from the invisible-hand-is-giving-you-the-invisible-finger dept.
AMD CEO Says It's Limiting Supply of CPUs and GPUs to Maintain High Prices
AMD CEO Says It's Limiting Supply of CPUs and GPUs to Maintain High Prices:
[...] The somewhat startling admission came during the company's quarterly earnings call. AMD is doing quite well despite the industry downturn. It reported 42% year-over-year growth in its data center products. Intel reported a drop of 33% YoY for its data center chips, so the contrast is remarkable. For client PC and gaming, however, AMD is also feeling some pain. It reported a 51% decline YoY in processor shipments. This led to a loss of $152 million compared with a profit of $530 million a year ago, according to Yahoo.
But even though AMD's consumer and gaming revenues are tanking, it's still found a way to keep the numbers up through that old chestnut: supply and demand. According to remarks noted by PCGamer, Dr. Su says it's been limiting supply and will continue to do so. "We have been undershipping the sell-through or consumption for the last two quarters," said AMD's CEO. "We undershipped in Q3, we undershipped in Q4. We will undership, to a lesser extent, in Q1."
It's an interesting admission that explains why CPU and GPU prices haven't crashed along with the PC market. It makes us wonder if Nvidia is doing something similar. Although some decent deals on GPUs appeared a few months ago before AMD and Nvidia launched new architectures, those deals have now vanished.
AMD Admits to Restraining Chip Supply to Keep Higher CPU and GPU Prices
"We undershipped in Q3, we undershipped in Q4," Su told investors:
Gamers have been lamenting about the high prices of graphics cards for what seems like forever. We all got excited when crypto mining became obsolete, just knowing that we were finally going to see prices come down, but for the most part, they haven't. The latest GPUs are still out of reach for the average consumer, and even older cards are holding their value.
If you haven't noticed, the tech industry is suffering a significant contraction. Executives are panicking as they try to pinch pennies with layoffs and other measures to keep investors happy. One of those "other measures" is restraining product supply.
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]."
Many hardware companies got used to the high demand caused by the pandemic and the crypto boom. Now that both driving factors are ebbing, companies are finding themselves with a surplus of inventory and are trying to tip the scale to keep their numbers up for investors.
[...] But AMD is not the only culprit trying to stave off a few bad quarters. We saw a similar move this week with Sony.
On Tuesday, leakers said Sony was cutting shipments of its new PS VR2 by 50 percent. Last year, the company told investors it expected to ship two million PS VR2s in Q1 2023. Now, it doesn't think it can break the two million unit barrier until late 2023 or early 2024.
However, Nvidia beat both of them to the punch. In November, CFO Colette Kress told investors that the company was combating declining demand by lowering shipments.
"We still see gaming is solid, and we're continuing to watch each and every day in terms of the sell-through that we're seeing," Kress said. "So we have been undershipping. We have been undershipping gaming at this time so that we can correct that inventory that is out in the channel [sic]."
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Intel Cuts Pay to Cut Costs
New intel from Intel says that some employees at the company will be taking a pay cut—even the CEO.
Layoffs are ravaging the tech industry due to the wildly abstract threat posed by "the economy," but Intel is taking a different approach. Instead of laying off thousands of its workforce, the company has seemingly decided to make sweeping pay cuts from 5% to 25%.
Dylan Patel first reported on the pay cuts in his newsletter SemiAnalysis yesterday. Patel says that multiple employees have relayed to him that Intel is looking to cut costs to meet its quarterly dividend, and some employees are the ones footing the bill. According to a source within Intel, employees below and including Principal Engineer will be receiving a 5% pay cut with the exception of hourly and junior-level employees, who will not be affected by the cuts. Glassdoor and a Google Jobs posting reveal that Principal Engineers can make upwards of $170,000 at a minimum.
Likewise, VPs are taking a 10% hit, the executive leadership team is taking a 15% cut, and CEO Pat Geslinger will cut his salary by 25%. In addition to the pay cuts, there will be no quarterly or annual bonuses for now, merit-based raises are paused, and 401k match is is being reduced from 5% to 2.5%. Intel is still reportedly planning to lay off several hundred employees in California according to local media, which is still drastically less than other tech companies.
And it isn't only pay that is being cut...
(Score: 5, Informative) by takyon on Friday February 03, @11:10AM (12 children)
I saw some anger about this on Phoronix, but it's not a big deal.
In CPUs, Epyc server/datacenter chips are far more important to AMD. Several product lines are sharing the same wafer capacity and chiplets. Zen 4 CPU prices have come down because of low demand for AM5 and competition from Intel. The high margins on those CPUs allowed AMD to offer deep discounts and eat the cost of free RAM kits, etc. It looks like Zen 3 will stick around longer than previous generation chips, at decent prices. Sure, everything could be even cheaper, but recent months have been a great time to buy a CPU... for USians at least.
