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

[TheoneandonlyMrK]

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 supply and demand." Of course, that's just another way of saying, "we're going to keep prices inflated by lowering our output."

"We undershipped in Q3, we undershipped in Q4," Su told investors. "We will undership, to a lesser extent, in Q1 [sic]."

The bit at the bottom doesn't equal the bit at the top though.

As for your other drivel, sling it and drop your spoon fool.

 

[ratirt]

Companies do want to increase their margins and supply chains but also dont want to stay with hundreds of thousands of products no one will buy. Demand drops supply drops it is simple. Companies can reduce supply to mitigate unprecedented expense. What costumer should expect is them companies being honest about the undertaken actions.

 

[Max(IT)]

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 supply and demand." Of course, that's just another way of saying, "we're going to keep prices inflated by lowering our output."

"We undershipped in Q3, we undershipped in Q4," Su told investors. "We will undership, to a lesser extent, in Q1 [sic]."

You are wasting you time. I really can't understand why, but some people are in denial mode about their beloved brand.
AMD cannot be wrong... even when they are.

Companies do want to increase their margins and supply chains but also dont want to stay with hundreds of thousands of products no one will buy. Demand drops supply drops it is simple. Companies can reduce supply to mitigate unprecedented expense. What costumer should expect is them companies being honest about the undertaken actions.

you are speaking about normal company strategy to keep a balance in their stock. Here the subject is an artificially created shortage to keep inflated prices at the expense of customers. It is a totally different matter.
I'm not surprised at all about those unfair tactics from multinational companies like AMD, but I'm surprised by supporters blindingly defending their beloved brand anyway.

 

[ratirt]

you are speaking about normal company strategy to keep a balance in their stock. Here the subject is an artificially created shortage to keep inflated prices at the expense of customers. It is a totally different matter.
I'm not surprised at all about those unfair tactics from multinational companies like AMD, but I'm surprised by supporters blindingly defending their beloved brand anyway.

And you base your opinion on price of the GPUs? Should a company produce infinite number of product despite dropping demand and be left with them? There is a huge inflation in literally every country. Companies look for savings and I can't blame them for being cautious. Do I like it? Of course not and I'd rather have low prices and variety of products to choose from. You may call those tactics unfair as a customer I get you but there is always two sides of the coin and it's rather healthy to understand both. The fact is, patience is the key here just wait and the prices will drop.

 

[Wirko]

Where's the "Both" poll option?

 

[Aerpoweron]

PC Wold updated their article. Techpowerup reported the news without context.

AMD is 'undershipping' chips to balance CPU, GPU supply

AMD joins Nvidia in "undershipping" chips to balance supply and keep prices higher.

www.pcworld.com

And the full transcript for all who want all the context:

Advanced Micro Devices, Inc. (AMD) Q4 2022 Earnings Call Transcript

Advanced Micro Devices, Inc. (NASDAQ:NASDAQ:AMD) Q4 2022 Earnings Conference Call January 31, 2023 5:00 PM ETCompany ParticipantsRuth Cotter - SVP,...

seekingalpha.com

And for all people who want to jump to Nvidia because of the out of context reporting, Nvidia does the same as AMD here, because the AIBs don't want to have too much stockpile because of lower all over sales.

I urge Techpowerup to update their article too and maybe write an apology to AMD for out of context reporting.

 

[TheoneandonlyMrK]

