Friday, February 26th 2021
NVIDIA Earned $5 Billion During a GPU "Shortage" Quarter and Expects to Do it Again in the Next One
NVIDIA's recently published Q4-2020 + Fiscal Year 2021 results show that the alleged "GPU shortage" has had no bearing on the company's financials, with the company raking in $5 billion in revenue, in the quarter ending on January 31, 2021. In its outlook for the following quarter (Q1 FY 2022), the company expects to make another $5.30 billion (± 2%). To its credit, NVIDIA has been maintaining that the shortage of graphics cards in the retail market are a result of demand vastly outstripping supply; than a problem with the supply in and of itself (such as yields of the new 8 nm "Ampere" GPUs). The numbers show that NVIDIA's output of GPUs is fairly normal, and the problem lies with the retail supply-chain.
Crypto-currency mining and scalping are the two biggest problems affecting the availability of graphics cards in the retail market. Surging prices of crypto-currencies, coupled with the latest generation "Ampere" and RDNA2 graphics architectures having sufficient performance/Watt to mine crypto-currencies at viable scale, mean that crypto-miners are able to pick up inventory of graphics cards at wholesale; with very little making it down to retailers. Scalping is another major factor. Those with sophisticated online shopping tools are able to buy large quantities of graphics cards the moment they're available online, so they could re-sell or auction them at highly marked up prices, for profit. NVIDIA started to address the problem of miners by introducing measures that make their upcoming graphics cards artificially slower at mining, affecting the economics of using GPUs; while the problem of scalping remains at large.
Source:
The Verge
Crypto-currency mining and scalping are the two biggest problems affecting the availability of graphics cards in the retail market. Surging prices of crypto-currencies, coupled with the latest generation "Ampere" and RDNA2 graphics architectures having sufficient performance/Watt to mine crypto-currencies at viable scale, mean that crypto-miners are able to pick up inventory of graphics cards at wholesale; with very little making it down to retailers. Scalping is another major factor. Those with sophisticated online shopping tools are able to buy large quantities of graphics cards the moment they're available online, so they could re-sell or auction them at highly marked up prices, for profit. NVIDIA started to address the problem of miners by introducing measures that make their upcoming graphics cards artificially slower at mining, affecting the economics of using GPUs; while the problem of scalping remains at large.
49 Comments on NVIDIA Earned $5 Billion During a GPU "Shortage" Quarter and Expects to Do it Again in the Next One
I don't see how the cards being good at mining mean that miners are able to get inventory before it hits retailers. Nvidia and AMD selling huge shipments directly to miners, however, would be a good reason why retailers aren't getting any...
NV sells for profit and it doesnt matter who is going to buy the cards. What matters is how many will be sold. Miners buy in bulk all they can and never complain about drivers.
Gamers buy 1 card in general and complain about everything. (mostly drivers)
People who think that gaming is the largest market are blind. NV doesn't care about gamers but how many product they sell. Hopefully everything and nothing will be left, maximizing profit.
Although it will not be soon enough, and i bet prices get bumped too.
And it's really a WIN-WIN situation for them. If mining flops, and it will eventually (this is when that "next month things will get better" promise will come true after arduous efforts from their part), it's not like you're not going to buy GPUs anymore. You're already addicted and addicts need their fix. You are being lied to, and you know you are being lied to, but you're not going to ever do anything about it, other than complain in a forum somewhere, while lying to yourself that some of the liars are better then some of the other liars, because allegiance to companies that don't give a s#1t about you is doing wonders to your mental health.
"Stuff" flows like water, taking the path of least resistance. Less friction means more money. There's no shortage of anything, it's just a redistribution of goods and services.
Unbelievable - used to be 20, but I guess they weren't serious about their optimizations and their marketing. :wtf:
Not to mention graphics cards makers for example selling 3060 for $500 which if it wasn't for the shortage would have been $330 card you do simple math it's 50% more but their profit doesn't go 50%.
Example if it cost them $270 to make the card the profit would be $60 when selling for $330 but if you sell for $500 the profit is actually now $230.
So their profit went from $60 to $230 so that's almost 400% increase in profit basically selling one card like selling four cards in normal times.
So I don't see any reason for either AMD and NVIDIA go into price war anytime soon.
*Yes nVidia sells FE cards, but it doesn't seem those are getting into the hands of miners.
Gigabyte finally found suckers to buy large quantities good for them, sure weren't on my radar.
In a few months, I'm sure the various coins will crash again and these GPUs will be available cheap off of ebay.
Technically, there is a shortage whenever demand is higher than supply. Don't we have enough evidence to conclude this decisively?While it's certainly unfortunate that a portion of GPUs are wasted on pointless mining, especially when there is a shortage in the first place.
And while miners are buying thousands of GPUs, I have yet to see any evidence suggesting they are buying the majority (millions).
More correctly, mining is a contributing factor to the shortage, while the main factor is a steady increase in demand over the past years, further accelerated by extreme demand under Covid-19. So let's not blame everything on those pesky miners. :)
Availability was a large problem before this mining boom, and this mining boom will probably soon be over, but the shortages will probably linger for a while…Who is making a 60% profit margin?
BTW, the profits of overpriced cards go to retailers and possibly wholesalers, not Nvidia and AMD.There is nothing bad about making profits by itself. But neither AMD nor Nvidia is benefiting from overpriced cards, those profits accumulate further down the chain.Sure, but are there any evidence of this happening at scale?
I know there are some claims about Zotac doing it.