GPUs are also sharing the same (limited? [tomshardware.com]) wafers. There's no real chiplet dynamic yet, since RDNA 3 graphics compute dies (GCDs) are too specific. Unlike Epyc/Ryzen, the GCD used in 7900 XTX and XT has nothing to do with an Instinct MI300, and upcoming models like 7800/7700/7600 will also use different GCDs.
AMD and Nvidia want to avoid an oversupply situation [tomshardware.com] which can cause problems for quarters or even year(s). Unfortunately, they have snuffed out the low-margin sub-$100 GPUs you took for granted. Even sub-$200 doesn't look too good, as 6500 XT and 6600 prices have risen lately. Those are the models I've noticed that seem to be affected by this undershipping.
Solutions? Try the used market. Don't buy what you don't need. Just Wait™. Pray for Intel to not suck.
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(Score: 3, Insightful) by Snospar on Friday February 03, @11:46AM (9 children)
I'm disgusted with this type of behaviour, pissing off your customers to keep your investors happy. Pretty soon the lack of customers will piss off the investors a lot more.
AMD has always played second fiddle to Intel, despite having top quality chips as far as I can tell. They do a lot in terms of price points to try and sway people away from Intel but there are a lot of people on the fence who will read this type of news and think "Fuck AMD" I'll stick with Intel. AMD success seems to dip and rise in terms of these bad press incidents far more than it does on it's component quality.
(Score: 2, Insightful) by shrewdsheep on Friday February 03, @12:56PM (1 child)
The market is clearly failing. AMD could eat into Intel's market share but they don't. Not enough competition.
(Score: 4, Insightful) by higuita on Friday February 03, @05:05PM
they would love to do that, but big players (dell, hp lenovo) take a long time to release hardware with AMD and usually very conservative numbers... intel have still good products and competitive prices and high power inside those companies
Open market, just check most of the being sold computers, most of the are intel, not amd
Servers AMD was able to grow a lot, but intel is still the king
power users are the ones where AMD won lot of share
but increasing stock is a risk, intel released good cpus still and the battle is hard, both in performance, price and power usage. you also have a potential economic crisis building up, you don't want to have big stock in a collapsing economy, more stock isn't always the same as more sold units, so AMD, already learned for past mistakes, isn't taking many risks, while it would love to increase the market share, they know that it takes time to change the market and product development cycles and that in crisis times, computer sales drop (even more)
(Score: 3, Interesting) by takyon on Friday February 03, @02:49PM (2 children)
This particular piece of news is inside baseball. The real grumbling is about:
I think the complaints about AMD's CPUs are mostly unwarranted. Zen 3 is doing fine, and they are improving the Zen 4 and AM5 situation.
There's always something going wrong with AMD's GPU strategy.
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(Score: 2) by higuita on Friday February 03, @05:12PM (1 child)
The race to the top place in GPU is getting crazy, with so high power usage, even small problems get bigger
AMD software is today much better than 10 years ago... yes, nvidia had good drivers 10 years ago, but amd also have them now... of course, new cards always need a few cycles of bug and optimizations fixes
Finally, the AM5, being a totally new board and memory, it is the always the chicken and egg problem, higher prices, lower demand, less are build, keep the price high, keep the demand low.
with the performance of all modern CPU being good already, and economic crisis building up, people aren't rushing to buy new hardware... even if you buy a cpu, with those GPU prices and power usages, people think twice if it worth or if they wait a few more months/year
Top performance is good, but most of the people want middle class hardware
(Score: 2) by takyon on Friday February 03, @07:34PM
It's stalling out at the 450 Watt to 600 Watt range, thankfully, and even the RTX 4090 will not use 450 Watts most of the time [hardwaretimes.com] because it doesn't need to run at 100%.
Yup, AM5 is fine and will get better. X3D will reinvigorate interest, A620 motherboards will bring the platform cost down, then desktop APUs and Zen 5 will bring it home.
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(Score: 3, Insightful) by SomeRandomGeek on Friday February 03, @04:56PM (1 child)
I suppose it really depends what "undership" means. It is not a euphemism I'm familiar with. If I understand correctly, "overproduce" would be a better description. AMD had a business plan to sell a certain number of units at a certain price, which would give them a certain profit. They made that number of units and sold less than that. So, now they have warehouses full of unsold units. Rather than cut prices and sell those units, they choose to leave prices the same, and presumably reduce future production while they wait for their excess inventory to clear out. None of this implies any kind of disgusting behavior. In particular, it doesn't say anything about how the price they charge for a unit relates to what they spend to build it. If you build too many of something that does not put you under any moral obligation to give away the extras.
