AMD Processor Shortage to Continue as 80% 7nm Capacity Allocated to Console SoCs

Status
Not open for further replies.

Aurelius

2[H]4U
Joined
Mar 22, 2003
Messages
3,065
This is a friendly reminder that, while PC gamers often imagine themselves the center of the universe, it's console gaming that dominates in terms of sheer numbers.

(I do hope AMD can take care of all sides well, but there's no doubt that it has to supply Microsoft and Sony first.)
 
Last edited:

DukenukemX

Supreme [H]ardness
Joined
Jan 30, 2005
Messages
5,215
This is a friendly reminder that, while PC gamers often imagine themselves the center of the universe, it's console gaming that dominates in terms of sheer numbers.

(I do hope AMD can take care of all sides well, but there's no doubt that it has to supply Microsoft and Sony first.)
This also shows who AMD has aligned themselves to since 2013. Fact is Sony and Microsoft have paid a lot of money to get AMD to produce their hardware, and due to demand with the market recently, Sony and Microsoft want priority in manufacturing. This doesn't mean console gaming is dominate at all, just that Sony and Microsoft have more leverage. Considering how nobody can buy a RTX 3000's card or any piece of PC hardware, I'd say that PC sales are through the roof. People are going as far as to buy old PC hardware. AMD has an obligation to Sony and Microsoft despite weather or not their 7nm production is more profitable on PC, which it certainly is.
 

luisxd

Limp Gawd
Joined
Nov 26, 2014
Messages
151
Damn. I've been wanting to sell my current laptop and get a new desktop build but this GPU shortage has been a great obstacle, seems I'll have to wait, I hate waiting.
 

deruberhanyok

[H]ard|Gawd
Joined
Aug 22, 2004
Messages
1,863
more profitable on PC, which it certainly is.

i hear a lot of this right now but no one has any way to really back it up.

has anyone measured size of the new Xbox/ps5 chips compared to the new gpus? If we assume they just pay raw silicon cost and the complexity of the processor doesn’t factor in to it, then we could calculate number of chips per wafer, factor in the failure rate and maybe get an idea as to which is actually more profitable.

I assume, for instance, unless a 6900xt is more than double the size of an Xbox soc, there may be more profit selling one of those at $1000 than an Xbox at $500, but it depends on the size of board partners and retailer cut. But it’s also not going to sell in the same quantity.
 

DukenukemX

Supreme [H]ardness
Joined
Jan 30, 2005
Messages
5,215
i hear a lot of this right now but no one has any way to really back it up.

has anyone measured size of the new Xbox/ps5 chips compared to the new gpus? If we assume they just pay raw silicon cost and the complexity of the processor doesn’t factor in to it, then we could calculate number of chips per wafer, factor in the failure rate and maybe get an idea as to which is actually more profitable.

I assume, for instance, unless a 6900xt is more than double the size of an Xbox soc, there may be more profit selling one of those at $1000 than an Xbox at $500, but it depends on the size of board partners and retailer cut. But it’s also not going to sell in the same quantity.
From what I understand, the margins on console hardware is extremely low. Though the idea is that it makes up for it in volume sold. Right now though a single CPU or GPU makes more money for AMD than a PS5 or XSX.

Well after decades of pc gaming and how crazy trying to get a new GPU is I gave in to the dark side and purchase a PS5 and xbox series s :unsure:
Gentlemen, it's been an honor being part of the pc masta race
Get a GTX 1060 and you'll have the equivalent of a PS5.
 

Aireoth

Supreme [H]ardness
Joined
Oct 12, 2005
Messages
4,690
i hear a lot of this right now but no one has any way to really back it up.

has anyone measured size of the new Xbox/ps5 chips compared to the new gpus? If we assume they just pay raw silicon cost and the complexity of the processor doesn’t factor in to it, then we could calculate number of chips per wafer, factor in the failure rate and maybe get an idea as to which is actually more profitable.

