Gigabyte Expects Its Graphics Card Shipments to Fall by 20% in 2Q18

[Raevenlord]

As the mining craze seems to have hit a steaming wall alongside the current contraction in the crypto market (which has almost all cryptocurrencies redlining), Gigabyte is revising its graphics card shipment expectations for 2Q18. This isn't a sudden move, mind you: the "cryptocurrency mining accelerator market" has been slowing its ludicrous demand for some time now. However, Gigabyte expects the slowdown to continue and maybe even become steeper: a 20% reduction in its overall shipment expectations for 2Q18, from 1.2M units down to 1M, and a 10% reduction in ASP (Average Selling Price) do speak to this decline in demand. As a result of this expected decrease, Gigabyte will once again turn its marketing efforts towards gaming products and usage scenarios for their graphics cards, diverting funds that had been allocated to mining.

Don't worry though: Gigabyte is doing great. 1Q18 saw the company post record profits higher than the first half of 2017 - 1Q18 profits rose 91% sequentially and skyrocketed five-fold YoY to NT$1.61 billion (US$52.75 million). The company's revenue for graphics cards hit an all-time high of 49% per graphics card sold (a result of increased ASP). the company's motherboard business should see the same results as the previous year - a fault of Intel's increased delays in launching a new, compelling product line-up. Who would have thunk - Intel, the company that's always launching new platforms and chipsets and ending motherboard support for new CPUs.



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[xkm1948]

In other news, GPU price remains high for now two year old Pascal and Polaris based cards as vendors refuse to give up the huge margin

 

[yotano211]

In other news, GPU price remains high for now two year old Pascal and Polaris based cards as vendors refuse to give up the huge margin

What are you talking about, prices are back to normal for most or all cards. Maybe you need to get out more and come out of the basement.

 

[DeOdView]

The AIBs knew this date will come (didn't came soon enough if you asked me?) so that's that. Well, at least they had its while it's last.

 

[xkm1948]

What are you talking about, prices are back to normal for most or all cards. Maybe you need to get out more and come out of the basement.

Your normal means MSRP. My normal is below MSRP since 2 year old GPUs.

 

[Casecutter]

I would say like 'xkm1948' that prices, and especially mainstream are not where they should be, now after being such "long-in-the tooth" technology. When a RX 570 8Gb for $250 after a $20 Rebate is a currently considered as a "deal" on Slick Deals... that's just not correct! Right today even taking into higher GDDR costs such a card for anything south of $200 is crazy. While a RX570 4Gb working a rebate might be like tops $160.

 

[Axaion]

>Don't worry though: Gigabyte is doing great.

Dont worry though, no one would care if they werent, if they were unable to do great with the prices they and others charge.. then i cant even..

 

[ppn]

Think went down TO 20% for more accuracy.

 

[Vayra86]

I would say like 'xkm1948' that prices, and especially mainstream are not where they should be, now after being such "long-in-the tooth" technology. When a RX 570 8Gb for $250 after a $20 Rebate is a currently considered as a "deal" on Slick Deals... that's just not correct! Right today even taking into higher GDDR costs such a card for anything south of $200 is crazy. While a RX570 4Gb working a rebate might be like tops $160.

Long in the tooth but still the most recent gen, so, dont blame AIBs for this, blame AMD and Nvidia for still riding this train...

 

[xkm1948]

Long in the tooth but still the most recent gen, so, dont blame AIBs for this, blame AMD and Nvidia for still riding this train...

Not gonna be long though. Polaris30 due Q4. 11xx series also in Q4

 

[Casecutter]

Long in the tooth but still the most recent gen, so, dont blame AIBs for this, blame AMD and Nvidia for still riding this train..

What I think is a fair assumption, as by this time in the market prices are historically known to relent from original MSRP. While sure there's no blame for not delivering new-gen stuff, as who/our why offer or upset the waterfall of product while mining was taking it... it's not like gamers would've benefited by that.

But now that it seems AMD has the acceptable volume in channel and their AIB's ebb-n-flow with getting GDDR and seems prices waver up/down. Nvidia said to have faired worse and may have a bulging of inventory. Seems like there AIB's might receive GDDR at volumes but might seem more consistent. Nvidia looks to dwindle down such inventory's at a rate that maintains there price position even if it mean push-back their next-gen parts.

