When the Gpu's prices will go down ?

[rare]

Yes it's a combination but i think what peoples issues are, not wanting to speak for others, is that those cost increases contribute such a tiny proportion to the overall cost.

I’m just not sure we know enough about the BOM to suggest the how big or small the uptake in material costs is having. If you look at wafer costs alone they’ve grown massively over time.

Nvidia is almost certainly paying more for its chips to be made than it did historically, charging more for them to AIB’s, then you’ve got bigger coolers etc etc. It all contributes.

Of course, fundamentally Nvidia are trying to maintain their huge margins, and this is undoubtedly the biggest contributor to costs, I’m only highlighting the reality that things are more complex, take more cost to manufacture and so on.

TSMC Will Reportedly Charge $20,000 Per 3nm Wafer

GPUs and SoCs to get more expensive

www.tomshardware.com

 

[Murphy]

Like i said though you only have to look at Nvidia's increase in profits to understand that the extra they're charging customers is not equivalent to what they're being charged.

That it's not a simple it's costing us n% more to make these things so we have to charge you n% more, it's a case of it's costing us n% more so we're going to charge you n% plus extra.

e: Also i attempted to estimate how much the BoM for a 4090 was a few months ago and while it's an estimate I've yet to have someone point out where i may have got things wrong (1, 2, 3). I'd be more than happy for someone to have their own go at estimating what the actual BoM is.

2nd e: Also that link you posted: Yes wafer costs are increasing by you're still only talking about a 17% increase on a wafer where instead of getting, say 100 working dies, you're now getting 120 working dies. Effectively while the cost per wafer maybe going up 17% the cost per die may only increase by 5%.

 

[Jono8]

I’m just not sure we know enough about the BOM to suggest the how big or small the uptake in material costs is having. If you look at wafer costs alone they’ve grown massively over time.

Nvidia is almost certainly paying more for its chips to be made than it did historically, charging more for them to AIB’s, then you’ve got bigger coolers etc etc. It all contributes.

Of course, fundamentally Nvidia are trying to maintain their huge margins, and this is undoubtedly the biggest contributor to costs, I’m only highlighting the reality that things are more complex, take more cost to manufacture and so on.

TSMC Will Reportedly Charge $20,000 Per 3nm Wafer

GPUs and SoCs to get more expensive

www.tomshardware.com

This is why i don't like to expect silly low prices.

In all honesty, i have zero clue how much it actually costs them to make these and how much margin they are making compared to before.

It does seem to be that they are seriously taking the **** this generation though with sticking the cards down a tier number wise but putting he price up per tier.

If they had just released a similar line up to the 3xxx series and stuck an extra 10% on due to inflation people likely wouldn't be so annoyed.

 

[Alt0153]

This is why i don't like to expect silly low prices.

In all honesty, i have zero clue how much it actually costs them to make these and how much margin they are making compared to before.

It does seem to be that they are seriously taking the **** this generation though with sticking the cards down a tier number wise but putting he price up per tier.

If they had just released a similar line up to the 3xxx series and stuck an extra 10% on due to inflation people likely wouldn't be so annoyed.

all you need to know about how much it costs them to make is look at their silly profit margins

 

[Jono8]

all you need to know about how much it costs them to make is look at their silly profit margins

Where are these figures available from with R&D taken into account etc?

 

[Alt0153]

Where are these figures available from with R&D taken into account etc?

go look if you care enough, try google.com

 

[Murphy]

Where are these figures available from with R&D taken into account etc?

R&D spend isn't paid back with today's profits, it's an investment in the future. If a company said you had to pay 50% more because they need to R&D for a product that may or may not, depending on how successful that R&D is, come out ten years from now would you buy what they're selling?

 

[Jono8]

R&D spend isn't recuperate with today's spend, it's an investment in the future. If a company said you had to pay 50% more because they need to R&D for a product that may or may not, depending on how successful that R&D is, come out ten years from now would you buy what they're selling?

Well it has to be factored in surely.

A GPU cant be designed and developed for free

 

[Murphy]

Well it has to be factored in surely.

A GPU cant be designed and developed for free

Yes but that's for investors to pay for and future customers to pay back if that R&D results in something people are willing to buy.

 

[rare]

Yes but that's for investors to pay for and future customers to pay back if that R&D results in something people are willing to buy.

That’s not how it works in reality, a product has to carry all of its own costs, you don’t offset R&D to investors or you won’t have very happy investors for very long.

I work for a company that creates products and I’ve been involved directly with business cases, a product has to carry the costs it took to research, design and manufacturer. In respect to a GPU generation, each one will surely have a team developing them for years, you can’t offset these costs ten years away it has to be paid for.

 

[KungFuSpaghetti]

Ultimately they are priced badly, which is why no one is buying them. That can't go on like this forever, at some point something has to give. They can dig in and hold the prices for only so long before they have to start shifting stock. The fact the FE models like the 4080 have been permanently in stock is bad for nvidia, the 4070 is still in stock now which says it all really.

 

[Jono8]

Ultimately they are priced badly, which is why no one is buying them. That can't go on like this forever, at some point something has to give. They can dig in and hold the prices for only so long before they have to start shifting stock. The fact the FE models like the 4080 have been permanently in stock is bad for nvidia, the 4070 is still in stock now which says it all really.