I assume, for instance, unless a 6900xt is more than double the size of an Xbox soc, there may be more profit selling one of those at $1000 than an Xbox at $500, but it depends on the size of board partners and retailer cut. But it’s also not going to sell in the same quantity.

You have to be soft in the head to not understand that margins will be massively higher for a parts manufacturer on a single GPU over an entire console.

Units shipped can only do so much, and AMD is only a fraction of that $500 console.
 

Aurelius

2[H]4U
Joined
Mar 22, 2003
Messages
3,065
This also shows who AMD has aligned themselves to since 2013. Fact is Sony and Microsoft have paid a lot of money to get AMD to produce their hardware, and due to demand with the market recently, Sony and Microsoft want priority in manufacturing. This doesn't mean console gaming is dominate at all, just that Sony and Microsoft have more leverage. Considering how nobody can buy a RTX 3000's card or any piece of PC hardware, I'd say that PC sales are through the roof. People are going as far as to buy old PC hardware. AMD has an obligation to Sony and Microsoft despite weather or not their 7nm production is more profitable on PC, which it certainly is.

Just because PC sales are high doesn't mean PC gaming is dominant. Many, if not most, PCs aren't used for gaming. They're the $300 PC someone bought to check email, the $500 office PC, the $1,000 ultraportable. The average selling price of a PC in 2019 was $632, and it's unlikely to have gone up significantly in 2020 (I'd get 2020 figures, but they're not available and might not be for a few weeks). Hell, you yourself admitted that people are buying old PCs... those sales are higher largely because people need to work from home, not because they want an Escape From Tarkov rig.

You'd need to specifically show the volume of enthusiast-oriented CPUs and GPU sales, and even then you'd have to accept that some of those sales went to non-gaming purposes. Remember, many of those GPU sales are going to crypto miners as of late.

The PC gaming industry is big, but it doesn't necessarily dictate the market. Every console is guaranteed to be used for gaming, however, and I find it telling that almost all major games get console releases in addition to PC versions. You ignore the console market at your peril.
 

deruberhanyok

[H]ard|Gawd
Joined
Aug 22, 2004
Messages
1,863
You have to be soft in the head to not understand that margins will be massively higher for a parts manufacturer on a single GPU over an entire console.

Units shipped can only do so much, and AMD is only a fraction of that $500 console.

I did say it’s very likely that the revenue is higher on a large gpu than a console soc.

but unless you have the numbers in front of us from AMD, partner and retailer financials, no one knows how much.

my point is - let’s say they ship a million 6900xt cards and the consoles reach 100 million combined. Unless the profit on the GPU is 100 times the profit on the console, there’s no way it’s even close. In volume.
 

DukenukemX

Supreme [H]ardness
Joined
Jan 30, 2005
Messages
5,215
Just because PC sales are high doesn't mean PC gaming is dominant.
Just because console sales are high doesn't mean consoles are dominant either. Everything is selling quicker than people can buy them due to COVID.
The average selling price of a PC in 2019 was $632, and it's unlikely to have gone up significantly in 2020 (I'd get 2020 figures, but they're not available and might not be for a few weeks).
2020 was a hell of a year. Anything gaming related has sold more in 2020, including consoles.
Hell, you yourself admitted that people are buying old PCs... those sales are higher largely because people need to work from home, not because they want an Escape From Tarkov rig.
Old gaming PCs. I doubt someone who works from home needs a GTX 970.

my point is - let’s say they ship a million 6900xt cards and the consoles reach 100 million combined. Unless the profit on the GPU is 100 times the profit on the console, there’s no way it’s even close. In volume.
It took 6 years for the PS4 to reach 100 million and Xbox One has not sold more than 50 million. AMD still makes a good chunk of money from consoles but considering the demand on GPU's on the PC side of things, the only reason AMD is shifting their manufacturing to Sony and Microsoft is because they have an agreement. Either that or Sony and Microsoft are paying them more.
 

deruberhanyok

[H]ard|Gawd
Joined
Aug 22, 2004
Messages
1,863
the GPUs will sell, but the consoles will sell in far greater quantity, so it’s beneficial for them to get more of those parts out there than discrete gpus.

sales numbers estimate more than 5 million of the new consoles already out there. That’s a lot of product delivered and revenue received.

