When the Gpu's prices will go down ?

[Freddie1980]

As a special sale price offer, with 100 cards available worldwide at that "low" price

Does anyone know the materials cost for a graphics card? I'm sure it's a trivial proportion of the total cost of making one and transporting it to a customer (so variations in material costs shouldn't have any significant effect on the price of the card), but now I'm curious. A quick look online only showed me wildly varying guesses.

You can only guess at the BOM cost. But we can safely assume Samsung are charging less the TSMC per wafer so lets assume $8k per wafer. A GA102 die is 628mm2 each and lets say you can get 40 useable GA102 dies that can be binned into different SKU's. As a guess each chip alone will cost around $200, a RTX3080 has 10Gb of GDDR6X which costs around $16 per Gb so $160 for the memory, PCB and and various components probably another $100, founders edition cooler $100 (that's what I've heard but some that is R&D recovery) and maybe another $50 to put it all together so around $600/$630 each card and that's without marketing costs as well.

 

[Scougar]

I actually saw a 6600XT at a big retailer for only $50 above MSRP. Still couldn't bring myself to buy it, as I know I'd only be buying due to lack of availability rather than actually wanting that card.

 

[Angilion]

You can only guess at the BOM cost. But we can safely assume Samsung are charging less the TSMC per wafer so lets assume $8k per wafer. A GA102 die is 628mm2 each and lets say you can get 40 useable GA102 dies that can be binned into different SKU's. As a guess each chip alone will cost around $200, a RTX3080 has 10Gb of GDDR6X which costs around $16 per Gb so $160 for the memory, PCB and and various components probably another $100, founders edition cooler $100 (that's what I've heard but some that is R&D recovery) and maybe another $50 to put it all together so around $600/$630 each card and that's without marketing costs as well.

The thing in question was the materials cost, though, not the components cost plus profits for half a dozen companies on the way. It was in response to an increase in the price of copper. A raw material cost, not a manufactured component cost. The point being that if the raw materials cost is a trivial part of the total cost of getting the product to the customer, variations in the raw materials cost shouldn't make any significant difference to the selling price.

I'm pretty sure that the raw materials cost is a tiny proportion of the cost of getting a graphics card to a customer. The manufacturing costs alone would dwarf the raw materials cost, e.g. silicon is dirt cheap but turning that silicon into wafers is very far from cheap. Then there's development costs, testing costs, marketing costs, distribution costs...I'd be surprised if variations in raw materials costs would affect the total cost by even as much as 1%.

 

[rumple9]

Tbh it wouldn't surprise me if Nvidia are selling very limited supply of FE cards at break even/small loss as a loss leader marketing tactic and the real true cost of the AIB 3070 was always intended to be c£900 and 3080 c£1200, supply and chip shortage issues aside

 

[_Cereal_]

The thing in question was the materials cost, though, not the components cost plus profits for half a dozen companies on the way. It was in response to an increase in the price of copper. A raw material cost, not a manufactured component cost. The point being that if the raw materials cost is a trivial part of the total cost of getting the product to the customer, variations in the raw materials cost shouldn't make any significant difference to the selling price.

I'm pretty sure that the raw materials cost is a tiny proportion of the cost of getting a graphics card to a customer. The manufacturing costs alone would dwarf the raw materials cost, e.g. silicon is dirt cheap but turning that silicon into wafers is very far from cheap. Then there's development costs, testing costs, marketing costs, distribution costs...I'd be surprised if variations in raw materials costs would affect the total cost by even as much as 1%.

People really really understimate how much these companies spend just in R&D (not that i am defending the cost of the graphics card mind you, i think they are a blatant rip off)

 

[RBImGuy]

Tbh it wouldn't surprise me if Nvidia are selling very limited supply of FE cards at break even/small loss as a loss leader marketing tactic and the real true cost of the AIB 3070 was always intended to be c£900 and 3080 c£1200, supply and chip shortage issues aside

Nvidia raised margins a lot over the last decade its why they make so much money of you.
To cover the the cost prices could still be lower.
But we are likely facing the issue that prices wont come down.

Next year a 6900xt performance card will be made with a 128bit bus.
While the cache adds cost and what else it still be set at a higher tier than what been true as far.
even if Mining drops off, (unlikely btw) the prices will be higher due to a company wants higher margins so they can spend more on research
and pay their shareholders more.

The products are excellent but AMD/Nvidia/Intel has realized people are willing to pay more for cards.
(Miners aside) you buy a card that cost 2600euro and then others may not either afford that or wants to pay as much.
But economics don't follow various comments on forums.
Stop buying cards isn't a real option either as Miners still buys them.

For me, it means that my current vega56 that I considered to upgrade this generation now will wait for 2022 another year.
a 1800+ euro card today will cost performance wise half as much next year.
Make no sense upgrading now but make a lot of sense next year.
and one can save up a bit if needed until then.

But as far, we cant expect prices to drop off to what one would consider, msrp normal anymore.
Mining, margins and demand simply outstrip that.
a year has passed and one cant buy a card at msrp.