(Score: 3, Insightful) by sjames on Sunday February 05, @09:24PM
No, but a healthy market with real competition is supposed to force your hand to sell at closer to the marginal cost of production. We don't have very many healthy markets any more.
(Score: 3, Insightful) by mcgrew on Friday February 03, @08:51PM
To a CEO, Things Go Better With Coke. And I'm not talking about soda pop, I'm talking about a drug everybody in every board room uses that removes any trace of empathy and causes massive greed and selfishness. It's been like that since Ronald Reagan.
Carbon, The only element in the known universe to ever gain sentience
(Score: 2) by takyon on Saturday February 04, @06:40AM
https://www.youtube.com/watch?v=pvQBcVoBrGM&t=5415s [youtube.com]
Clickbait'd
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(Score: 2) by Freeman on Friday February 03, @05:23PM (1 child)
It's looking like a better and better time for Intel to have started offering their GPUs. Yes, they have issues, but a lot of it is driver related. From what I've heard, their driver updates have made things a lot better over the short time period the GPUs have been available. It may be a good time to hop on the Intel GPU bandwagon. What with Intel's recent price cut: https://arstechnica.com/gadgets/2023/02/intel-cuts-arc-a750-gpus-price-while-boasting-about-driver-optimizations/ [arstechnica.com]
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 2) by takyon on Friday February 03, @08:16PM
Intel AXG [tomshardware.com] is a story of missed opportunity. They only made around 4 million Arc Alchemist GPUs in February 2022 and let them sit in a warehouse, completely missing the period of sky high prices. About 40-50 million [tomshardware.com] discrete GPUs are sold per year.
This week, they have an official price cut to the A750 and driver improvements being highlighted by reviewers. It could almost be considered a relaunch, but AFAIK they aren't making more of these (Alchemist). They just want to clear out existing inventory, and they are likely selling them at cost or a loss. From reading Slickdeals, the reception still seems pretty bad.
Rumor is they will target the low end again with Battlemage. Could be nice, maybe they won't abandon dGPUs, stay tuned.
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(Score: 0) by Anonymous Coward on Friday February 03, @01:33PM (9 children)
But if customers who want to buy AMD stuff can't buy them, then is undership an euphemism for sending their customers to Intel and Nvidia? 😉
(Score: 0) by Anonymous Coward on Friday February 03, @02:01PM
I'm not familiar with all the euphemisms marketeers use, but doesn't the "under" in undershipping at least imply that they are shipping fewer units than are needed?
(Score: 3, Insightful) by RamiK on Friday February 03, @04:03PM (7 children)
If AMD is under-shipping while Intel is cancelling releases at the same time, it usually means a cartel.
Having said that, this isn't the case here. We all knew this was coming for quite a few years since computers genuinely stopped getting faster for everyday use (and even for gaming*). COVID spurred a demand for Zoom meetings and working-from-home needs... And Oct,2025 will see Windows 10 EoL so that will drive up sales since Win11 doesn't support older hardware... But fundamentally, the "My computer is too slow so I need a new one" demand is gone for good and will only see odd fluctuations in the coming years.
*1080p was 65% of steam users in 2020 ( https://lordsofgaming.net/2020/09/over-65-of-pc-users-are-still-playing-in-1080p-according-to-steam-survey/ [lordsofgaming.net] ) and remains 65% in 2023: https://store.steampowered.com/hwsurvey/Steam-Hardware-Software-Survey-Welcome-to-Steam [steampowered.com]
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(Score: 0) by Anonymous Coward on Friday February 03, @05:20PM (6 children)
But my old PC is more than 5 years old...
(Score: 2) by RamiK on Friday February 03, @06:39PM (5 children)
I don't know what you were using before, but even Intel's own replacement cycle assessment stands on 6.5 years and is being criticized as detached from reality: https://www.semianalysis.com/p/intel-roadmap-and-pc-tam-update-tone [semianalysis.com]
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(Score: 0) by Anonymous Coward on Friday February 03, @06:55PM (4 children)
My old desktop was an i7-4770 probably around 2013? Work laptop is i5 from about 2011 and my ryzen desktop is at least 3-4 times faster than that for single threaded excel stuff.
However the latest Excel seems buggy and gets really slow (maybe something wrong with their undo system now?), so I actually used Excel 2010 in a VM in order to get stuff done faster (yes it's faster even though it's in a VM).
What Intel/AMD giveth Microsoft taketh away...
(Score: 2) by RamiK on Friday February 03, @07:26PM (3 children)
Bringing excel down to a crawl isn't average Joe's idea of everyday use. Even accountants don't work on sheets that big daily... Maybe data-scientists? But everyday... I doubt that.