(Source: https://www.notebookcheck.net/PS5-v...est-selling-console-of-them-all.511005.0.html)

I don’t know if anyone has posted sales numbers for GPUs (I’ve seen market share numbers but nothing on actual quantities sold), but AMD basically survived off the revenue from ps4/Xbox one for a while there. So I wouldn’t underestimate the amount of revenue those console sales bring.
 

NKD

[H]F Junkie
Joined
Aug 26, 2007
Messages
8,414
Zen 3 has been coming in and out of stock often though. I think AMD has been mostly pushing 5600x and 5800x as they are likely to sell the most anyways. 5900x and 5950x don't come in stock as often. I have gotten a few on those but 5600x and 5800x have been plenty lately. If you have notifications set you will be surprised how often they come in and go. Zen 3 is certainly taking priority. Consoles will calm down though in to q1.
 

Mega6

2[H]4U
Joined
Aug 13, 2017
Messages
3,400
The only reason AMD (or any company for that matter) would produce a lower margin product over a higher margin product is because of a contractual agreement. No doubt this is what we have here. AMD lived off of consoles in the dark days and has benefited quite well from console technology development with MS and Sony. The price of that benefit on the current platforms is a know production goal (contract as it be) made more than a year ago. This is the downside of not having your own fabs. TSMC has no more capacity left and AMD cannot just like that ask for more. Moving to a new fab, say Samsung for instance would take a lot of time, money and effort to port over chip designs to the Samsung process node. Samsung may not have any capacity either, Automobiles for example are now being held up because of chip shortages. Its everywhere.
 

KATEKATEKATE

Limp Gawd
Joined
Jan 20, 2019
Messages
495
i hear a lot of this right now but no one has any way to really back it up.

has anyone measured size of the new Xbox/ps5 chips compared to the new gpus? If we assume they just pay raw silicon cost and the complexity of the processor doesn’t factor in to it, then we could calculate number of chips per wafer, factor in the failure rate and maybe get an idea as to which is actually more profitable.

I assume, for instance, unless a 6900xt is more than double the size of an Xbox soc, there may be more profit selling one of those at $1000 than an Xbox at $500, but it depends on the size of board partners and retailer cut. But it’s also not going to sell in the same quantity.
XSS SOC is ~200mm^2, XSX is ~360mm^2, PS5 is ~300mm^2

So bigger than Navi10, quite a bit smaller than Navi21. Coupled with the significantly higher volume of consoles (at least an order of magnitude higher than AIB GPUs as been mentioned), it makes sense for AMD to prioritize console SOC over GPU. Sadly it's much safer for a business to piss off individual customers than it is for them to piss off corporate customers, so the wafers go to the MS/Sony contracts.
 

Mav451

Supreme [H]ardness
Joined
Jul 23, 2004
Messages
4,690
the GPUs will sell, but the consoles will sell in far greater quantity, so it’s beneficial for them to get more of those parts out there than discrete gpus.

sales numbers estimate more than 5 million of the new consoles already out there. That’s a lot of product delivered and revenue received.

(Source: https://www.notebookcheck.net/PS5-v...est-selling-console-of-them-all.511005.0.html)

I don’t know if anyone has posted sales numbers for GPUs (I’ve seen market share numbers but nothing on actual quantities sold), but AMD basically survived off the revenue from ps4/Xbox one for a while there. So I wouldn’t underestimate the amount of revenue those console sales bring.
I've looked at the 10k filings from 2014 to 2019 (latest filed in Feb 2020, so we'll see numbers in 2nd week of Feb 2021 - soon).
1) In 2019, revenues were $4.7Bn for Computing and Graphics and $2.0Bn for Enterprise, Embedded, and Semi-Custom.
The console sales fall under semi-custom revenue.

