Thursday, February 2nd 2023

AMD Restrained CPU and GPU Sales in 2H-2022 to Avoid Unsold Inventory

by
btarunr
 Discuss (200 Comments)
AMD in its Q4-2022 earnings release call disclosed to investors that it "undershipped" chips in the second half of 2022 to keep prices (margins) high and save itself from unsold inventory, in the wake of a steep slump in the PC market. "We undershipped in Q3, we undershipped in Q4," AMD CEO Dr Lisa Su told investors. "We will undership, to a lesser extent, in Q1 [sic]," she added.

Major chipmakers are experiencing an unprecedented slump in demand compared to the spike in demand during the COVID 19 pandemic lockdowns. With high energy prices and the ebb in the pandemic causing much of the white-collar workforce to return to office, there's no longer the kind of demand the PC industry saw in 2021. On the other hand, undersupplies artificially hold prices high, with graphics cards and desktop processors still being unreasonably pricey compared to previous generations. AMD calculated that it would rather make less revenues on fewer chips shipped, than end up with a bloated unsold inventory that it would have to sell at a thin margins, or even at a loss. The company on Tuesday beat expectations to report good Q4-2022 results, which received a thumbs-up from investors.
Source: TechSpot

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200 Comments on AMD Restrained CPU and GPU Sales in 2H-2022 to Avoid Unsold Inventory

#26
Dirt Chip
Space Lynxthen AMD should have charged more in the old days, they could have, but they chose not to, they knew they were the budget king. and I respected them for that.

so I disagree with your statement.
All is calculated moves as they wasn't on the upper hand compere to the compatition.
They play the "we are the budget, robin hood, option" until they get even and above Intel and then immediately ZEN 3 price happened.

Maybe you reffing to something older, GPU oriented but as far as I recall NV was the top dog going back all the way to HD7950GHz edition.
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#27
usiname
Space Lynxperhaps the government of my country USA
Now that explain everything :roll:
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#28
Space Lynx
Astronaut
Dirt ChipAll is calculated moves as they wasn't on the upper hand compere to the compatition.
They play the "we are the budget, robin hood, option" until they get even and above Intel and then immediately ZEN 3 price happened.

Maybe you reffing to something older, GPU oriented but as far as I recall NV was the top dog going back all the way to HD7950GHz edition.
yeah like late 90's early 2000's is what I am referring to. golden age of gaming, they were the best days. companies are nearsighted now, and their short term focus is going to collapse all of them eventually. except for Intel, which the USA government is propping up for security reasons.
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#29
user556
I believe Intel did the same. They worded it differently, saying their supply rate was lower than channel sales rate.

Both companies are now cutting prices on their consumer CPUs.
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#31
Space Lynx
Astronaut
user556I believe Intel did the same. They worded it differently, saying their supply rate was lower than channel sales rate.

Both companies are now cutting prices on their consumer CPUs.
yeah, but the key here is that there was and is enough supply of 4070 ti and 4080 for anyone who wants it, while AMD is actively making sure there is no supply of XTX and XT 7000 series.

so eh...
Scrizzgood times
just looked at your system specs. you have my dream setup. fuckin nice. :toast:
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#32
user556
Like I said, Intel is doing the same. In fact I just noticed they're not backing off yet either ....
The supply rate into the PC market by Intel was 10 percent below the consumption rate for all of 2022, according to Gelsinger, and it was quite a bit larger in Q4 and will be even higher in the first quarter. In fact, Gelsinger leveled with Wall Street and said the sell in rate into the channel for Q1 2023 for PC chips would be half the consumption rate – that’s how much the channel is choking on what it already has.
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#33
ExcuseMeWtf
Space Lynxwhy not? AMD provided me with affordable memories as a child and teen. so I was happy to be loyal to them. until today. now my money goes to Intel and Nvidia. so good luck to their shareholders, lot of people like me who will now be eyeing Intel and Nvidia moving forward. ;) because there is no good guy anymore, AMD used to be, but not anymore. and since it is now an even playing field, I'd rather go Nvidia, at least with Nvidia I won't be drawing 90 watts while I watch youtube as I would with a 7900 XTX LOL - I was willing to overlook that initially, cause of the memories AMD afforded me growing up when I couldn't afford Intel and Nvidia.

