[Barron's] Nvidia, AMD: Uh oh, Graphics Supplies Piling Up, Warns Pacific Crest

EuphoricRage470

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By far, the most surprising development during our quarterly supply-chain conversations in Asia was a notable tone change at several first-tier desktop graphics card manufacturers surveyed regarding sell-through and inventory levels in the channel. Our specific findings were as follows: High-end NVIDIA GeForce GTX 1080 and 1070 card inventory levels have risen to 2 to 2.5 months in the channel versus targeted levels of 1 to 1.5 months due to weaker-than-expected sell-through in late October and November. Two weeks ago, desktop graphics card manufacturers began to experience order pushouts and cancellations of GTX 1080 and 1070 cards from channel customers ahead of the holiday season. Given the excess supply situation, GeForce GTX 1080 pricing has dropped ~10% in the channel, with desktop card manufacturers now unwilling to order product due to perceived working capital risk. Given the weaker-than-expected sell-through of higher ASP GeForce GTX 1080/1070 product and higher sales mix of mainstream GeForce GTX 1060/1050, not one desktop graphics card manufacturer we surveyed is expecting sequential revenue growth in calendar Q4, with forecasted sales declines of 5% to 15% q/q. We note this contrasts with NVIDIA’s guidance for sequential revenue growth in its gaming segment (62% of sales) in FQ4 (Jan.), after record-high sales in FQ3 (up 59% q/q, 65% y/y). Sales of AMD’s desktop RADEON 480/470 graphics cards were also characterized as disappointing QTD.


http://blogs.barrons.com/techtrader...phics-supplies-piling-up-warns-pacific-crest/

Bad news bears.
 
Wow, that was quick for the GPU party to fizzle out. So much for those expectations. Failure all around nobody excluded, neither cards or companies.

Its going to be really ugly. That's a real big inventory load for both Nvidia and AMD.
 
I saw today that Newegg is selling a GTX 1070 FE for $380 and I thought that seemed odd. I've never seen a FE or even a high-end graphics card in one of their daily shell-shocker deals.
 
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Guess big price cuts are coming from both. But its desperate when you cant even sell 200$ cards.
 
Hmm...any chance we could be seeing a slowdown in GPU sales related to consumers deciding not to upgrade instead of waiting for more stuff? I'm interested in going over high-end adoption of gaming that drives the need for new hardware. Perhaps this adoption rate is slowing.
 
Hmm...any chance we could be seeing a slowdown in GPU sales related to consumers deciding not to upgrade instead of waiting for more stuff? I'm interested in going over high-end adoption of gaming that drives the need for new hardware. Perhaps this adoption rate is slowing.

Most GPU buyers (or computer buyers in general) don't sit there and worry about what's coming next. The buying process is actually stunningly simple, and can be summarized with the following algorithm:

Can my computer play the games that I want it to play?

If yes
Then do nothing
else
Do I have the money to upgrade my current computer or buy a new one?
if yes
Then buy a new computer or upgrade current one.
else
Save money until upgrade or new computer is possible.



The "let me wait six months because I heard on WCCFTech that VoltaEinsteinGaussMAXX or VegaNaviXTREME is coming" is only practiced by an EXTREMELY small subset of the PC gaming population.
 
Also on Barron's is a report that claims an analysis of mall traffic before, during and after Black Friday is not looking optimistic, to put it diplomatically. There's probably an all-around spending slump, which is not surprising considering the economic conditions here in the US.

I'm not sure how things are going in Asia though.
 
Most GPU buyers (or computer buyers in general) don't sit there and worry about what's coming next. The buying process is actually stunningly simple, and can be summarized with the following algorithm: snipped
The "let me wait six months because I heard on WCCFTech that VoltaEinsteinGaussMAXX or VegaNaviXTREME is coming" is only practiced by an EXTREMELY small subset of the PC gaming population.
yeah and they are the ones buying(now not buying) the 1070/1080. average computer users do not drop $600+ on video cards, most spend about $500 on a whole system. just look at the threads around here about "should I wait" an youll see that a lot of people are waiting to see what comes out over the next couple months.
 
Hmm...any chance we could be seeing a slowdown in GPU sales related to consumers deciding not to upgrade instead of waiting for more stuff? I'm interested in going over high-end adoption of gaming that drives the need for new hardware. Perhaps this adoption rate is slowing.

No, its actually the other way around it seems. Buyers buying in a burst pattern. They want right away, not halfway into a product line. The change seems to be that the buyers are more and more impatient and dont want to wait at all.

yeah and they are the ones buying(now not buying) the 1070/1080. average computer users do not drop $600+ on video cards, most spend about $500 on a whole system. just look at the threads around here about "should I wait" an youll see that a lot of people are waiting to see what comes out over the next couple months.