If mining dies off then prices can drop a bit but we face a future where stuff simply cost more
Intels (maybe) competition will not drop prices as they want to have margins also and they will do what Nvidia done.
Run you dry.

 

[gpuerrilla]

Nvidia raised margins a lot over the last decade its why they make so much money of you.
To cover the the cost prices could still be lower.
But we are likely facing the issue that prices wont come down.....

Im with you but what you are neglecting here is also the prices of CPU's is creeping up too. This gen Ryzen was another margin up, I dont think it makes any odds if Intel were seemed as inferior right now, they both will maintain as high a price they can get away with.

So when you upgrade after hesitating due to high GPU prices to your (1800 euro half as much) purchase with a more expensive CPU, have you really saved as much as you think you are doing instead of upgrading when you can and playing the games for however long then taking up from there when the other components need it?

 

[KompuKare]

Tbh it wouldn't surprise me if Nvidia are selling very limited supply of FE cards at break even/small loss as a loss leader marketing tactic and the real true cost of the AIB 3070 was always intended to be c£900 and 3080 c£1200, supply and chip shortage issues aside

While I agree that the main function of the FEs is to get reviews with unrealistic MSRPs, I highly doubt Nvidia are anywhere close to making even a small loss on those FE cards.

Yes, maybe compared to selling the chip to an AIB they are making less money, but that is far from the same thing as making a loss.

I also think @Freddie1980's BOM estimates were a bit high. While I think at a 625mm² die (for a nice an easy 25mm by 25mm size) with a 0.08 defect (a reasonable estimate for TSMC's 7nm, no idea what Samsung's 8nm is) only yields 49 good dies (so 3090 type), with the 3080 being only a partial die 55 or so dies might be usable as 3080s. Also I'd expect that IF TSMC's 7nm is is about $12k then Samsung really needs to be even less than $8k. If it is $6 then a 3080 die only costs about $110 and not $200. The FE cooler being $100 also seems unlikely. Hard to say, but third party coolers like those Arctic Cooler ones are a lot less than that. I'd say about $70 or so.

 

[sybaris]

Well I just seen on another site 3070 ti (out of stock though) at £1199. The world has gone nuts with the supply and demand of everything.

 

[_Cereal_]

Im with you but what you are neglecting here is also the prices of CPU's is creeping up too. This gen Ryzen was another margin up, I dont think it makes any odds if Intel were seemed as inferior right now, they both will maintain as high a price they can get away with.

So when you upgrade after hesitating due to high GPU prices to your (1800 euro half as much) purchase with a more expensive CPU, have you really saved as much as you think you are doing instead of upgrading when you can and playing the games for however long then taking up from there when the other components need it?

I see your point and i think it will always be extremely dependent on luck and timing, look how lucky anyone buying a 1080TI on release day was, knew someone who used theirs since launch day, managed a 3080FE and sold his 1080TI for 700 quid months ago, he ended up not spending a single penny.

 

[gpuerrilla]

I see your point and i think it will always be extremely dependent on luck and timing, look how lucky anyone buying a 1080TI on release day was, knew someone who used theirs since launch day, managed a 3080FE and sold his 1080TI for 700 quid months ago, he ended up not spending a single penny.

Very much so. I remember thinking this when I got my vega56 in a black Friday sale. It only dawns on you that a few months passes and there's new gens and your purchase fades regarding vfm. In light of the 1080Ti example, hindsight dictates it was a fantastic buy if you got one on launch time.

That is why this gen I decided to just take it on the chin and get on with it. Didn't work out too bad as I cant see any cards being realistic prices for the foreseeable.

 

[bris]

Buyers like us are ripped off, we are the cash cow where they can make the bigger profits. But we are a smaller market so it has to be worth it to cater to us.

The bigger market but lower margins is the big boys, Dell, Lenovo, Acer etc who buy in the millions but get priority because of the numbers game.

Lets look at Sony for example, they can put together an excellent and powerful PS5 console with an AMD GPU and retail it for £549.

The GPU is comparable to a 5700XT which today still costs around £600.00 so what are Sony paying, £100, £150 it wont be much more but they buy in the millions.

So no manufacturing costs aren't as high as people think but they know they have a niche market in us and can capitalise on it. These companies aren't worth tens of billions for nothing.

 

[Puppetmaster]

Lets look at Sony for example, they can put together an excellent and powerful PS5 console with an AMD GPU and retail it for £549.

Consoles them selves are not designed to make money (can often infact lose money) but the games / services that make all of the £££

 

[DeliciousStorage]

Buyers like us are ripped off, we are the cash cow where they can make the bigger profits. But we are a smaller market so it has to be worth it to cater to us.

The bigger market but lower margins is the big boys, Dell, Lenovo, Acer etc who buy in the millions but get priority because of the numbers game.

Lets look at Sony for example, they can put together an excellent and powerful PS5 console with an AMD GPU and retail it for £549.

The GPU is comparable to a 5700XT which today still costs around £600.00 so what are Sony paying, £100, £150 it wont be much more but they buy in the millions.

So no manufacturing costs aren't as high as people think but they know they have a niche market in us and can capitalise on it. These companies aren't worth tens of billions for nothing.