"​

Mark Lipacis
Hi, thanks for taking my question and congrats to Jean on the new seat. Two questions, if I may. First, on the PC side, can you give us a sense about roughly how far under consumption, you believe, you're shipping on the PC side, either in Q4 and Q1?
And Lisa, correct me if I am wrong, I thought I heard you say in an answer to an earlier question that you expect the PC client, but just to grow into second quarter. So is that suggest that 1Q, you think is the bottom on the PC? And then I had a follow-up? Thank you.
Lisa Su
Sure, Mark. So we - so the first - the second question, yes. We do believe the first quarter is the bottom for our PC market - for our PC business, and we'll see some growth in the second quarter and then a seasonally higher second half. In terms of the under shipment, I mean, I think we're - we undershipped in Q3, we undershipped in Q4. We will undership, to a lesser extent, in Q1. So I think you can infer that from our guidance single-digit down.
And then we'll be back to a more normal environment. Now just as a reminder though, the first half is not usually a - the first half is usually a seasonally weak client time anyways. So, we would expect more lift in the second half, not so much in the second quarter.
Mark Lipacis
Got you, okay. That's very helpful, thank you. And then a follow-up, if I may, on the - China is lifting, as they're lifting the COVID restrictions, I guess I would imagine that you would expect that ultimately, at some point, to translate into higher demand. And I'm wondering if you could just kind of share with us your thoughts about how that might play out?
And could you remind us is, to the extent that you can help us understand of the risk to the supply side for you in the event that the COVID spreads rapidly as they lift the restrictions and impacts what you have on the supply side there? Thank you.
Lisa Su
Sure, Mark. So we've done a very good job in our supply chain in terms of risk mitigation. So we have - we don't believe that we have a significant risk as it relates to COVID future outbreaks, if there are any. As it relates to China recovery, I think we would benefit from a China recovery. It's very difficult to call. I mean we've seen, certainly in our Data Center business, we saw in the second half of the year and last year in the first half of this year that the China Data Center business has been weak for us.
If there was a recovery, I think we would benefit from that. Similarly, some of the other consumer patterns as well. But it's very difficult to call. So we put that in the bucket of macro uncertainty, and we'll see how it plays out."

That's what was said.

 

[Ols-Hol]

PCWorld retracted the story (well, they should and mostly didn't), but you should recheck the article, there is a clarification.

TL;DR, they don't sell less to keep prices up on purpose, they sell less because customers and OEM partners don't buy. I don't know, few days ago it was published their revenue in CPUs dropped by 51 % and somebody thinks they do it on purpose? You can price-fix when there is lots of demand, not when demand cratered already, people.

Update: Drew Prairie, AMD’s VP of communications, reached out with the following clarification: “We are shipping below consumption because there is too much inventory in the channel and that partners want to carry lower levels of inventory based on the demand they are seeing and their expectations for their business…the idea we are doing this to keep prices “elevated” isn’t accurate. Our client ASP was flat year over year, and that is due to mix of CPUs shipped.”
This article originally published with the headline “AMD is ‘undershipping’ chips to keep CPU, GPU prices elevated” but it has been updated to reflect AMD’s clarification.

 

[TheoneandonlyMrK]

You are wasting you time. I really can't understand why, but some people are in denial mode about their beloved brand.
AMD cannot be wrong... even when they are.


you are speaking about normal company strategy to keep a balance in their stock. Here the subject is an artificially created shortage to keep inflated prices at the expense of customers. It is a totally different matter.
I'm not surprised at all about those unfair tactics from multinational companies like AMD, but I'm surprised by supporters blindingly defending their beloved brand anyway.

Some need to learn what a fact is.
How to provide proof, and process a conversation apparently.
I'm not surprised at all by those blindly throwing shit.

Try harder for the truth rather than bandwagon jumping.

And that goes for you too @btarunr

 

[nexus290]

[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.

You do realise nvidia admitted to doing the same thing but wasnt reported here ... not that I recall .



Su’s admission comes after Nvidia chief financial officer Colette Kress also told investors it was taking a similar approach to gaming GPUs in November 2022.

“We have been under-shipping gaming at this time so that we can correct that inventory that is out in the channel,” said Kress.

As a result, prices of Nvidia’s RTX 30 series cards have remained relatively high despite the launch of the RTX 40 series late last year.


Also nvidia and AMD had no choice the oems were complaining that their inventory was too high , they just couldnt sell them at the prices they were asking .

 

[john_]

Nvidia that sells ABOVE MSRP and controls 90% of the GPU market admits taking measures to prevent oversupply a few months ago.

NO ONE POSTS ANYTHING. NO ONE MAKES A VIDEO ABOUT IT.

AMD that sells WAY BELOW MSRP and only controls 8% of the GPU market, admits at taking the same measures.

THE WORLD IS IN TOTAL CHAOS. ARTICLES EVERYWHERE, VIDEOS EVERYWHERE, POSTS EVERYWHERE.

Consumers shooting themselves in the foot again and again and again and again.....

 

[Fasola]

So it was all just a nothingburger.

@Space Lynx care to provide a reaction to the new information?

 

[qubit]

It's so reassuring to see that AMD kept availablity low and prices high for their benefit.

 

[john_]

It's so reassuring to see that AMD kept availablity low and prices high for their benefit.

What high prices? AMD dropped prices in GPUs and people kept buying Nvidia cards above MSRP.

 

[qubit]

What high prices? AMD dropped prices in GPUs and people kept buying Nvidia cards above MSRP.