This also explains why 100-150$ cards sell in a more moderate prolonged way.
 
No, its actually the other way around it seems. Buyers buying in a burst pattern. They want right away, not halfway into a product line. The change seems to be that the buyers are more and more impatient and dont want to wait at all.
that is true. they buy buy buy when the new stuff comes out. then when newer stuff starts approaching the buying dies off as more people wait for the next best thing.
 
Here is the reasoning from my perspective and as an IT person.

1. I know people who will not spend more than $100 for a new video card. They don't care if they can't run with the highest settings or even at 60 fps.

2. I know people who will not spend money on computer upgrades and will keep the crap they have until it completely dies.

3. I know only 1 person who usually gets the latest/fastest available.

4. I know people that generally buy in the midrange of video cards ($200-$300). This is where I currently am at.

4. I see absolutely no reason to upgrade past my R9 390 at this point as I only game at 1920x1200. I currently don't play any games that I can't max out settings and still maintain 60fps. I don't even have it overclocked.

5. Computer hardware has gotten so fast as of late that most people are not going to see any reason to upgrade for quite a while.

6. Games have, for the most part, become shovelware and the console ports of crappy games are not usually all that demanding.

7. A lot of the indie games offer way better gameplay and don't usually require much as far as the GPU goes.

Combine all that and you get stocks of hardware piling up because the companies making the hardware miscalculated how much of a demand there would be. If they had only looked at the available and upcoming games, they could have adjusted accordingly.
 
Yeah, the most demanding game I've played all year has been Doom, and that's playable at high settings on my GTX 960 at 1080p.

I'd upgrade to 1440p, but it's more of the same, since OLED is taking it's sweet time, and Nvidia doesn't seem to be in any hurry at all to create low-cost G-sync ASICs. Every other aspect of display panels is unchanged from two years ago.

And 4k is right-out while we wait for GPU power to run it AND and Displayport 1.3 to become widely available.

Most of my favorite game series have been adding things to piss me off and make me uninterested in sequels, all to entice the console idiots. Both game have experienced record sales :(

It doesn't help that Nvidia had delusions of grandeur, and priced the "mid-range" 1070/1080 cards $50 too high. Just because AMD wasn't there doesn't mean that will work for more than 6 months. The 1080 has to justify itself in comparison to the GTX 980 Ti, and it's not that much faster. And the price cut the GTX 1070 offered versus the card it was replacing was way worse than the GTX 970 replacing the 780 Ti.
 
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It doesn't help that Nvidia had delusions of grandeur, and priced the "mid-range" 1070/1080 cards $50 too high. Just because AMD wasn't there doesn't mean that will work for more than 6 months. The 1080 has to justify itself in comparison to the GTX 980 Ti, and it's not that much faster.

The cards are priced right. If you notice what sells and what doesn't. Also look at the immense volume the first ~6 months. The buyers left are pretty much RX460, GTX 1050(TI) and a few GTX 1060 cards to put it bluntly. Those people where time doesn't matter.

But for gamers, its clear they buy right away and then done.

Sales and financials supports this.
 
The cards are priced right. If you notice what sells and what doesn't. Also look at the immense volume the first ~6 months. The buyers left are pretty much RX460, GTX 1050(TI) and a few GTX 1060 cards to put it bluntly. Those people where time doesn't matter.

But for gamers, its clear they buy right away and then done.

No, it's clear that Nvidia over-estimated demand and set prices too high.

When was the last time you saw a price cut at all on a top-end card inside 6 months, that wasn'yt
The cards are priced right. If you notice what sells and what doesn't. Also look at the immense volume the first ~6 months. The buyers left are pretty much RX460, GTX 1050(TI) and a few GTX 1060 cards to put it bluntly. Those people where time doesn't matter.

But for gamers, its clear they buy right away and then done.


Tell that to the card vendors, who have to eat this stupid pricing error on Nvidia's part. Sales only fall off when you hit the limits of demand for that price, and lower price would mean a longer run before that hit.
 
No, it's clear that Nvidia over-estimated demand and set prices too high.

When was the last time you saw a price cut at all on a top-end card inside 6 months, that wasn'yt



Tell that to the card vendors, who have to eat this stupid pricing error on Nvidia's part. Sales only fall off when you hit the limits of demand for that price, and lower price would mean a longer run before that hit.