Polaris30 due Q4

What? Have you read about... if they are doing anything it's a well kept secret.

 

[Vayra86]

What I think is a fair assumption, as by this time in the market prices are historically known to relent from original MSRP. While sure there's no blame for not delivering new-gen stuff, as who/our why offer or upset the waterfall of product while mining was taking it... it's not like gamers would've benefited by that.

But now that it seems AMD has the acceptable volume in channel and their AIB's ebb-n-flow with getting GDDR and seems prices waver up/down. Nvidia said to have faired worse and may have a bulging of inventory. Seems like there AIB's might receive GDDR at volumes but might seem more consistent. Nvidia looks to dwindle down such inventory's at a rate that maintains there price position even if it mean push-back their next-gen parts.


What? Have you read about... if they are doing anything it's a well kept secret.

Yeah but history is no real thing to go by; Pascal and Polaris are older than every gen before it until they got replaced and have just gone through a huge demand spike with only vague rumors on the horizon at this time. Its really not comparable to anything we"ve seen before. And on top of all this, this is also the rare moment where competition only really exist up unto the midrange - a segment already served with last gen (Maxwell) high end hardware which came at price points many didnt want to consider, esp not wiith a dirt cheap 970 up for grabs.

This volatile combination simply means that demand is still above the level it has ever been especially at the midrange: the segment where people are equally price and performance aware. And to somewhat lesser extent the high end, where its mostly performance that is the main USP and where competition does not really exist.

The only change in the market has been dropping demand of the larger volume purchases for mining, but the demand for gaming is still there, because lots of people have waited it out. And the games actually want that higher performance by now, too, which further fuels the upgrade itch.

 

[Casecutter]

And on top of all this, this is also the rare moment where competition only really exist up unto the midrange

These are perceived prices base on all we're discussing (mining, GDDR, inventory, etc) but the BOM costs are fairly constant for graphic card (other than this time GDDR is escalated) there is no reason to judge these well over MSRP prices and that what I'm working from with what saying. Honestly BOM cost might be even better because PCB's individual IC component, connectors, were probably bulked up in AIB inventory and they probably got those at lower cost based on quantities and now normally aren't looking to get stuck with stuff. Sure for some of that they can carry over to next gen, but honestly do we think AIB have give next-gen chip to start lock down their next designs? IDK.

There plenty of competition in the Enthusiast segment not perhaps against the GTX 1080Ti, but for Vega 56 and 64 parts they are out there, and not as good as "GP104 prices", you can find 56's for down to $450. Considering the HBM pricing that not super out of a "perceived" price when generic equipped GTX 1070's are hovering at more often like $400.

 

[Vayra86]

These are perceived prices base on all we're discussing (mining, GDDR, inventory, etc) but the BOM costs are fairly constant for graphic card (other than this time GDDR is escalated) there is no reason to judge these well over MSRP prices and that what I'm working from with what saying. Honestly BOM cost might be even better because PCB's individual IC component, connectors, were probably bulked up in AIB inventory and they probably got those at lower cost based on quantities and now normally aren't looking to get stuck with stuff. Sure for some of that they can carry over to next gen, but honestly do we think AIB have give next-gen chip to start lock down their next designs? IDK.

There plenty of competition in the Enthusiast segment not perhaps against the GTX 1080Ti, but for Vega 56 and 64 parts they are out there, and not as good as "GP104 prices", you can find 56's for down to $450. Considering the HBM pricing that not super out of a "perceived" price when generic equipped GTX 1070's are hovering at more often like $400.

But thats just it, pricing is never really about BOM at all. Its mostly about the perception of the marketplace, emotion, marketing and branding. That is what determines price to end users and also what constitutes value to most of them. WE may know better but a vast majority does not. They only consider a very simple "do I need it - can I afford it"..

The whole DRAM crisis is just the same thing really. You simply cannot defend the high cost of that is anyway related to manufacturing expenses.

 

[B-Real]

What are you talking about, prices are back to normal for most or all cards. Maybe you need to get out more and come out of the basement.

Absolutely not. In Hungary, they are still 10-20% higher than the original prices.

 

[Basard]

So, basically, they ripped us all off for a couple of quarters in the name of 'mining'.

