AMD has been under shipping GPUs/CPUs while keeping prices high

[KompuKare]

And yet despite all this, they still have a substantially bigger market cap compared to Intel (for now!).

Yes, but share prices have a huge element of gambling to them. I wonder what Wall Street would have said that if they had said their strategy was to continue with what they said about servers and Xilinx, but were going to go for marketshare with clients?

In a recession, a bit lower margins for increased volumes might not have gone down that badly.

 

[Freddie1980]

Plenty of stock, I think they may need to start shipping less or drop their daft GPU prices. Zen 3D cache, can see them under shipping them as well, milk the desktop market for higher margins, thing is not many people are buying new expensive hardware in this financial climate.

AMD admits to be undershipping CPUs and GPUs - VideoCardz.com

AMD has been undershipping GPUs/CPUs while keeping prices high AMD has been playing a supply and demand game. This might be why Radeon and Ryzen prices have been relatively high in late 2022. AMD CEO admitted during the latest earning call with investors and analysts that the company has been...

videocardz.com

Misleading headline. Nvidia and AMD were selling every scrap of silicon they could get out the door during lockdown but now demand has fallen of a clif there left with larger stocks of unsold graphics cards and CPU's so it's only natural they would ship less to even out inventory levels.

 

[Freddie1980]

And yet despite all this, they still have a substantially bigger market cap compared to Intel (for now!).

Market Cap these days is a load of baloney, it's not unusual of companies to have unjustifiably high market valuations, WeWork springs to mind in that regards but you could lump AMD and Nvidia in that category as well (AMD more so).

 

[Hotwired]

In the end what this all means is that AMD have no intention of gaining marketshare.

For GPUs they are not willing to produce more RDNA2 parts as the channel cannot shift them at current prices.

For CPUs it has been obvious that they don't care for the low-end for ages now with nothing to compete with Celeron or Pentiums:
They were never willing to order more GF 12nm wafers for the under £50 market.
With Zen2/3 they weren't willing to make proper small parts.
For Zen4 they weren't willing to make a DDR4 AM5 lite part, and gambled all of the desktop market on DDR5 and AM5 prices.

As I keep pointing out, the fixed costs for most of these things has already been done. Taking existing designs and ordering more wafers should be all profit (at lower margins yes, but profit all the same), but AMD are unwilling to do so.

And yet, their GPU marketshare is now at an unviable 10%. There may have been misplaced pride there too: maybe the Radeon Group told everyone even internally how good RDNA3 was going to be and there is no need to make more RDNA2 parts.

Er... AMD has been going full tilt at taking market share with the products they have a real and proven advantage in.

I really doubt they're sweating about not having any advantage in the consumer GPU market or that Intel is taking the low end cpu market.

Yes it upsets the consumer fantasy but if they don't see any money in competing in specific areas... they won't... They have a full time job milking a golden goose already.

 

[Hotwired]

I see the deleted article is still deleted and they haven't dared put it up again.

Meanwhile we have a talking potato who wants to explain what undershipping is to the great uninformed which includes scruffy tech sites posting bad take articles.

 

[Dalandius]

AMD are not your friend.

 

[Hotwired]

AMD are not your friend.

Could be, how do you think this story supports that view.

 

[KompuKare]

AMD are not your friend.

That's a given.
However, given that we know that:

1. Nvidia are 100% not your friend.
2. Intel are 100% not your friend.

As both have continuously done anti-consumer stuff for decades.
So what do we when AMD are finally big enough to try their hands at similar?

We could all boycott AMD and give our custom to Nvidia and Intel instead.

So what would that achieve?

Well, if AMD found out the reasons for this it might get them thinking maybe forcing them to change their behaviour.

On the other hand, what would this change in Nvidia's or Intel's behaviour?

I would propose: almost nothing. Even if they knew why consumers turned away from AMD, gaining that extra marketshare would probably lead one or both of them to go back to their old tricks.

So what to do?

Well, ironically moaning on forums might actually do some little good, but at the end of the day we have to ask ourselves what is best outcome for us consumers:

That in the CPU market - with only two players - each player has a near to 50% of the market as possible.

That in the GPU market - now with three players - that each player has as neat to 33% of the market as possible.

So, with full knowledge that each company is not our friend, we should still consider what is best in the longer term when deciding what to buy.