You should read more of the article. It applies all the way down to GTX 1060 6GB?, RX 470 and RX480 as well. Even 200$ cards dont sell. And price cuts isn't really going to change this.
 
Well there goes my good vibe feels on Nvidia's stock going over $100 mark before the end of the year.
-3.06% / -$2.86 right now. ಠ_ಠ
 
You should read more of the article. It applies all the way down to GTX 1060 6GB?, RX 470 and RX480 as well. Even 200$ cards dont sell. And price cuts isn't really going to change this.

Fair enough, I thought this was just on the top-end.
 
I am still on a X58 chipset which I feel is the best money ever spent (7 years) and after AMD let AIB's fix the R9-290X it to was the best money ever spent.. the only real reason I would need an upgrade would be for ram size and the RX 480 fits the need but the performance is not much better.
 
its probably dropped off due to everyone waiting on vega and the supposed 1080ti. if stock is piling up and these new cards come out theres going to be a lot of good deals on the "older" cards come this spring!

i think it's more to do with game industry in general and the way games have shifted over the last few years.. you don't need top of the line to play the vast majority of free to play games.. outside of BF1 and maybe a 1 or 2 other AAA games most of them aren't really that graphically demanding. the slow growth of 4K is also probably hurting high end sales as well. theres no real incentive to say "i need a new graphic card to play this game" because the GTX 900's and the R2/300's play games like BF1 just fine.

ultimately AMD and Nvidia put all their egg's in the VR basket and failed because it's to expensive for the average consumer. because of that they didn't really bring anything new to the table for them and thus sales are suffering.
 
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Also on Barron's is a report that claims an analysis of mall traffic before, during and after Black Friday is not looking optimistic, to put it diplomatically. There's probably an all-around spending slump, which is not surprising considering the economic conditions here in the US.

I'm not sure how things are going in Asia though.

The bulk drop off is likely in international markets. Technology sales have been trending down globally, and was predicated to, due to the growing strength of the USD relative to other currencies. In some markets due to both currency and the price increases there was basically minimal price/perf change from last generation.

Notice that many companies now, both AMD and Nvidia specifically or GPUs, are also releasing cheaper regional specific SKUs.

This trend may not reverse itself anytime soon depending on the signals from the upcoming Fed announcement.
 
I wonder what the markup on the cards is.....along with the 1080ti around the corner maybe. Along with the EVGA thermal pad issue.
 
I'm starting to think that I should've went with 1070 and saved myself some money for htpc build that I'm slowly pulling. That 1070 FE for $340 is damn good and could later go into my htpc after Volta's release in 18.
 
Most GPU buyers (or computer buyers in general) don't sit there and worry about what's coming next. The buying process is actually stunningly simple, and can be summarized with the following algorithm:

Can my computer play the games that I want it to play?

If yes
Then do nothing
else
Do I have the money to upgrade my current computer or buy a new one?
if yes
Then buy a new computer or upgrade current one.
else
Save money until upgrade or new computer is possible.



The "let me wait six months because I heard on WCCFTech that VoltaEinsteinGaussMAXX or VegaNaviXTREME is coming" is only practiced by an EXTREMELY small subset of the PC gaming population.

Almost.

Can my computer play the games that I want it to play?

If yes
Then do nothing
else
Do I have the money to upgrade my current computer or buy a new one?
if yes
----> then, will the new gpu make a step difference in my resolution, fps, or quality?
if yes
then buy

else
do nothing
 
The other factor is monitor size, unless your going to spring for a 2k or 4k monitor the past gen cards work fine with 1080.
 
Usually the high-end cards are bought by more or less informed buyers. So, right now noone buys high-end, because new high-end might be behind a corner - at CES we should propably learn about Vega/1080 Ti relese, so people are waiting for them. Or, if the cards are not announced, people will just buy 1080.
 
Usually the high-end cards are bought by more or less informed buyers. So, right now noone buys high-end, because new high-end might be behind a corner - at CES we should propably learn about Vega/1080 Ti relese, so people are waiting for them. Or, if the cards are not announced, people will just buy 1080.

And then how you explain 1070, 1060, 470, 480? :)
 
I only follow PC hardware news these days for sake of curiosity than any real need to buy any of it. The funny part is I'm a ton richer than 15 years ago as a teen yet my desire for new PC hardware has never been lower.