Says so in the first sentence of the article.

 

[thesmokingman]

So much misinformed layman outrage.

 

[qubit]

So much misinformed layman outrage.

Are you calling me misinformed? Read the first sentence of the article.

 

[rv8000]

why 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.

The justification you wouldn’t use AMD here based on video playback power usage is hilarious. TPU results for 4080 video playback are 20w, my 7900 XTX uses 60w even with 2 monitors.

If you assume 2 hours of YouTube every day, for 4 years (lifespan of use), in the US, the price difference in electricity is roughly $18.82. To use video playback power consumption as a justification, is not only sad but makes you look bad. Especially considering the difference in cost from a first party etailer/retailer is always significantly in favor of the 7000 series cards when considering a card of the same quality.

Having both 6000/7000 series cards and two 3080s, the only argument a 4000 series card has going for it is RT performance, and even then it’s not as massive a lead unless you’re going all out with a 4090.

The 7900 XTX is objectively better value than the 4080, including clown status justifications like video playback power usage

 

[nexus290]

Says so in the first sentence of the article.

Actually, it doesn't it just says "chips" we don't know which chips if its new generation or old generation or gpus or cpus. Anyways AMD gpu prices for last gen AMD has been falling steadily at a way faster clip than nvidia last gen. Also, I blame neither nvidia nor AMD because nvidia had to do the same thing in November of 2022 as stated by the chief financial officer

“We have been under-shipping gaming at this time so that we can correct that inventory that is out in the channel,” said Kress

 

[TheoneandonlyMrK]

PC Wold updated their article. Techpowerup reported the news without context.

AMD is 'undershipping' chips to balance CPU, GPU supply

AMD joins Nvidia in "undershipping" chips to balance supply and keep prices higher.

www.pcworld.com

And the full transcript for all who want all the context:

Advanced Micro Devices, Inc. (AMD) Q4 2022 Earnings Call Transcript

Advanced Micro Devices, Inc. (NASDAQ:NASDAQ:AMD) Q4 2022 Earnings Conference Call January 31, 2023 5:00 PM ETCompany ParticipantsRuth Cotter - SVP,...

seekingalpha.com

And for all people who want to jump to Nvidia because of the out of context reporting, Nvidia does the same as AMD here, because the AIBs don't want to have too much stockpile because of lower all over sales.

I urge Techpowerup to update their article too and maybe write an apology to AMD for out of context reporting.

"​

Mark Lipacis
Hi, thanks for taking my question and congrats to Jean on the new seat. Two questions, if I may. First, on the PC side, can you give us a sense about roughly how far under consumption, you believe, you're shipping on the PC side, either in Q4 and Q1?
And Lisa, correct me if I am wrong, I thought I heard you say in an answer to an earlier question that you expect the PC client, but just to grow into second quarter. So is that suggest that 1Q, you think is the bottom on the PC? And then I had a follow-up? Thank you.
Lisa Su
Sure, Mark. So we - so the first - the second question, yes. We do believe the first quarter is the bottom for our PC market - for our PC business, and we'll see some growth in the second quarter and then a seasonally higher second half. In terms of the under shipment, I mean, I think we're - we undershipped in Q3, we undershipped in Q4. We will undership, to a lesser extent, in Q1. So I think you can infer that from our guidance single-digit down.
And then we'll be back to a more normal environment. Now just as a reminder though, the first half is not usually a - the first half is usually a seasonally weak client time anyways. So, we would expect more lift in the second half, not so much in the second quarter.
Mark Lipacis
Got you, okay. That's very helpful, thank you. And then a follow-up, if I may, on the - China is lifting, as they're lifting the COVID restrictions, I guess I would imagine that you would expect that ultimately, at some point, to translate into higher demand. And I'm wondering if you could just kind of share with us your thoughts about how that might play out?
And could you remind us is, to the extent that you can help us understand of the risk to the supply side for you in the event that the COVID spreads rapidly as they lift the restrictions and impacts what you have on the supply side there? Thank you.
Lisa Su
Sure, Mark. So we've done a very good job in our supply chain in terms of risk mitigation. So we have - we don't believe that we have a significant risk as it relates to COVID future outbreaks, if there are any. As it relates to China recovery, I think we would benefit from a China recovery. It's very difficult to call. I mean we've seen, certainly in our Data Center business, we saw in the second half of the year and last year in the first half of this year that the China Data Center business has been weak for us.
If there was a recovery, I think we would benefit from that. Similarly, some of the other consumer patterns as well. But it's very difficult to call. So we put that in the bucket of macro uncertainty, and we'll see how it plays out."