 

[Cyber-Mav]

Scalpers could be partly to blame? Prices these days are pre scalped for your convenience?

 

[Calin Banc]

Can someone explain, as you would explain a kid, why these companies go for higher margin instead of higher volume for similar or higher (through volume) profit and market share (at least in AMD's case)?

 

[BigBANGtheory]

Scalpers could be partly to blame? Prices these days are pre scalped for your convenience?

Scalping only functions in a constrained market unfortunately the consumer is taking multiple hits in a high margin/low volume product cycle they also pay increased tax.

It all leads to stagnation imho you'll get gamers spread over an increasing range of hardware age and then developers targeting that mid point which takes years to move until something disrupts the market.

 

[humbug]

I see the deleted article is still deleted and they haven't dared put it up again.

Meanwhile we have a talking potato who wants to explain what undershipping is to the great uninformed which includes scruffy tech sites posting bad take articles.

Yes exactly.

As Dr. Ian Cutress explains "Under shipping" is not price fixing, what they are talking about is less demand than expected, retailer are ordering less units that expected for that time, we all know demand for these parts is down ffs...

This is, as it usually is, Youtubers, who have no clue about anything hearing things that they do not understand and drawing conclusions that suit a click bait video.

Like the cracked die thing, how does voltage crack a die? Its the dumbest thing i have ever heard, Der8auer always pretending to be the scientific mind attempts to explain how it would happen, scientifically, no der8auer you are a fraud and an idiot, your entire spiel was complete and utter nonsense.

You know what could do that? A GPU that's been soaked in water.

 

[Nelly]

A global PC conglomerate, is reportedly cutting the number of its employees. The alleged move is a direct response to the economic downturn caused by declining demand for PCs, which is a primary source of revenue. According to Bloomberg Intelligence, a well known company is laying off about 5% of its global workforce, representing 6,650 employees from its offices. As the source notes, the well known company is going under re-evaluation of its operations, and the employee headcount reduction is the affected area that will benefit the company an estimated 700 million to one billion US Dollars, as analysts predict.

IDC notes that shipments of the well known company PCs have experienced the most significant decline of 37% in Q4 of 2022, compared to the same period in 2021. And given a considerable downturn, the well known company's 55% of revenue from PCs is poorly affected. The company is now joining others in big tech in performing layoffs to keep profits afloat.

Source: A well known tech news and reviews website.

I've edited the original post above, due to said company being a competitor, this one actually sells stuff in the UK, not like the other post I did in another thread.

This will probally be a sign of things happening worldwide, so probally effect the UK companies as well. Get them over priced motherboards down!

 

[BigBANGtheory]

This will probally be a sign of things happening worldwide, so probally effect the UK companies as well. Get them over priced motherboards down!

It is getting a bit better now at the high end OcUK themselves selling a decent ddr5 32gb kit for £270, and X670-E hitting £300. You have to judge the cost of AM5 over time that initial outlay could last you 5yrs or more with Zen5 & Zen6 support.

 

[subbytna]

Can someone explain, as you would explain a kid, why these companies go for higher margin instead of higher volume for similar or higher (through volume) profit and market share (at least in AMD's case)?

AMD want to move on from the "pile em high and sell em cheap" budget brand image. With a "premium" image (like Nvidia has) Nvidia can charge stupid prices for tech and people will buy it due to the "premium brand" image they have cultivated.

They want to maximise squeezing out every penny from hardware, before moving on to the next generation of hardware. Stock holders will want the business to be efficient, always getting maximum revenue for minimum outlay. Business efficiency.

PREMIUM MODEL
10 chips at 100 each to produce = 1,000
sell 10 chips each at 1000 = 10,000 (profit 9,000)

or

"BUDGET" MODEL
30 chips at 100 each to produce = 3,000
sell 30 chips each at 400 = 12,000 (profit 9,000) ...but many more expenses involved to make 30 chips - more wages for staff, more machinery costs, more materials etc, which will result in lower than the 9,000

It's all about efficiency.

Also, if you're a premium brand, you can sell the top silicon to businesses for THOUSANDS. Business sales are where the real money is to be made by a company. Look at INTEL and their data centre chips, INTEL were the leaders and could charge "leaders prices" for their workstation cpus, because of the image of being "a premuim brand"...not a stack them high and sell them cheap brand.