AMD admits to restraining chip supply to keep higher CPU and GPU prices

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Calm down, Intel has a huge glut of good cheap CPUs and AMD has already cut their CPU prices by a lot. It's a great time for CPUs. As far as GPUs - the 4k tier is expensive, yes but 1080p / 1440 is viable and more affordable than ever.
 
But this isn't really news. We already see AMD prices being a bit under what nvidia charges so of course they'll adjust inventory to line up with that.
 
I don't think AMD is generally viewed as the good guy so much as they're viewed as the less bad guy, that's certainly how I view the situation.
There has often been a perception on this forum that AMD is some underdog and champion of the people. And that they are fighting the good fight against big bad Intel and NVIDIA. In truth, AMD does whatever it can get away with. Usually, it can't get away with doing what NVIDIA does because it's behind technologically and has to compete on price. When it doesn't, AMD will charge just as much as Intel or NVIDIA.
 
There has often been a perception on this forum that AMD is some underdog and champion of the people. And that they are fighting the good fight against big bad Intel and NVIDIA. In truth, AMD does whatever it can get away with. Usually, it can't get away with doing what NVIDIA does because it's behind technologically and has to compete on price. When it doesn't, AMD will charge just as much as Intel or NVIDIA.
AMD really changed the landscape when it comes to CPUs especially in the server department by offering more cores during a time when Intel was stagnant. Also AMD unlocked ECC memory in their consumer CPUs which was a game changer for home servers.
Although I agree with another poster who said AMD is sort of the lesser of two evils, nobody can deny these were unexpected positive changes in the market from AMD.

edit: Also I think another reason why AMD is regarded as the lesser of two evils when compared to Nvidia is the fact that Nvidia pushed for CUDA to be proprietary while AMD stuck with the open source OpenCL. Nvidia's marketing and backdoor deals apparently gave them the edge, at least from what I've read...
 
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Price fixing? Say it ain't so...
That’s not price fixing…
That is textbook inventory control.
AMD and Nvidia produce their chips in batches, they can’t just say “oh shit we’re out of that chip that’s selling super well, go print up another 200k of them will ya?”
Their production times are scheduled out a full year in advance and what they make and when they make it is timed and strategically calculated otherwise they risk over or under producing critical parts. So yeah AMD may make 100% of their yearly allotment of GPU chips over a 2 month period but when they are gone that’s it. If they dump them all on day 1 then what? There is a huge oversupply and the price tanks, so they trickle them out as demand dictates to keep the MSRP intact. Otherwise they flood the market and price drops, or they run out too soon and the 3’rd party market has a full year to do what ever they want.
I would say how smart AMD has been with their very limited silicon allotment and production time has been the main reason they have managed to turn themselves around over the last 5 years.
 
You don't understand what "price fixing" is if you think this is price fixing.
Then I do not. I assume it was and obviously was wrong.

That’s not price fixing…
That is textbook inventory control.
AMD and Nvidia produce their chips in batches, they can’t just say “oh shit we’re out of that chip that’s selling super well, go print up another 200k of them will ya?”
Their production times are scheduled out a full year in advance and what they make and when they make it is timed and strategically calculated otherwise they risk over or under producing critical parts. So yeah AMD may make 100% of their yearly allotment of GPU chips over a 2 month period but when they are gone that’s it. If they dump them all on day 1 then what? There is a huge oversupply and the price tanks, so they trickle them out as demand dictates to keep the MSRP intact. Otherwise they flood the market and price drops, or they run out too soon and the 3’rd party market has a full year to do what ever they want.
I would say how smart AMD has been with their very limited silicon allotment and production time has been the main reason they have managed to turn themselves around over the last 5 years.

This is not something I even remotely considered and make sense.
 
There has often been a perception on this forum that AMD is some underdog and champion of the people. And that they are fighting the good fight against big bad Intel and NVIDIA. In truth, AMD does whatever it can get away with. Usually, it can't get away with doing what NVIDIA does because it's behind technologically and has to compete on price. When it doesn't, AMD will charge just as much as Intel or NVIDIA.
I think that's more your perception(and others) just in a different way. Whenever I see a comparison on behaviors that paints Nvidia(or Intel) in a bad light people jump to the conclusion that they think AMD is a saint which is ridiculous because no company is a saint and there's a huge gap between saint and less evil.

Companies are never going to be a good guy but that doesn't mean that we shouldn't acknowledge when one behaves better or worse than their competition. Nvidia and Intel set a pretty low bar so it's not that difficult for AMD to be less bad.
 
Imagine that - a business making a business decision.
This was exactly what I was going to say. One of the main ways companies stay in business is by controlling inventory levels. It's the basic law of supply and demand. If anyone thinks that AMD (a publicly traded company) is going to flood the market with product because they're the "good guys" you're fooling yourself.
 
I wasn't familiar with the term "under shipping" but I guess it means shipping to channel partners less than what end customers are buying (in order to reduce channel inventory). This reduces short term revenue, which explains why they want investors to know about it.
 