I don't think them being in stock is necessarily an indicator. The AMOUNT of stock is probably a better thing to look at.

I mean, GPUs being in stock is normal - we just only remember the recent few years when they were primarily bought as money printers rather than gaming cards.

I agree that they are priced badly though ofcourse.

 

[Alt0153]

I don't think them being in stock is necessarily an indicator. The AMOUNT of stock is probably a better thing to look at.

I mean, GPUs being in stock is normal - we just only remember the recent few years when they were primarily bought as money printers rather than gaming cards.

I agree that they are priced badly though ofcourse.

anyone member the many years of cards always being in stock? im pretty sure as a gamer from 1998-2020 stuff was only in stock, only covid and mining had things going out of stock, didnt take long before people seem to think if its not constantly out of stock its ****

 

[CuriousTomCat]

Nvidia's gross margin has increased by 6% in the last 10 years to account for the higher costs of expenses. Once you deduct expenses and look at the net margin, It's about the same as it was 12 years ago.

Nvidia gross margin on 2023-01-31 - 56.93%
Nvidia gross margin on 2011-10-31 - 50.70%

Nvidia net margin in 2023-01-31 - 16.19%
Nvidia net margin in 2011-10-31 - 16.20%

 

[Jono8]

anyone member the many years of cards always being in stock? im pretty sure as a gamer from 1998-2020 stuff was only in stock, only covid and mining had things going out of stock, didnt take long before people seem to think if its not constantly out of stock its ****

Yeh, cards being in stock doesn't mean they aren't selling.

The 4070 is clearly struggling though as the stock numbers on some sites for the cheap models are pretty large.

Also, you don't drop them £40 - £50 within a week if you aren't concerned about them selling.

 

[Calin Banc]

On a quick google :

NVIDIA annual net income/loss for 2023 was $4.368B, a 55.21% decline from 2022. NVIDIA annual net income/loss for 2022 was $9.752B, a 125.12% increase from 2021. NVIDIA annual net income/loss for 2021 was $4.332B, a 54.94% increase from 2020.

So basically nvidia,in 2022, came back to about the same profit as before Covid, maximum mining bubble, etc.

In 2011, if this is correct, it made only $0.637B.
Anyway, looking at the graphic, it appears to increase seriously from 2017 onwards, about the time of last mining bubble, turing, etc. After all, there's one thing 16% out of $500 and another from $1500 or more.





LE: net profit margin went even to 36-37+% and it kinda looks the same as the total profit started to increase.

NVIDIA Net Income 2010-2024 | NVDA

NVIDIA annual/quarterly net income history and growth rate from 2010 to 2024. Net income can be defined as company's net profit or loss after all revenues, income items, and expenses have been accounted for. <ul style='margin-top:10px;'> <li>NVIDIA net income for the quarter...

www.macrotrends.net

 

[Murphy]

That’s not how it works in reality, a product has to carry all of its own costs, you don’t offset R&D to investors or you won’t have very happy investors for very long.

I work for a company that creates products and I’ve been involved directly with business cases, a product has to carry the costs it took to research, design and manufacturer. In respect to a GPU generation, each one will surely have a team developing them for years, you can’t offset these costs ten years away it has to be paid for.

Offsetting the cost of R&D on a product is entirely different than where the R&D costs come from. People who bought Bulldozer didn't pay for the R&D cost of Ryzen, investors paid for it and investors are reaping the reward for those investments in the form of dividends on shares.

Today's customers don't pay for the R&D of tomorrows product.

 

[Joxeon]

Yeh, cards being in stock doesn't mean they aren't selling.

The 4070 is clearly struggling though as the stock numbers on some sites for the cheap models are pretty large.

Also, you don't drop them £40 - £50 within a week if you aren't concerned about them selling.

Even before the pandemic/ mining a new gpu release would typically always sell out at launch and take a few weeks to a month before they stayed in stock.

 

[Raelgun]

They contribute to the retail price.

They always have in the past, it doesn't mean that got more expensive.

It's only Nvidia hiking prices because of the shortage we were in which we aren't any more.

 

[DarrenM343]

Offsetting the cost of R&D on a product is entirely different than where the R&D costs come from. People who bought Bulldozer didn't pay for the R&D cost of Ryzen, investors paid for it and investors are reaping the reward for those investments in the form of dividends on shares.

Today's customers don't pay for the R&D of tomorrows product.

Without profit there's no business. Without profit per unit sold there's limited R&D budget without debt which of course eventually needs to be repaid. So, yes, Bulldozer buyers did help pay for future R&D, as did 1st Gen Ryzen buyers help fund future R&D on Ryzen.
AMD doesn't pay a dividend to investors. Most U.S tech stocks don't.
Investors are taking a risk on the company that their profit (after all costs) will increase and the company will be worth more in future. If a company spends less on R&D then in the short term yes that means a profit spike but longer term likely a decline. Investors in AMD are betting that with all costs included(including R&D), the company will grow.
AMD can own, buy or sell it's own stock, or issue new stock to raise cash. However, issuing new stock effectively dilutes the holdings investors have. Nobody would invest much into a company however if it were to issue a lot of new stock constantly to solely raise cash for R&D