And their shipments ONLY fell 20%? 20% as opposed to what? Did I just miss something? I hope their profits fell 100%, just like I hoped the price of GPUs fell the same.

 

[yotano211]

So, basically, they ripped us all off for a couple of quarters in the name of 'mining'.

And their shipments ONLY fell 20%? 20% as opposed to what? Did I just miss something? I hope their profits fell 100%, just like I hoped the price of GPUs fell the same.

All of you guys who think that a 1080ti will fall to $300 this year keep dreaming. They'll fall to $300 within 5 years.
And no, they didnt rip anyone off, there was a short supply of cards for some time so the laws of supply and demand kicked in.

 

[Caring1]

And no, they didnt rip anyone off, there was a short supply of cards for some time so the laws of supply and demand kicked in.

Thanks for the laugh, so apart from ripping everyone off, they jacked the prices higher due to high demand, everyone else can see it.

 

[yotano211]

Thanks for the laugh, so apart from ripping everyone off, they jacked the prices higher due to high demand, everyone else can see it.

Its business, they still have to make money. I sold lots of cards for higher than what I paid for. I dont feel like I ripped anyone off, the buyers wanted cards and I sold them the cards at the price that the market sustains prices at.

 

[techy1]

All of you guys who think that a 1080ti will fall to $300 this year keep dreaming. They'll fall to $300 within 5 years.
And no, they didnt rip anyone off, there was a short supply of cards for some time so the laws of supply and demand kicked in.

is that so? then maybe we should buy gtx 980ti's for 500$? I mean that gen are only 3+ year old - so as new from your standarts and we should be happy that it is below msrp at this point. btw - tell me what miners are gonna do with their 6-8 gpus riggs? sure - heating season will be soon, so that is one option for some... but for other miners - will they continue to mine 0,30$ a day and keep w8-ing for that time when btc hits 20000$ again (and there fore all other coins too)? side question - what is more likely from this point - btc (it is 6k-ish? now) hitts 2k or 20k in next 3 months?

 

[ppn]

60 class card on 7nm will be faster than 1080ti. Take GTX 1060 and GTX 780Ti for example. So 199$ ish.

 

[Casecutter]

But thats just it, pricing is never really about BOM at all

In any manufactured product business it's supply and demand, and if bludgeoned with inventory and components selling at 20% over BOM cost is still making money, all while seeing such issues fade into rearview mirror as fast as possible if that's what they need.

That's why I could get a R9 280 for $140 long before the next replacement was even talked about (and would be just a re-brand). A card that MSRP for $280 March '14 was down to half by like Jan-Feb '15 because AMD/Rory had gotten themselves into a similar position Nvidia sits in, but they had to dump. Or, fall behind further, as at that point Nvidia had Maxwell in the market. So AMD drop that weight and got back on the gas! Leaving Rory on the side of the road.

Although, Today Nvidia enjoys no heat to cut prices (there out front and just need to back off a little), stretch-out "next-gen" discussion, then paper launch with FE's at inflated prices/minuscule availability, and hold on to what gamers perceive as value of outgoing and incoming parts. So, correct in this case BOM costs are not an issue for their strategy .

 

[yotano211]

is that so? then maybe we should buy gtx 980ti's for 500$? I mean that gen are only 3+ year old - so as new from your standarts and we should be happy that it is below msrp at this point. btw - tell me what miners are gonna do with their 6-8 gpus riggs? sure - heating season will be soon, so that is one option for some... but for other miners - will they continue to mine 0,30$ a day and keep w8-ing for that time when btc hits 20000$ again (and there fore all other coins too)? side question - what is more likely from this point - btc (it is 6k-ish? now) hitts 2k or 20k in next 3 months?

It only went to $500 because of short supply, miners where buying anything in the store and online. And who know where the price of crypto coins is going.

 

[Vayra86]

Thanks for the laugh, so apart from ripping everyone off, they jacked the prices higher due to high demand, everyone else can see it.

How is this a rip off? Its staggering how so many people here fail to understand the dynamic at work. Two years ago this situation is precisely what most of us predicted and now that we are in it, we are complaining our predictions came through.

The simple fact that we are still waiting on card purchases is telling: the demand is still there... its blatantly obvious and somehow people cannot see it... weird. Its not a ripoff if a product doesnt fall to your preferred price point. Its business and as long as it sells, it will remain as is.