Friday, July 1st 2022
NVIDIA to Cut Down TSMC 5nm Orders with the Crypto Gravy Train Derailed, AMD Could Benefit
NVIDIA is reportedly looking to reduce orders for 5 nm wafers from TSMC as it anticipates a significant drop in demand from both gamers and crypto-currency miners. Miners are flooding the market with used GeForce RTX 30-series graphics cards, which gamers are all too happy to buy, affecting NVIDIA's sales to both segments of the market. Before the crypto-currency crash of Q1-2022, NVIDIA had projected good sales of its next-generation GeForce GPUs, and prospectively placed orders for a large allocation of 5 nm wafers from TSMC. The company had switched back over to TSMC from Samsung, which makes 8 nm GPUs from the RTX 30-series.
With NVIDIA changing its mind on 5 nm orders, it is at the mercy of TSMC, which has made those allocations (and now faces a loss). It's incumbent on NVIDIA to find a replacement customer for the 5 nm volumes it wants to back out from. Chiakokhua (aka Retired Engineer), interpreted a DigiTimes article originally written in Chinese, which says that NVIDIA has made pre-payments to TSMC for its 5 nm allocation, and now wants to withdraw from some of it. TSMC is unwilling to budge—it could at best hold off shipments by a quarter to Q1-2023, allowing NVIDIA to get the market to digest inventory of 8 nm GPUs; and NVIDIA is responsible for finding replacement customers for the cancelled allocation.
The same article paints a different picture for AMD: the company has reduced orders for 7 nm and 6 nm nodes; but its 5 nm orders are unaffected. AMD makes not its its next-generation RDNA3 GPUs on 5 nm, but also its next-generation "Zen 4" CPU chiplets. Any drop in demand for GPU silicon would be internally adjusted by increasing "Zen 4" chiplet orders. AMD's growth as a processor manufacturer is no longer bottlenecked by technology-leadership, but by volumes. The company could jump at the prospect of higher 5 nm allocation, as it would enable it to increase output of "Zen 4" processors to meet rising demand of high-margin server processors with its upcoming EPYC "Genoa" and "Bergamo" processors.
Source:
Chiakokhua (Twitter)
With NVIDIA changing its mind on 5 nm orders, it is at the mercy of TSMC, which has made those allocations (and now faces a loss). It's incumbent on NVIDIA to find a replacement customer for the 5 nm volumes it wants to back out from. Chiakokhua (aka Retired Engineer), interpreted a DigiTimes article originally written in Chinese, which says that NVIDIA has made pre-payments to TSMC for its 5 nm allocation, and now wants to withdraw from some of it. TSMC is unwilling to budge—it could at best hold off shipments by a quarter to Q1-2023, allowing NVIDIA to get the market to digest inventory of 8 nm GPUs; and NVIDIA is responsible for finding replacement customers for the cancelled allocation.
85 Comments on NVIDIA to Cut Down TSMC 5nm Orders with the Crypto Gravy Train Derailed, AMD Could Benefit
But I don't think they will correct for the consumer. I think we will see a largest price increase in history, coupled with a scarcity - which will be of course explained as disrupted channels, lack of workforce, but will simply be increasing profit in this worthless market without cryptobuyers.
And the market will simply wait for the next cryptowave. We gamers are insignificant now.
Freighter prices gone from 500~$ to 10000$ (and down to 8000~$ now)
ihsmarkit.com/research-analysis/shipping-market-outlook-container-vs-dry-bulk-q2-2022-update.html#:~:text=Currently,%20we%20assume%20container%20freight,the%20same%20period%20last%20year.
Also, a necessary correction is our own perspective on how much we should need or want. We've lived lives of filthy excess, in the West. That needs correcting too ;)
The world has become a worse place on an individual level, too, living is more expensive which isn't reflected in wages, PCs have become a luxury, so prices will have to come down to maintain sales.
I don't think prices will ever be at 2016 levels because we're in a different economy than we were back then, but they have to equalise in a way. If AMD and Nvidia sold entry-level GPUs for $800 a piece, and top-end ones for $4,000, no one would buy them, and they'd go bankrupt.
Find 'em
feel 'em
f*ck 'em
fo'get 'em
heheheh :D