2) Even in 2016/2015/2014 (all before Ryzen launch), computing and graphics sales never really fell as low as many think.
  • 1.9Bn/2.3Bn (2016)
  • 1.8Bn/2.2Bn (2015)
  • 3.1Bn/2.4Bn (2014)
Remember that both consoles released in November 2013. Now if you're wondering if the Switch release in 2017 changed things? The answer is no, 2.3Bn for Enterprise, Embedded, and Semi-Custom for that year. It's honestly one of their more predictable revenue streams.

Don't get me wrong - consoles certainly were a solid contributor, but looking at their Computing and Graphics revenue (3.0Bn, 4.1Bn, 4.7Bn - for 2017 to 2019), I think AMD would very much like the current sales trajectory to continue.
 

OFaceSIG

2[H]4U
Joined
Aug 31, 2009
Messages
2,490
I recently bought my first brand new CPU in probably 10 years. i5 10400. It was cheap and available. I needed a CPU for my stepson's 1080p build. I would have loved to get him a 3600 but when I ordered the 10400 the 3600 wasn't even available at my local microcenter. Every other CPU I've purchased for the past decade has been used. My 1080 Ti I just scored was also used, from a good friend.

AMD is in a tough spot. They wouldn't even have gotten Ryzen 3 off the ground without TSMC, yet TSMC can only supply what they can supply. GloFo has no sub 12nm node. So it's a catch 22 for AMD.
 

Mega6

2[H]4U
Joined
Aug 13, 2017
Messages
3,400
XSS SOC is ~200mm^2, XSX is ~360mm^2, PS5 is ~300mm^2

So bigger than Navi10, quite a bit smaller than Navi21. Coupled with the significantly higher volume of consoles (at least an order of magnitude higher than AIB GPUs as been mentioned), it makes sense for AMD to prioritize console SOC over GPU. Sadly it's much safer for a business to piss off individual customers than it is for them to piss off corporate customers, so the wafers go to the MS/Sony contracts.
Console production "Volume" was set a long time ago in orders with TSMC probably by Sony and MS. Just like AMDs CPU and GPU orders, TSMC has no spare capacity. You all make it out as if TSMC can change from producing CPUs and GPUs for AMD to Console chips for Sony/MS back and forth on a whim. It doesn't work that way. What was ordered (probably before covid) is set and DONE.
 

KATEKATEKATE

Limp Gawd
Joined
Jan 20, 2019
Messages
495
Console production "Volume" was set a long time ago in orders with TSMC probably by Sony and MS. Just like AMDs CPU and GPU orders, TSMC has no spare capacity. You all make it out as if TSMC can change from producing CPUs and GPUs for AMD to Console chips for Sony/MS back and forth on a whim. It doesn't work that way. What was ordered (probably before covid) is set and DONE.
I totally agree and I don't think anything in my post indicates that I think these allocations were made on the fly ;) was just adding input on why those decisions, whenever they were made, went the way they did.
 

Mega6

2[H]4U
Joined
Aug 13, 2017
Messages
3,400
I totally agree and I don't think anything in my post indicates that I think these allocations were made on the fly ;) was just adding input on why those decisions, whenever they were made, went the way they did.
It went the way everything went in a "normal" economy at the end of 2019. Everyone estimated their sales and ordered. Back to the present - woefully inaccurate and short. If you want to blame anyone or anything for pissing everyone off - blame covid. Seriously.
 

d3athf1sh

Gawd
Joined
Dec 16, 2015
Messages
789
AMD loves them. $$$$$$

In the end, its all about the dollars. It doesn't matter if you have to wait for your new CPU or Graphics card.

When these companies say they care about you, or care about Gamers, they don't. They only care about making money. Consumers are just a means to and end.
you know that sounds dumb, right?

amd been budget cost/perfomance king for years. even since Ryzen came out you could still get more cores/performance for less. and what do you mean they don't care about gamers? have they NOT been in every gaming console and 1/2 of all gaming pc's for over a decade? and what about all the technologies they've made open source?

give me a break.
 