Not anymore, even playing field, have fun AMD! My money is going elsewhere now since all the companies are the same for once.
They only did that because it lined their pockets best. If they could've earned more being predatory, they'd do that instead.
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#34
remekra
They simply learned from last crypto crash, both nvidia and AMD. Why would they produce a large volume of GPUs at lower prices when you both still had some stock of old gen ones and more importantly used market is full with used GPUs at lower prices. If they would make their 79xx/40xx cards cheaper and make more of them then people would still go and buy used last gens cards as they would also get cheaper, and they would be left with inventory of cards that still not that many people would buy.

When used market and last gen stock will go down, then they can lower the prices and ramp up production a little more, or make a refresh.
These are corpos, business oriented ones. They will only appear friendly to you if they have something to gain.
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#35
Redwoodz
Space Lynxthey sure did spend a lot of advertising pretending to be the gamers friend this past decade. a good reminder indeed! :toast:
Just like Intel and Nvidia has been spending an increasing amount of money to spread dissention in tech sites, again. Been pretty obvious lately, leading up to the yearly financial reports.

;)
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#36
Fluffmeister
Space LynxI'm the First Astronaut of the site baby, that's all you need to know, I am going to outer space :love:
In space, no one can hear you scream "AMD market manipulation".
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#37
Vya Domus
How exactly do you increase your margins by shipping less products ?
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#38
BSim500
Space Lynxthen AMD should have charged more in the old days, they could have, but they chose not to, they knew they were the budget king. and I respected them for that.
They didn't really "choose" not to out of generosity. Remember the launch price for the FX-9590? ("For about a year, from mid-2013 to mid-2014, AMD's FX-9590 processor was priced at or close to $1,000..."). It only dropped to under $300 because it got repeatedly beaten by the Haswell i5's at 1/4 of the price (and sometimes even the i3-4xxx's) for gaming. As others have said, no corporation is your "friend". Not Intel, not nVidia and not AMD either...
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#39
Space Lynx
Astronaut
Vya DomusHow exactly do you increase your margins by shipping less products ?
Exactly. Like I said, AMD would have made more money off of me if they had 7900 XTX in stock, cause I was frothing at the lips to get one, and we both know they have bigger profit margins on that card. People say it was to get rid of old stock first, which is utter bs, because 6800 XT has been out of stock all last year, even in December when it did come in stock it would sell out fast, I know cause I monitored it often trying to get one at MSRP.

AMD is dumb as shit. lol
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#40
Argyr
ChaitanyaLeather guy from nGreedia already had admited to market manipulation and got away with it while many people defended that nonsense. Anyone having an outrage over this revalations are bunch of hypocrites since AMD is learning from Market leader.
nice damage control. precious AMD literally can't do wrong!

Also, about leather jackets...
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#41
Haile Selassie
Vya DomusHow exactly do you increase your margins by shipping less products ?
When you sit on a pile of Ryzen 5000, AM4 chipsets and Radeon 6000 inventory, you don't ship Ryzen 6000/7000 and Radeon 7000 in volume. And whatever you ship, you charge premium for. Stale inventory depreciates over time and reduces your margin.
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#42
Space Lynx
Astronaut
Jensen at least looks good in leather jackets, dude is a straight up baller.
Haile SelassieWhen you sit on a pile of Ryzen 5000, AM4 chipsets and Radeon 6000 inventory, you don't ship Ryzen 6000/7000 and Radeon 7000 in volume. And whatever you ship, you charge premium for. Stale inventory depreciates over time and reduces your margin.
again I call bs on this. 5800x3d was SOLD OUT IN LATE NOVEMBER they had to make a bunch more of it for it to just get in stock again in January. same with 6800 XT.

