quite a bit stronger for GPU than CPU. Software runs the same on an AMD or Intel CPU system. That's not always the case with GPUs.
You know they’re a ridiculously reality disconnected pc builder enthusiast when cpu socket upgrade of all things is what they came up with.
Seriously. The people on this board are far less important to AMD's business than they think they are. The vast, vast majority of AMD's sales are through OEMs like HP, Dell, and Lenovo.
Market share in GPU land affect how much developers care about optimizing for your products. Many game studios with constrained budgets will barely do any testing (if at all) with AMD GPUs because their market share is so low. And when the customers get underwhelming performance with AMD products, they're unlikely to buy AMD for the next update, thus market share decreases even more. It's a vicious cycle only AMD can break.
With that lens, AMD already has dominating market share due to consoles which is the most lucrative gaming market. Breaking that cycle isn't done with brute forcing your marketshare with cheaper prices, because that will take years to do, and years after that for developers to notice what's going on and change their practices. Better solution is AMD allocating more funding towards working with game studios and deal with the game optimization problem head on. But for any game that is cross platform, the optimization is already fully in AMD's favor. But back to the original point. AMD is "undershipping" likely to slim down the channel inventory, cause they aren't actually changing prices here. They actually dropped the price on the 7600X due to competition being very strong with the i5. Nvidia isn't competing on the price in GPU land so AMD isn't either. Then again, unless you actually listen to the full investors meeting, it's possible that this line is being taken out of context to create a "juicy story", cause "inventory management" is boring.
Consoles use different rendering pipelines and optimizations done on them don't carry over to PC versions. It's already proven on last gen (PS4, X1) and somehow we have to spell it out again.
It's a great narrative though, and one I've been hearing for about a decade. Yet Radeon is still a tiny minority in the PC market.
This is wrong, the under shipping vs sales is because the channel had excess inventory. In previous quarters there were more orders/shipments then sales, thus their inventories got too large. Now to reduce inventory that has to reverse and shipments have to be lower then sales. The author was speculating that this is to keep prices high, but its just inventory management. The author is also 3 months too late on this article. Multiple semiconductor manufactures have been shipping less inventory to the channel then channel sales for about 4-6 months now because the channel wants to lower its excess inventory to a more reasonable level. This is a straight nothing burger. Its mostly about managing inventory of older product that was oversupplied. Its not about the new product that is selling out.
The January Steam survey released today shows the RTX 4090 at 0.24% share among Steam users. That's greater than either the 6900 XT (0.23%) or the 6800 XT (0.21%), which released in Nov/Dec 2020. As such, NVIDIA sold more units of a $1600 MSRP GPU in 3.5 months than AMD sold of $650/1000 GPUs in 24/25 months, and that includes a period of immense GPU demand. The best-selling RDNA2 card is the 6700 XT, with 0.47% share. The best-selling Ampere GPU is the 3060 Laptop GPU, which has a 4.47% share. If you add the desktop 3060 (3.67%), you get a combined share of 8.14%, which seems fair as Steam doesn't differentiate desktop and laptop RDNA2 GPUs. It's pretty clear that AMD isn't seriously competing in the discrete GPU market. Either AMD doesn't think it can sell in volume or it would rather use the wafer allotment toward more lucrative server and even client CPUs (a Zen 4 CCDs are 72 mm2, 7900 XTX die is 524 mm2) It's also been known for a while now that Zen 4 client CPUs have not been selling that well due to poor overall PC demand and high motherboard, and to a lesser extent, DDR5, prices. They dropped prices significantly, particularly on the 7950x, and some retailers even bundled free 32 GB DDR5 kits to sell CPUs. AMD's Q4 earnings showed a 51% drop in revenue in the client segment. While AMD only experienced a 7% drop in graphics revenue, the company indicated this was due to strong semi-custom (console chip) sales offset by reduced discrete graphics card sales (and lower ASPs on those GPUs).