That’s not price fixing…
That is textbook inventory control.
AMD and Nvidia produce their chips in batches, they can’t just say “oh shit we’re out of that chip that’s selling super well, go print up another 200k of them will ya?”
Their production times are scheduled out a full year in advance and what they make and when they make it is timed and strategically calculated otherwise they risk over or under producing critical parts. So yeah AMD may make 100% of their yearly allotment of GPU chips over a 2 month period but when they are gone that’s it. If they dump them all on day 1 then what? There is a huge oversupply and the price tanks, so they trickle them out as demand dictates to keep the MSRP intact. Otherwise they flood the market and price drops, or they run out too soon and the 3’rd party market has a full year to do what ever they want.
I would say how smart AMD has been with their very limited silicon allotment and production time has been the main reason they have managed to turn themselves around over the last 5 years.
Clickbait trash. Article could be more actually titled, "AMD Practices Inventory Control Functions that have been Part of Standards and Practices for Hundreds of Years. "
 
Not unless they agreed with Intel, Nvidia, etc., to do so.
There's a video of an AMD rep that knew the 4080 performance before release, then positioned the 7900XTX into the same pricing tier.



Nvidia also began GPU "sell through" in September-October and AMD followed right after.
 
I think under shipping is simply anytime it is hard to buy a product directly from amazon-newegg, it is a simple fact that offer did not fully cover demand:

https://www.fool.com/earnings/call-...ed-micro-devices-amd-q4-2022-earnings-call-t/

Not describing a strategy:

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 does that suggest that 1Q, you think is the bottom on the PC? And then, I had a follow-up.

Lisa Su -- President and Chief Executive Officer


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.

-------------
From a complete ignorant like me, that does not sound like some admission, I cannot find the undership to balance supply and demand part.
 
There's a video of an AMD rep that knew the 4080 performance before release, then positioned the 7900XTX into the same pricing tier.



Nvidia also began GPU "sell through" in September-October and AMD followed right after.

You put that exactly the way it should be - "Product Price Positioning". There is nothing wrong with that.
 
This is not something I even remotely considered and make sense.
To make it even more fun, TSMC has very limited facilities, they make a lot of parts for a lot of people. So they have to further manage schedules because they can’t just switch between different orders from different companies on the fly. There is downtime, maintenance, retooling, and they have to leave room in the schedule if they accidentally botch a run and need to schedule some emergency batches. TSMC has a very full calendar and that’s why they get to charge what they do.
 
There's a video of an AMD rep that knew the 4080 performance before release, then positioned the 7900XTX into the same pricing tier.



Nvidia also began GPU "sell through" in September-October and AMD followed right after.

Well if AMD charged more for a part that performed less that’s just bad. If they charge too much less then they fist guarantee scalpers buy up stock charge right up to the max the performance gap allows for, and fights an investor lawsuit for under valuing their products.

Nvidia and AMD got a pass on this from their investors during COVID because it was unprecedented. They would not be so forgiving should they allow the scalpers free rein again. The fact scalpers we’re able to jack the prices and still move product is all the evidence a judge would need to sign off on that lawsuit.
 
You put that exactly the way it should be - "Product Price Positioning". There is nothing wrong with that.
Having inside knowledge of a competitor product to position your product before their release is wrong.
 
Well if AMD charged more for a part that performed less that’s just bad. If they charge too much less then they fist guarantee scalpers buy up stock charge right up to the max the performance gap allows for, and fights an investor lawsuit for under valuing their products.

Nvidia and AMD got a pass on this from their investors during COVID because it was unprecedented. They would not be so forgiving should they allow the scalpers free rein again. The fact scalpers we’re able to jack the prices and still move product is all the evidence a judge would need to sign off on that lawsuit.
We're paying MSRP scalper pricing to prevent scalping. lol
 
I wasn't familiar with the term "under shipping" but I guess it means shipping to channel partners less than what end customers are buying (in order to reduce channel inventory). This reduces short term revenue, which explains why they want investors to know about it.
Yes it is a common tactic to keep demand high, it’s been proven to improve sales. Artificial scarcity is a proven sales tactic, as it keeps demand and interest higher for longer.
 
Having inside knowledge of a competitor product to position your product before their release is wrong.

In what way exactly? AMD released their product after Nvidia anyways so said you yourself. What law is being broken here?

There's a video of an AMD rep that knew the 4080 performance before release, then positioned the 7900XTX into the same pricing tier.



Nvidia also began GPU "sell through" in September-October and AMD followed right after.
 
We're paying MSRP scalper pricing to prevent scalping. lol
Yeah. It is literally a legal requirement that a publicly traded company charge the most the market will bare for their product. Not doing so is a common cause for lawsuits and CEO removals.
The fact that such a strong 3’rd party market existed during the 2020-2022 timeframe is all the proof a judge would need to rule in favour or the investors should AMD or Nvidia allow that to happen again.
Nvidia was sued and lost that very lawsuit back during their 1000 series when they under valued and over produced their 1060 series.
 
It's AMD, so it's ok.

Weren't the chiplets supposed to lower costs?

Oh, not for us.
Well chiplets finally forced Intel to move on from quad-core CPUs as the standard after being stuck on them for what felt like a decade.
 
how to lose support from your fanbase speedrun.
Doesn't matter. You don't have a choice other than: don't buy a video card or stop playing games. Eventually we're all going to have to get another one. Realistically most can hold out for 3-5 years, but past that point eventually we're all going to have to get another from the limited market or stop playing PC games.

Well, I guess the third option is buy a Mac or otherwise move to ARM, but that also basically means: stop playing games.
 
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