lol keep them coming economics majors.
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#43
Vya Domus
Space LynxExactly. Like I said, AMD would have made more money off of me if they had 7900 XTX in stock, cause I was frothing at the lips to get one, and we both know they have bigger profit margins on that card. People say it was to get rid of old stock first, which is utter bs, because 6800 XT has been out of stock all last year, even in December when it did come in stock it would sell out fast, I know cause I monitored it often trying to get one at MSRP.
Everything goes out of stock at launch, that has nothing to do with undershipping or whatever, now both XT and XTX are in stock where I live, reference and custom models and the prices are lower as well. So I am wondering where is this supply constraint.
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#44
Vya Domus
Haile SelassieWhen you sit on a pile of Ryzen 5000, AM4 chipsets and Radeon 6000 inventory, you don't ship Ryzen 6000/7000 and Radeon 7000 in volume. And whatever you ship, you charge premium for. Stale inventory depreciates over time and reduces your margin.
All those are in stock where I live, constantly, the only product I have seen out of stock in December was the XTX but now that's back as well, they've also dropped in price.
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#45
Vya Domus
Space Lynx4070 ti and 4080 never went out of stock once.
And ?
Space Lynxwhen i reference 5800x3d and 6800 xt being out of stock it was in the realm of online retailers only, stock is stable now, but 5800x3d was sold out for awhile in november/december. but its in stock everywhere now, which means they were never sitting on old stock of it...
You realize this doesn't mean anything, right ? Things go in and out of stock all the time dude, you're making scenarios up.
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#46
Space Lynx
Astronaut
Vya DomusAnd ?
you said everything goes out of stock at launch. i was just letting you know that is not true for companies that target their shipment numbers right - undershipping is to make sure they don't have too much stock of something - that is different imo than actively making sure no stock of xtx at msrp is there.
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#47
Vya Domus
Space Lynxyou said everything goes out of stock at launch. i was just letting you know that is not true for companies that target their shipment numbers right - undershipping is to make sure they don't have too much stock of something - that is different imo then actively making sure no stock of xtx at msrp is there.
Typically, yes. It happens with almost every GPU launch ever.

Maybe the 4070ti and 4080 haven't been out of stock at launch because people weren't exactly stepping on each other to buy them, ever thought of that ? One of them is over 1200$ and the other was a failed attempt at falsely advertising a product, so they didn't exactly have the best prospects of being top sellers.
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#48
KV2DERP
So this is why AMD holding back the non-X skus from being released at the same time as their X-skus.

Non-X Ryzen 5000 was released way later in 2022 instead of 2020. Not to mention a bizarre decision to release Zen 2 based SKUs in 2022.
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#49
Crackong
Space Lynx4070 ti and 4080 never went out of stock once.
That simply means they are overpriced and nobody wants them right now. (Same goes to AMD 7900XT)

4070ti and 4080 exist for one sole purpose -> upsell the 4090.
Posted on Reply
#50
Space Lynx
Astronaut
Vya DomusTypically, yes. It happens with almost every GPU launch ever.

Maybe the 4070ti and 4080 haven't been out of stock at launch because people weren't exactly stepping on each other to buy them, ever thought of that ? One of them is over 1200$ and the other was a failed attempt at falsely advertising a product, so they didn't exactly have the best prospects of being top sellers.
there is always a market. 4090 is sold out constantly for example. i think nvidia just targeted their numbers in production better for the 4070 ti and 4080. we would need transparency on supply of each one made direct from nvidia though to know for sure.
CrackongThat simply means they are overpriced and nobody wants them right now. (Same goes to AMD 7900XT)

4070ti and 4080 exist for one sole purpose -> upsell the 4090.
not necessarily. we would need more data to know that for sure.

where as what we have here, is AMD actively admitting make sure they didn't supply enough 7900 XTX to meet demand, at least that is how I read it from the TechSpot article.
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