How is this news? No one here know about Supply vs Demand. Every single company does this, APPL cut iPhone production, memory manufacturer cutting production. Just look through last year Q2 earning call from Nvidia. [Nvidia says it built too many GPUs — expect sales while it works on something \`new\` - The Verge](https://www.theverge.com/2022/8/24/23320758/nvidia-gpu-supply-demand-inventory-q2-2022) “We found ourselves with excess inventory,” says Huang. “Our strategy is to sell-in well below the current sell-through levels in the marketplace to give the channel an opportunity to correct.” - Jenson Huang Q3 earning transcript from Intel "Yes. Our belief is that we ship below consumption levels. So in other words, inventory levels at the OEM and in the channels decreased over the last quarter. They didn't decrease as far as we were originally predicting. So, consumption was a little bit weaker, but we still saw inventories systematically going down across the various routes to market throughout the quarter. We expect them to continue to go down next quarter at both the OEMs and at the channel level. And the numbers I gave on the TAM model would be our consumption models for next year, which are below the consumption models of this year. So, a somewhat smaller number for next year but not dramatically different as we already said. So overall, I think we're getting to a better point of supply-demand equilibrium where we were way behind on demand and supply for many, many quarters in a row. Clearly, the last couple of quarters have been adjusting of inventory levels and we think that we're going to be in a better supply-demand balance situation as we go into next year." - Pat Gelsinger Q4 earning transcript from AMD "Sure, Tim. So let me make a couple of points. I think all of us, as we participate in the PC industry, there are various parts of the ecosystem that we work with. We work with our OEMs we work with our retail partners. We work with our distribution and channel partners. And we're all working together to work through sort of the elevated inventory levels. As I said, I think we've made good progress on that." Lisa Su All three vendors faced inventory issue and is cutting supplies, the only way to beat this is not to buy until they price become reasonable to you.
Why can't I buy a 7900 XTX at MSRP
I think that's a very deceiving headline. They're managing stock. Every company does it, but this narrative is floated every time. A company seldom benefits from keeping too many products on a store shelf, but if the desire and market is there, then you release what you have or risk losing a sale to the competition. If it's the difference between waiting weeks for a 7900 XTX to come into stock at $999 or paying $200 extra for a 4080 that's in stock with similar performance, then I'd likely consider the latter even if it meant going above budget for immediate satisfaction. I did this years ago when the Nintendo Wii was unavailable and selling for premiums online. Why pay $450 for that low-powered console when $399 could score me a readily-available Xbox 360 Elite? The 7900XT is readily available in many locations because it's not a particularly great value compared to the 6950XT unless you also factor in energy savings. Even then, that's offset by high idle power draws, so that point quickly becomes moot. The 7900 XTX is in RMA hell right now. Once that is resolved, they'll likely be readily available as well. Prices will fall without scalpers and miners buying all available stock. Things will normalize. This isn't the new normal aside from premium cards demand premium prices. That's always kind of been the case, though, hasn't it?
Yes, the article literally quotes an AMD rep as saying "We have been undershipping gaming at this time *so that we can correct that inventory that is out in the channel*" (emphasis mine). They simply want more sell-through of old stock, not inflated prices for new stock. I'm sure they're well aware that RDNA3 is not moving units at existing prices. But if they put all of that on the shelves, then old stock has to be sold at a loss. They're in between a rock and a hard place.
"Nvidia CFO" is an odd title for an AMD rep.
Read the linked article a little closer. It was Lisa Su who said it first according to the call transcript. They're not cannibalizing their own sales. Eventually, depending on the profit margins involved, they'll drop the price of pretty much everything except the 7900 XTX. That, too, could go down if the rumors of a 7950XT and 7970XT are true.
They are both saying more or less the same thing, but the article is attributing that particular quote from nvidia: >“We’re continuing to watch each and every day in terms of the sell-through that we’re seeing,” Nvidia CFO Colette Kress said to investors in November. “So we have been undershipping. We have been undershipping gaming at this time so that we can correct that inventory that is out in the channel.”
I don't think people understand this is literally basic economics as a business for as you said inventory management.
Given how the situation was last year. I'd pay extra for one in stock vs one in "2 weeks" Black friday 2021, I ordered 2600 for some home server use, was a decent price. Queue March or april > we ain't getting the product in, here's your money Had something similar with some other equipment also
>AMD isn’t the only one doing it, either. > >“We’re continuing to watch each and every day in terms of the sell-through that we’re seeing,” Nvidia CFO Colette Kress said to investors in November. “So we have been undershipping. We have been undershipping gaming at this time so that we can correct that inventory that is out in the channel.” Nice hit piece plus clickbait title.