Last edited:

Aurelius

2[H]4U
Joined
Mar 22, 2003
Messages
3,065
you know that sounds dumb, right?

amd been budget cost/perfomance king for years. even since Ryzen came out you could still get more cores/performance for less. and what do you mean they don't care about gamers? have they NOT been in every gaming console and 1/2 of all gaming pc's for over a decade? and what about all the technologies they've made open source?

give me a break.

It'd be better to say that you shouldn't expect AMD (or any company, really) to bend over backwards for you. AMD certainly has gamers, and it cares about supporting the segment, but the execs aren't losing sleep because their PS5 production ramp made it harder for you to find a Ryzen 7 rig.
 

Krenum

Fully [H]
Joined
Apr 29, 2005
Messages
16,937
you know that sounds dumb, right?

amd been budget cost/perfomance king for years. even since Ryzen came out you could still get more cores/performance for less. and what do you mean they don't care about gamers? have they NOT been in every gaming console and 1/2 of all gaming pc's for over a decade? and what about all the technologies they've made open source?

give me a break.
AMD has been the budget cost king for years because they couldn't compete with Intel, so they had to price their products lower. Now that you see AMD beating Intel across the board, AMD's prices have gone up. Simple demand economics.
 

Red Falcon

[H]F Junkie
Joined
May 7, 2007
Messages
10,835
AMD has been the budget cost king for years because they couldn't compete with Intel, so they had to price their products lower. Now that you see AMD beating Intel across the board, AMD's prices have gone up. Simple demand economics.
Correct, and this happened in the mid-2000s when they were destroying Intel performance-wise, right up until Intel released Conroe (Core 2), then the tables turned.
We are now seeing the tables turn yet again, and this is why it was so important that Intel start being competitive again, but alas...
 

Krenum

Fully [H]
Joined
Apr 29, 2005
Messages
16,937
Correct, and this happened in the mid-2000s when they were destroying Intel performance-wise, right up until Intel released Conroe (Core 2), then the tables turned.
We are now seeing the tables turn yet again, and this is why it was so important that Intel start being competitive again, but alas...
I'm waiting until May to see if things even out. I'm not totally against Rocket Lake just yet.
 
Joined
Jun 10, 2004
Messages
3,865
While we don’t know production costs vs sale prices, there’s one factor I think a lot of people don’t consider: it is possible that “volume” makes up for any perceived higher profit.

A lot of money comes from the volume parts, not the high end boutique ones. There’s an install base of 200 million + consoles from last generation, that’s 200 million (and counting) parts.

if this generation of consoles does the same, it’s likely to provide not only a solid revenue stream but a very large one.

Given how how our entire world is being very deliberately re-engineered to heavily restrict travel and force the masses to work from home,I predict we will see at least a doubling of those sales numbers over the next gen of consoles.
 

Lakados

2[H]4U
Joined
Feb 3, 2014
Messages
3,420
I'm waiting until May to see if things even out. I'm not totally against Rocket Lake just yet.
Gotta use the parts you can get, AMD may have the best processors but if you can’t buy them than Intel is a pretty close second.
I only expect AMD’s equipment to get harder to source as the months go on. Especially if they are going to try and prove themselves to the OEM’s with a 5000 series mobile.
 

LukeTbk

Gawd
Joined
Sep 10, 2020
Messages
826
It doesn't but the 1000 consoles that sell for every processor does.
In 2020, a bit over 300 millions personal computer were sold, I imagine the vast majority didn't had a luxury $500 CPU in them and say only 20-22% from AMD, but I am not so sure about those ratio.