That's what was said.

Are you calling me misinformed? Read the first sentence of the article.

The OP was misinformed leading to many being.

So a recap of what was actually said.

PCWorld retracted the story (well, they should and mostly didn't), but you should recheck the article, there is a clarification.

TL;DR, they don't sell less to keep prices up on purpose, they sell less because customers and OEM partners don't buy. I don't know, few days ago it was published their revenue in CPUs dropped by 51 % and somebody thinks they do it on purpose? You can price-fix when there is lots of demand, not when demand cratered already, people.

As @Ols-Hol said
"
PCWorld retracted the story (well, they should and mostly didn't), but you should recheck the article, there is a clarification.

TL;DR, they don't sell less to keep prices up on purpose, they sell less because customers and OEM partners don't buy. I don't know, few days ago it was published their revenue in CPUs dropped by 51 % and somebody thinks they do it on purpose? You can price-fix when there is lots of demand, not when demand cratered already, people.

Update: Drew Prairie, AMD’s VP of communications, reached out with the following clarification: “We are shipping below consumption because there is too much inventory in the channel and that partners want to carry lower levels of inventory based on the demand they are seeing and their expectations for their business…the idea we are doing this to keep prices “elevated” isn’t accurate. Our client ASP was flat year over year, and that is due to mix of CPUs shipped.”
This article originally published with the headline “AMD is ‘undershipping’ chips to keep CPU, GPU prices elevated” but it has been updated to reflect AMD’s clarification

 

[john_]

It's just one more case where everyone is rushing to attack AMD for no reason. Remember a few weeks ago how everyone was happy to report that RX 6000 cards where dying because of a driver? One place in the whole world, with one report of cards, was enough to spread the BS of RX 6000 cards dying because of a driver. And now this. And the way it was promoted throught the news. I mean, there is no logic. AMD dropping prices those last months on both CPUs and GPUs and everyone rushed to the conclusion it was intentional to keep prices up. This is moronic at best. A company with 30-40% market share in CPUs, if not less and just 8% market share in GPUs, CAN'T increase prices by lowering supply, because it does NOT control the market. Their competitor controls the market. Either all players in a market do the same move, or that kind of move will only hurt the company it is limiting supply. Also it is necessary to have the most wanted hardware in the market to have any hope of achieving something. But in CPUs Intel has the advantage and in GPUs Nvidia has the advantage. So, AMD is TOTALLY POWERLESS.

Still people prefer to throw logic into the trash and then they scream because prices gone up.

Says so in the first sentence of the article.

How about reality? The article could be saying that AMD increased prices by 200% the last 6 months. What is reality saying?

 

[medi01]

It's so reassuring to see that AMD kept availablity low and prices high for their benefit.

Which AMD products had "low availability" in 2H 2022 you fallible you?

 

[TheoneandonlyMrK]

[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.

You would have to be from Kepler to get as excited and excessive as you have , given you are only right, on Kepler, here in UK 6800Xt easy to buy since the mining boom/chip drough/tcovid ended, October/November ish I think I nearly bought one of a few 6900Xt priced at 675£ not bad kinda where I feel inflation should have taken us plus progress so to speak (obviously only my perspective is valid on availability this time despite me knowing YMMV in other regions)
Plus you got excited, no one said what you think they did and they did do something,but for different reasons than you think.

You can't ruck up to Asus with an extra 3million chips and say pay us , And use these now bitches though Intel, Nvidia, AMD have allegedly tried in the past according to some.

Some proven!.

 

[QuietBob]

Video playback power consumption for the 7900 series was much reduced already with the second driver. AMD promised further decrease in the future:

This is a 7900XTX playing back a 1080p YT video:

 

[N3M3515]

Nvidia that sells ABOVE MSRP and controls 90% of the GPU market admits taking measures to prevent oversupply a few months ago.

NO ONE POSTS ANYTHING. NO ONE MAKES A VIDEO ABOUT IT.

AMD that sells WAY BELOW MSRP and only controls 8% of the GPU market, admits at taking the same measures.

THE WORLD IS IN TOTAL CHAOS. ARTICLES EVERYWHERE, VIDEOS EVERYWHERE, POSTS EVERYWHERE.

Consumers shooting themselves in the foot again and again and again and again.....

I don't agree, on both times i remember saying that's fucked up.