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(Score: 0) by Anonymous Coward on Saturday February 04, @02:53AM (2 children)
(Score: 3, Insightful) by RamiK on Saturday February 04, @03:58AM (1 child)
What am I, tech support? File a bug report with Microsoft. Google suggests this: https://feedbackportal.microsoft.com/feedback/forum/c23f3b77-f01b-ec11-b6e7-0022481f8472 [microsoft.com]
As a follow up to this: https://answers.microsoft.com/en-us/msoffice/forum/all/how-do-i-report-an-excel-bug/f6e82fa0-542d-4b5d-822e-50917ae47a66 [microsoft.com]
Though it seems the more standard method involves the Feedback Hub: https://support.microsoft.com/en-us/windows/send-feedback-to-microsoft-with-the-feedback-hub-app-f59187f8-8739-22d6-ba93-f66612949332 [microsoft.com]
Though if being honest, between experiencing bugs and the availability of LibreOffice and pyspread, I'm not quite sure why you're sticking with Excel in the first place.
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(Score: 1, Funny) by Anonymous Coward on Monday February 06, @08:48AM
Thanks for the tech support.
(Score: 2) by richtopia on Friday February 03, @04:20PM
Basic economics at play in the GPU market, nothing exciting in the announcement from Lisa Su.
What we haven't seen is new GPUs delivered in the entry level market. One strategy of mitigating this would be lowering prices on existing products, however AMD and NVIDIA's reduction in shipments can keep prices elevated. Another would be a dedicated product for the low end. Intel is the only vendor I know of with a recent new GPU covering the sub-$200 market segment. As the drivers mature, this can be a real opportunity for Intel to finally make in-roads in the GPU space.
Low-end might not be sexy, but low end ships in volume. There are plenty of examples of vendors squeezing into entry level products and eventually becoming market titans.
(Score: 3, Insightful) by higuita on Friday February 03, @04:50PM
> 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."
This is simple bad journalism, giving one explanation as the only correct one, where there are several other reasons for that, even other with much higher change of being the true reason.
While that can be a valid justification, this one is just a click bait, another reasons is the drop in sales and risk of economic crisis. Balance the production for the demand is required, as you don't want to have a huge stock of expensive CPU and GPU if the crisis increase and sales drop even more. We are not in a economic stable time were companies can increase stocks to try to increase sales, almost all companies are being cautions about excess stock and excess personal, that is why many companies are doing layoffs, not that they don't have money now, but they don't want to be out of money in a few months if things gets worse and sales drop.
Not also the crisis, Intel and Nvidia can release new hardware that can undercut AMD, competition in CPU and GPU markets is very hard and both intel and nvidia can have hardware that can mess AMD position and even worse, play dirty (as both have done in the past) to undercut AMD market. again, bit stocks are risky... bigger stock can increase sales, but have higher risk too. AMD would love to increase market share, but it is unknown if you order 2x more CPU and GPU, when they arrive in a few months, you will be able to sell them, so yes, it is a really hard balance to maintain to not increase the risk too much
(Score: 2) by DannyB on Friday February 03, @04:54PM (2 children)
Imagine a future where there are many producers of competing chips that all run a compatible instruction set. Chip implementations may differ but instruction sets are compatible and have compatible extension subsets.
How often should I have my memory checked? I used to know but...
(Score: 3, Interesting) by DannyB on Friday February 03, @05:00PM (1 child)
That reminds me . . . In unrelated news [infoworld.com], Java 19 has a RISC V port, for RV64GV configuration, and only for the Linux OS so far.
Will AMD or Intel make RISC V parts?
How often should I have my memory checked? I used to know but...
(Score: 4, Insightful) by bzipitidoo on Friday February 03, @10:09PM
I would love to ditch x86, and every year, that's looking more and more feasible. I get the impression toolchains are mostly independent of CPU architecture now. Also, now enough essential tools and quite a few other nice-to-have apps are open source, and have been made portable, so the toolchain can build everything you need, targeting almost any arch desired. Even the Linux kernel has been ported to all kinds of hardware. I don't know just when that was accomplished, perhaps back in the days of version 2.0? Originally, the kernel was x86 only, wasn't it?
The remaining problems with RISC-V are price, and slowness particularly of graphics. Can a RISC-V system use a PCI-Express bus? If yes, can such a RISC-V system use a dedicated graphics card plugged into a PCI-Express slot? Alternatively, what does RISC-V have in the way of integrated graphics? From what I read, there is at this time nothing ready. There are a number of projects in the works though.
(Score: 2) by zzarko on Saturday February 04, @09:55AM
"This led to a loss of $152 million compared with a profit of $530 million a year ago"...
So, does this mean that they EARNED $378 millions and not LOST 152? I hate this kind of statistic/disinformation bullshit... I so feel their pain...
C64 BASIC: 1 a=rnd(-52028):fori=1to8:a=rnd(1):next:fori=1to5:?chr$(rnd(1)*26+65);:next