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

[ExcuseMeWtf]

Shortages generate demand?! Wtf?! It's the other way around!

They don't generate demand. They make demand higher than supply by lowering the latter, making prices and hence margins, rise.

 

[T1beriu]

The unsold inventory they are referring to is in the supply chain, distribution network, on retail shelves.

I understand what you were saying and I completely agree, that's why I don't get the following statement:

AMD [...] disclosed [...] that it "undershipped" chips [...] to save itself from unsold inventory

TPU made is as if AMD wanted to control their own increase in inventory, not the one in the supply chain. That's why I'm saying it doesn't make any sense.

They don't generate demand. They make demand higher than supply by lowering the latter, making prices and hence margins, rise.

Yeah man, I know. Don't explain it to me, but the other guy.

 

[Dirt Chip]

One can argue that this practice is better than to lay off any thousands of employees like many other giant companies do this days.
Granted, it can allways come together with massive lay off...

 

[claes]

Shortages generate demand?! Wtf?! It's the other way around!

Shortages decrease demand? Supply generates demand? This thread is something else

TPU made is as if AMD wanted to control their own increase in inventory, not the one in the supply chain. That's why I'm saying it doesn't make any sense.

What would happen to prices if they flooded the market with cards?

 

[Bwaze]

One can argue that this practice is better than to lay off any thousands of employees like many other giant companies do this days.

But the client segment plummeted as hard as any tech revenue this quarter. The only thing saving them is data center / server revenue increase:

"Client segment revenue was $903 million, down 51% year-over-year due to reduced processor shipments resulting from a weak PC market and a significant inventory correction across the PC supply chain."

"Data Center segment revenue was $1.7 billion, up 42% year-over-year primarily driven by strong sales of EPYC server processors."

Is AMD now rather focussing on a data center / server segment, so much so that the chiplets are primarily designed for that use and can't really be optimally utilised in home PC?

Also, did AMD replace shipments of client CPUs on which they have lower margins with server CPUs with much larger margins? That would make more sense than fear of overstocking.

 

[Pumper]

70 Ti, 80 and 90 from 40 series are insanely priced, inventory is low for a reason and that's to keep the prices at the same level.

This has been available for over an hour now at NBB. If this was 3080 two years ago (at €700) it would fly off the shelf in seconds.

Well, the other reason is that you can get AIB 4080 on the same site for 1300€ or even cheaper (PNY is going for 1269€), unlike 3000 series, where FE was the cheapest option.

 

[billEST]

try to manipulate price

tell strategie to intel

illegal

 

[prtskg]

AMD undershipped client CPUs not GPUs as Intel has flooded the market with its own products and OEMs want Chromebook level margin for client CPUs which AMD doesn't agree with. Posted this since some people were complaining about GPU undersupply. This has been happening since last quarter. Intel is using its manufacturing capacity to price AMD out of market.

 

[wNotyarD]

RTE?

From context, I guess Ryzen, Threadripper and Epyc.

 

[Legacy-ZA]

See? Companies can never do the opposite when things go bad. Always the customer that has to keep being screwed.

 

[Wirko]

tax implications

This, too. If they anticipated a profit for 2022 and a possible loss for 2023, it would have been wise to delay some revenue to 2023, if possible.

Is AMD now rather focussing on a data center / server segment, so much so that the chiplets are primarily designed for that use and can't really be optimally utilised in home PC?

I'd put it another way. Their universal chiplet architecture is ingenious enough to afford them a lot of flexibility. I'd love to learn some details about yields and average quality of chips. Until then, I'm inclined to think that, after several months of manufacturing and improvements, most working chips can be binned as "very good" for either line of their CPUs.

Edit: Also, die manufacturing takes about 3 months. It's a great strategic advantage if you can decide where to put a die only after you have that die in your hand.

 

[Gungar]

[TechSpot] AMD admits to restraining chip supply to keep higher CPU and GPU prices

https://www.techspot.com/news/97462-amd-admits-restraining-chip-supply-keep-higher-cpu.html The article states, "In a Tuesday evening investors call, AMD CEO Lisa Su tried to calm investor anxiety by pointing out that the company has been, and will continue to, undership GPUs to "balance...

www.techpowerup.com

I locked my thread on it, or well requested it be locked. I already said what I wanted to say. I regret not paying a little extra for a 4070 ti now.

Take care AMD it was nice knowing you. My money is going elsewhere moving forward.

"to save itself from unsold inventory" lol I call bs on this. 6800 XT sold out instantly all last year, even in December. I know because I kept an eye on it on PC Reddit sales. lol nice one. you crack me up AMD.

Nvidia does exactly the same thing... That's why companies should never tell the truth, because of your kind of people.