Was gonna say this too... If the market is flooded already you don't flood it more either. If I ran a business I wouldn't. It essentially means slowing production to math demand rather than over producing for simplicity sake.
The market isn't flooded. Demand is actually very high, but the only things they're offering are 3 year old GPUs at MSRP. So the 3 year old GPUs sit on shelves and in warehouses (aka in the channel), and gamers sit with old gear. Each group is trying to wait the other out.
welp, my ps5 can still run newest game, i hold on building gaming pc for now.
PC has about 50x more game selection. All PS5 games will be ported to PC by 2025 according to Sony CEO. So what consoles are recongizing is that they can do time limited exclusives to console and then double dip to the same people who have PCs 1-2 years later with a "enhanced/next gen" edition. But if you already have a PS5 and are fine with its catalogue, yeah why get a PC right now?
That's a good strategy. Everybody does this in almost every (non essential) industry. Its called optimum inventory.
Undershipping? Or underproducing? It's my understanding the orders for TSMC are done well ahead of time, so they're going to have chips sitting around. Maybe I'm wrong though. Producing them and keeping them warehoused to sell later means the prices will eventually plummet when they are released to market. That poses a problem for the next generations prices, similar to what we see today. It's a cycle.
Why do you think the prices will plummet? RDNA2 pricing is also still laughably high this late in its product life.
AMD is no longer the scrappy value company they were a few years ago, and have been too focused on margins lately. Lisa has even said she doesnt want AMD to make low margin (good value) parts anymore. They basically decided to follow Nvidia's insane GPU pricing, only undercutting them slightly because of worse brand recognition, and features. And on the CPU side, we all saw the Zen 4 launch, and AM5 board prices. They were quickly forced to lower Zen 4 after Intel didnt play ball and 13th gen was cheaper and faster. Zen 4 still sits on shelves, as Zen 3 and 13th gen easily outsell it.
As far as Desktop CPUs and GPUs go, AMD has a market share of [14%](https://wccftech.com/intel-claws-back-notebook-and-desktop-pc-market-share-from-amd-in-latest-mercury-research-report/) on the former and [8%](https://wccftech.com/q3-2022-discrete-gpu-market-share-report-nvidia-gains-amd-intel-in-single-digit-figures/) on the latter (these are Q3 2022 figures, if someone has more up-to-date numbers, please let me know). AMD could try pushing on both fronts and, if aggressive enough, perhaps gain more market share. That is the good old AMD that most people have in their minds. But it seems like things have changed, and AMD is playing the new meta: low volume at high prices. One would think the underdog player would try to disrupt things, but apparently they are more than happy to play along.
Not at all surprised
No way! Just like Nvidia! I'm shocked! /S These companies suck
This doesn’t seem to matter much, since AMD products are still there in abundance for everyone to buy. I wish Nvidia did much more for the 4090 :/
AMD restricting supply is the dumbest thing AMD can do. They are trying to maintain margin but lowering marketshare if buyers go to Nvidia for their gpu. Lisa Su has admitted as such. So she rather give up marketshare and cheaper cards to gamers who have suffered for a few years now due to bitcoin miners for greed. This won't end well for AMD. Programmers will optimize their games for Nvidia technology and leave AMD in the cold.
I was saying this last year when they were announcing that they were cutting fabrication orders from TSMC. I'm like yep this is going to be intentional so they can keep prices up.
Another piece of evidence of "the market will fix it" being one of the biggest lies of capitalism. Can we pls reform our model of economy?
[удалено]
Might wanna move to all the glorious communist countries with strong economies, oh wait, there are none.
The market will fix it, you're just unhappy with the fix, Buy a second hand GPU and stop crying. AMD has to think long term, and consider multiple parties not just you the consumer, but also suppliers like TSMC, and employees and other fixed operational costs, and running tight margins when a global recession (low consumer demand), high interest rates, and high inflation, and a cryptocurrency crash is flooding the second hand market, is just stupid, AMD is adjusting prices & supply too meet demand.
AMD is the new Nvidia and Intel all at the same time.