Isn't it ironic and sad? I used to save up change to build out a new PC every year because a yearly upgrade would often show performance gains. Now, an upgrade doesn't do much and truth be told I just dont play games as often as I used to, like hardly at all. But I still love hardware and upgrading. I waited four years to build out a 6700K from my old 3930K and I noticed no difference in game/everyday performance. Just the GPU upgrade allowed me to go to a higher resolution monitor. I could afford to buy just about anything I wanted including a dual xeon megatron system - but it would just sit there doing nothing, LOL

Oh well. Getting old. Overall, the pluses outweigh the minuses. :)
 
Isn't it ironic and sad? I used to save up change to build out a new PC every year because a yearly upgrade would often show performance gains. Now, an upgrade doesn't do much and truth be told I just dont play games as often as I used to, like hardly at all. But I still love hardware and upgrading. I waited four years to build out a 6700K from my old 3930K and I noticed no difference in game/everyday performance. Just the GPU upgrade allowed me to go to a higher resolution monitor. I could afford to buy just about anything I wanted including a dual xeon megatron system - but it would just sit there doing nothing, LOL

Oh well. Getting old. Overall, the pluses outweigh the minuses. :)

Maybe we should start building retro arcade machines and exposing the youngin's to the original Mario, Metroid, Pac Man, Battlezone, etc.

One of the guys here built a sick retro Pinball machine using a 43" TV I believe. Marcdaddy was it you? Yep found it, but the image hosting died. :(
https://hardforum.com/threads/a-few...-my-visual-pinball-3-moniter-cabinet.1790409/
 
Isn't it ironic and sad? I used to save up change to build out a new PC every year because a yearly upgrade would often show performance gains. Now, an upgrade doesn't do much and truth be told I just dont play games as often as I used to, like hardly at all. But I still love hardware and upgrading. I waited four years to build out a 6700K from my old 3930K and I noticed no difference in game/everyday performance. Just the GPU upgrade allowed me to go to a higher resolution monitor. I could afford to buy just about anything I wanted including a dual xeon megatron system - but it would just sit there doing nothing, LOL

Oh well. Getting old. Overall, the pluses outweigh the minuses. :)

My 2012 build was a 3770K, I upgraded the GPU to a 980Ti a while back. I just built a 6700K rig with a 1070 and it's not a huge performance leap, more of a sidegrade. The 6700K rig isn't mine, but seeing the two side by side sure makes me appreciate that ol' 3770K rig.
 
Isn't it ironic and sad? I used to save up change to build out a new PC every year because a yearly upgrade would often show performance gains. Now, an upgrade doesn't do much and truth be told I just dont play games as often as I used to, like hardly at all. But I still love hardware and upgrading. I waited four years to build out a 6700K from my old 3930K and I noticed no difference in game/everyday performance. Just the GPU upgrade allowed me to go to a higher resolution monitor. I could afford to buy just about anything I wanted including a dual xeon megatron system - but it would just sit there doing nothing, LOL

Oh well. Getting old. Overall, the pluses outweigh the minuses. :)

Heh dual xeons. Even I would find it hard pressed to fork out $200 for Zen with ~50% MT performance than my 4790K, since that is pretty much useless to me. I think I'll be waiting for the mobo or maybe the replacement one to die before I consider a new CPU.
 
Isn't it ironic and sad? I used to save up change to build out a new PC every year because a yearly upgrade would often show performance gains. Now, an upgrade doesn't do much and truth be told I just dont play games as often as I used to, like hardly at all. But I still love hardware and upgrading. I waited four years to build out a 6700K from my old 3930K and I noticed no difference in game/everyday performance. Just the GPU upgrade allowed me to go to a higher resolution monitor. I could afford to buy just about anything I wanted including a dual xeon megatron system - but it would just sit there doing nothing, LOL

Oh well. Getting old. Overall, the pluses outweigh the minuses. :)

Loved this post. We walk similar paths. I used to spend so much more money on PC building. Then marriage, family, mortgage and job responsibilities took over. My FX6300 + GTX 770 still run fine at 1080p (or even 1920x810 custom res ultrawide) and I haven't had to upgrade as it takes me a full month or longer to actually finish any game I try. Come March though, it's time for either Zen or KBL, and then I'll look towards Vega too while I'm at it.
 
I only follow PC hardware news these days for sake of curiosity than any real need to buy any of it. The funny part is I'm a ton richer than 15 years ago as a teen yet my desire for new PC hardware has never been lower.

Same here. Of course, we are at a point where the next generation is not much of a leap at all. When I was younger a new PC meant huge improvements in either graphics or framerate. Now I can play most games at the highest settings at 1440p on a 980 Ti so I haven't bothered changing since the 10xx series were just a little bit faster. At this point I am waiting for someone to release a good 4K @ 120+ Hz display with G-Sync so I can justify upgrading my GPU in the first place.
 
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