 

[watzupken]

While people get upset knowing that a company restricted supply to try to keep prices up, the fact is that these are profit seeking companies. AMD is no different from Intel nor Nvidia. So then why are people upset? This is not something new isn’t it? Assuming Lisa Su is a great person that decides that they don’t need to make so much money, and so sell their products for a song. I am pretty sure she will be removed by the board and key investors at some point.

In any case, be it Nvidia, Intel or AMD, they can only restrict supply to some point. When supply far outstrips demand, unless they can stop the fab from producing, they will have an inventory problem at some point. This is a delay tactic that cannot last. You can choose not to produce any cards, but the chips are still getting manufactured because they are paid for in advance. So it is really kicking the can down the road kind of solution.

 

[hsew]

Funny how the people complaining about this are the same people who complained about AMD being perceived as a “budget brand”.

 

[Fluffmeister]

So to clarify, are AMD greedy?

 

[Assimilator]

So to clarify, are AMD greedy?

Every company is greedy. That's how capitalism works. Some people are just too stupid to understand this.

 

[N3M3515]

This is all new to me, there are always "expensive" times and "cheap" times. Seems amd, nvidia, intel now want to always have "expensive" times. Permanent expensive products. They have already erased entry level products.
So, when cheap times arrive they just "undership" to maintain prices high.
I guess supply and demand is being manipulated?

 

[medi01]

Good times!

Terrible reporting.

She meant undershipping of the chips that are in demand, that they haven't been able to produce enough of to meet demand. Most likely EPYC chips for the datacenter, Rembrandt for the mobile markets/mini pc's, SOCs for the consoles and probably the SOC for the Steam Deck.

They're not holding back inventory to drive prices up, although you're forgiven for thinking so since that is what the article (mistakenly) implies.

 

[Squared]

AMD's future depends on how they manage their money today. And with inflation everything is 15% more expensive since even 2020, so prices will be up permanently.

That said, I think there's still room for complaints. The midrange and low-end cards are limited to x8 or even x4 PCIe lanes which is horrible for upgrading PCIe 3.0 platforms, every GPU under $200 feels like a scam, and low-profile cards barely exist and are all horrible.

Intel Arc is probably helping a little bit in the midrange, but because of its resizeable bar requirement it still doesn't work well on a lot of older PCIe 3.0 systems.

 

[john_]

Well Nvidia admitted doing it much sooner. Don't remember any news articles. I wonder why...
I am not talking about TPU, but in general the press was quiet in Nvidia's case. That period the press and Youtubers where more focused on promoting Nvidia cards by informing us that the RTX 3090 Ti had seen a price drop and we should buy it.

And on the contrary to Nvidia, AMD DID DROPPED PRICES those last quarters. So, even with limited inventory, AMD DID tried to make it's cards more affordable.

But consumers decided to rush and buy the RTX 4090 and the RTX 3050, even OVER THEIR ORIGINAL MSRPs. In RTX 3050's case, EVEN WHEN THERE WHERE BETTER AND CHEAPER OPTIONS IN THE MARKET.

So, why supply consumers with cards, when they are not going to buy them, because they love Nvidia and they are willing to pay whatever price Nvidia asks?

Good move from AMD. Let consumers buy a new jacket for poor Jensen.

 

[JAB Creations]

You do what you need to do to keep afloat.
AMD, like any other major player, will favor it's shareholders and bank balance before the consumer.
Anyone feeling 'betrayed'- that's only on you. It's a nice lesson to learn about global economy.
You can't have mutual friendship with those company's.

Whoa, a mature comment without having to scroll through a dozen+ clueless posts by people who have zero comprehension about business or economics?

 

[thesmokingman]

All companies control their supply vs demand. And you'd think ppl would understand what happens when companies lose control of their supply chains right, we just went thru a COVID impacted supply chain for two years. Hello ppl??

Also there's no winning no matter what they do. Take Tesla for ex. In order to ramp to the moon they cut prices so spur demand. PPL whined about losing equity in their used cars, lol. There's no winning either way.

 

[Bomby569]

thank God AMD saved us from NVidia

All companies control their supply vs demand.

Companies that have monopolies or duopolies maybe, normal companies DO NOT sit on inventory, what world do you live in?

 

[thesmokingman]

thank God AMD saved us from NVidia



Companies that have monopolies or duopolies maybe, normal companies DO NOT sit on inventory, what world do you live in?

They all do, you must be new at this. For ex. early last year they over ordered due to chip constraints compensating and preparing for the next worst case, then in late 2022 they cut orders due to forecasted lowered demand because we're in a global recession duh. All freaking companies will try to balance supply vs demand. Did you whine when the semis cut their wafer orders???

 

[ThrashZone]

Hi,
Admitted to holding back shipments to keep prices as high as possible and some think this is a good thing
Once acceptance is complete we'll never see prices drop