MSRP for the PS5 is £449.99 (disc) and £359.99 (digital). It only recently started making a small profit on the disc version, at launch it was sold at a loss.

 

[KompuKare]

Consoles them selves are not designed to make money (can often infact lose money) but the games / services that make all of the £££

Thing is how ever much we can speculate, we are never going to get the true BoM and margins which AMD make on those consoles.

To say nothing of the opportunity costs as AMD could use those scares TSMC 7nm wafers for just about any other product and make far better margins.

What we do know is the die size which is 308mm² (so about 17.5mm by 17.6mm) for the PS5.

And we have the last public density defect rate which TSMC made public for 7nm (a good few years ago now) which was 0.09 per cm² (yes, I'd think defects would be in a SI unit but cm is what the wafer calculator uses too).

https://www.anandtech.com/show/16028/better-yield-on-5nm-than-7nm-tsmc-update-on-defect-rates-for-n5

We can take those figures into a die size calculator:
https://caly-technologies.com/die-yield-calculator/
which gives us something like this:

So 133 good dies. There should be some redundancy in the design, but on the other hand Sony were meant to have yield issues possibly because they pushed the clocks to the max just before launch once they realised that Microsoft had gone for a bigger SOC with more CUs.

It is possible that usable dies are far lower than that.

Then the next question is how much does a TSMC 7nm wafer cost?

With the crazy demand, I would expect to still be around $10k even for agreed orders, more for additional last minute (how quickly can we get more) orders.

The raw TSMC cost @ $10k is only about $75; at $15k it would be more like $113.

Then it needs to tested, packed etc. say $15.And we would think that AMD would make a minimum margin on that of 40% (which is extremely low for silicon).

All the other parts cost too. And even if Sony had obtained the best deals ever, 16GB of GDDR6 and fast PCIe 4.0 NVMe drives don't come cheap.

After all that: we still don't know the full story.

What we do know is that a similar sized GPU Navi 22 (RX 6700 XT), should cost a lot less to make than a PS5. No case, no power supply, no NVMe drive, only 12GB of GDDR6, etc.

And it could be sold for less than the PS5. But currently everything AMD can get from TSMC sells out, and while they may be obliged to make console chips (would love to read the details of the deal Sony and MS have with AMD, but we'll never find out), given the choice AMD will make far more profit selling Zen3 with those wafers they have left.

Pitchforks:
Don't just reserve them for miners;
give a though to console buyers too!

 

[HangTime]

Just had a look on the auction site and was surprised to see RTX GPUs have dropped a fair bit. It used to be £750+ for 3060ti, now it is £550+. A lot of 3070ti going for under £700 so certainly a big correction in the used market compared to a couipleof months ago. I think scalping margins are being squeezed because we've not really seen this drops / availability filter through significantly in the brand new market.

To be fair, this might be the LHR factor at work.

 

[4K8KW10]

"It appears that some of the current chip shortages might be artificially induced by one or multiple companies in the chip supply chain, according to an article by TIME Magazine. The article is taking a look at the role TSMC is playing in the global chip production industry and TIME has interviewed TSMC chairman Mark Liu among others in the industry.

Mark Liu is quoted as saying "But I told them, "You are my customer's customer's customer. How could I [prioritize others] and not give you chips?"" when asked about the complaints by car makers, since they were among the first to suggest TSMC was one of the issues. Due to the various allegations against TSMC, Liu had a team collect data points to try and figure out what was going on and to see which customers were truly running low on stock and which customers that might be stockpiling for a rainy day.

The end result of this was that TSMC decided to reallocate some production to customers it deemed to be running out of stock, whereas those that appeared to be sitting on their inventory, for whatever reason. This was apparently not a popular decision, but it seems like a fair one, considering the current situation. Liu is again quoted saying "there are people definitely accumulating chips who-knows-where in the supply chain," suggesting that it might not actually be TSMC's customers that are the issue here, but rather middlemen and distributors that are hoarding chips and pushing up prices.

The article is worth a read if you're interested in a slightly closer look at TSMC, although it doesn't go into any more detail about the chip hoarding. On the other hand, it does look at the geopolitical issues that TSMC and Taiwan faces, while Liu also frowns upon the current US$50 billion budget that President Biden has allocated for new foundries in the US, considering that TSMC is investing twice as much on its own over the next three years."

TSMC Claims Some Companies are Sitting on Chip Inventories

 

[Porker]

So who is price scalping now if cards are some 3x over RRP. is it the retailers? the card manufacturers or chip makers?

 

[4K8KW10]

So who is price scalping now if cards are some 3x over RRP. is it the retailers? the card manufacturers or chip makers?

I don't know. Over here the Radeon RX 6800 XT is not available at all.

 

[CuriousTomCat]

So who is price scalping now if cards are some 3x over RRP. is it the retailers? the card manufacturers or chip makers?

I don't know but they're flying off the shelves. The prices won't come down until stock levels pile up.

Excess stock due to faster production or a lack sales. Or a combination of the two.

I'm refusing to buy a GPU so that's one extra GPU laying on a shelf unsold.