Intel in one quarter on the PC side make 10 billion in sales that about the same than AMD total annual income for everything.
 

travm

Gawd
Joined
Feb 26, 2016
Messages
769
The only reason AMD (or any company for that matter) would produce a lower margin product over a higher margin product is because of a contractual agreement. No doubt this is what we have here. AMD lived off of consoles in the dark days and has benefited quite well from console technology development with MS and Sony. The price of that benefit on the current platforms is a know production goal (contract as it be) made more than a year ago. This is the downside of not having your own fabs. TSMC has no more capacity left and AMD cannot just like that ask for more. Moving to a new fab, say Samsung for instance would take a lot of time, money and effort to port over chip designs to the Samsung process node. Samsung may not have any capacity either, Automobiles for example are now being held up because of chip shortages. Its everywhere.
Even when you have your own fabs you can only kidnap your suppliers families once, and beat your workers so hard. Eventually there is actually nothing more you can do. I think TSMC is there now. So are all the other fabs.. Intel might have some 14nm++++++ available.
 

Mega6

2[H]4U
Joined
Aug 13, 2017
Messages
3,400
Even when you have your own fabs you can only kidnap your suppliers families once, and beat your workers so hard. Eventually there is actually nothing more you can do. I think TSMC is there now. So are all the other fabs.. Intel might have some 14nm++++++ available.
TSMC is building fabs like crazy. Intel is bringing on line 10nm fabs. (supposedly they might work)
 

LukeTbk

Gawd
Joined
Sep 10, 2020
Messages
826
Sales and income are two entirely different things. Why would you compare the two? Sales includes the product cost where as income does not. Your comparison is meaningless.
Your article is about net income, not income (income absolutely include the product cost)
The terms “profit” and “income” are often used as synonyms, but you need to distinguish the difference between these two numbers. Income is the top-line revenue. This number is calculated by tallying every penny that came into the company during a given period. Income is commonly referred to as “Gross Revenue.”

Income: Income is money (or some equivalent value) that an individual or business receives,
Net income, also called net earnings, is sales minus cost of goods sold

I was using company revenues on both side of the comparison, Intel gross revenues in the PC sector versus AMD total revenues.
 

Mega6

2[H]4U
Joined
Aug 13, 2017
Messages
3,400
I was using company revenues on both side of the comparison, Intel gross revenues in the PC sector versus AMD total revenues.
Then that's what you should have said in the first place. Dance around it all you want, but your initial post is inaccurate. Sales and Revenue are not the same thing either.
 

LukeTbk

Gawd
Joined
Sep 10, 2020
Messages
826
Then that's what you should have said in the first place. Dance around it all you want, but your initial post is inaccurate. Sales and Revenue are not the same thing either.
Fair enough (I can see them having grossist between them and the HP/Dell of the world and create confusion to where the numbers would come from if the word sales is used).

Regardless the point would have still stand in any way you interpret the word sales in that message and change nothing to the central message of it, personal computer sold over 300 millions unit in 2020, all the new Xbox and PS5 combined will maybe sales has much during their complete life cycle.

Even if we give a very small market share to AMD and the maximum ideal they can achieve I am not sure where that 1,000 consoles being sold for each CPU sense of scale come from or if it is really accurate.
 
  • Like
Reactions: Mega6
like this

learners permit

Limp Gawd
Joined
Jun 15, 2005
Messages
441
Well maybe the bright side of all this steaming pile of excrement is the fact that we can all commiserate as a community thanks to mister meanie and lets not forget to count our blessings as they are many.
 
  • Like
Reactions: travm
like this

d3athf1sh

Gawd
Joined
Dec 16, 2015
Messages
789
I'm waiting until May to see if things even out. I'm not totally against Rocket Lake just yet.
why May?

also don't forget Intel is not going to be using pcie4 to their chipset for some reason. only to gpu and first M.2

with amd's X570 chipset you also get pcie4 to chipset.
 

vegeta535

Supreme [H]ardness
Joined
Jul 19, 2013
Messages
5,434
why May?

also don't forget Intel is not going to be using pcie4 to their chipset for some reason. only to gpu and first M.2

with amd's X570 chipset you also get pcie4 to chipset.
So? People are all over the b550 boards and they have the same setup as the Intel boards.
 
Status
Not open for further replies.
Top