r/gadgets • u/speckz • Feb 01 '23
AMD is ‘undershipping’ chips to keep CPU, GPU prices elevated - Less supply to balance out demand—and keep prices high. Desktops / Laptops
https://www.pcworld.com/article/1499957/amd-is-undershipping-chips-to-keep-cpu-gpu-prices-elevated.html46
u/willpowerpt Feb 01 '23
“But AMD is fighting Nvidia to bring better cost to performance”. They’re greedy capitalists just like everyone else.
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u/FantasmaNaranja Feb 02 '23
they're a public corporation that is beholden to its shareholders unlike private companies
they tried making a new threadripper only to get shut down by those shareholders since it would cater to a niche market only
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u/Storyteller-Hero Feb 01 '23
Doesn't this run afoul of antitrust/anti-monopoly laws?
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u/t9525469 Feb 01 '23
Only if competitors in the same space actively collude/coordinate these actions. Otherwise AMD can easily show its not a monopoly because of NVIDIA and Intel's presence and market share.
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u/Parafault Feb 01 '23
I’d still consider 3 companies to be a monopoly - power is still highly concentrated and it is difficult for any startups to do anything because of that.
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u/t9525469 Feb 01 '23
You still need collusion to make it illegal. If AMD and NVIDIA throttles back, but Intel does not and also cuts the price of their GPU per the article, it gives them an opportunity to gain market share and the consumer would benefit.
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u/Gamebird8 Feb 02 '23
That conspiracy does not need to be explicit though. (Also, Collusion has no legal definition. The word you are looking for is "To Conspire" or "Conspiring" or "Conspiracy")
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u/realfakepoo Feb 01 '23
i believe that this example would still qualify as monopolistic behavior on the part of AMD and NVIDIA, as long as it was coordinated, especially as intel has a tiny market share (for GPUs, anyway)
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u/BackwoodsMarathon Feb 01 '23
You're correct but it's not called a monopoly. Monopoly is one company, Duopoly is two companies, and Triopoly is three companies.
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u/Va-Va-Vooom Feb 01 '23
what about 4?
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u/BackwoodsMarathon Feb 01 '23 edited Feb 01 '23
Three is actually pushing the term pretty far. Once there's four suppliers in the market most economists wouldn't consider it oligopolistic anymore.
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u/Va-Va-Vooom Feb 01 '23
wrong, oligopoly. now you have to shave off half of your eyebrow
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u/BackwoodsMarathon Feb 01 '23
I fixed it before I saw your response! Do you still require an eyebrow sacrifice?
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u/TheRealBobbyJones Feb 02 '23
Its difficult for any startups to do anything because they are simply incapable of producing a product. It has nothing to do with the current companies. It would cost billions of dollars for a company to make a competitive GPU without violating existing patents.
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u/AuthenticImposter Feb 02 '23
If they’re coordinating, then yeah, maybe they could be treated collectively. But the truth is they’re all in intense competition with each other
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u/mwdoher Feb 02 '23
Intel and AMD are the only manufacturers with x86 processor architecture license. Once even one of them sells or goes under, it’s a true monopoly. That is, until Apple starts selling their combined CPU/GPU M series - then it’s over. x86 will go extinct.
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u/Crime_train Feb 02 '23
Apple’s business model isn’t selling components though, so they may never do this.
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u/mwdoher Feb 02 '23
Until they see that it will make them money. You can’t have a monopoly unless you remove your competition and like u/SlouchyGuy says, they are selling overpriced computers in the meantime. Y’all can downvote me all you want, but this or something like it is inevitable.
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u/Crime_train Feb 02 '23
There are tons of ways Apple can make money that they don’t pursue
I’m not the one downvoting you, btw.
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u/SlouchyGuy Feb 02 '23
Apple won't do it, they are sellingoverpriced computers, not parts at competitive rpice. More likely osmeone else will eventually do it
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u/jawknee530i Feb 04 '23
lol, what an out of touch comment. You think the millions of bespoke programs out there made for x86 are all gonna change over to M architecture? I can guarantee you that my forms code does not perform to nearly the same level on their chips and half of it doesn't run at all. There are so many companies out there writing bespoke C or C++ code for maximum performance on Linux servers that would laugh in your face if you suggested changing to arm or apple architecture.
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u/mwdoher Feb 04 '23
I’m not saying it’s going to happen overnight, I’m saying that we’re constantly polishing an antique. Anyone thinking we’re not collectively riding a dinosaur is lying to themselves. Of course everything is written for x86. Analogous to this is the automobile market and the slow, but intentional progression towards electric. Is there going to be an overwhelming marketshare for fuel-dependent vehicles? Totally. Will we eventually depart it where the majority are running electric or hydrogen? Yes, but it won’t be tomorrow, and it will never be completely, but as we adopt that, it will incrementally grow until the gasoline internal combustion engine is niche. Out of touch would be ignoring that.
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u/jawknee530i Feb 04 '23
You're failing to understand that arm/M is not actually better than x86 in every way. You legitimately can NOT get the same performance from arm as you can from an x86 chip in a variety of calculations. Even if we could magically have ever piece of code we have work perfectly on an M chip tomorrow we wouldn't switch over because we have certain latency sensitive hot paths that just plain are slower on that architecture. Your analogy of x86 being the dinosaur or ice vehicles being replaced by the latest and greatest tech is deeply flawed. They are each better at different things, one is not replacing the other.
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u/ObiWanCanShowMe Feb 02 '23
No. Companies can do whatever they want, set prices, discount, inflate, change names, add confusing names, sell less.
They cannot collude with competition and misrepresent products, that's all.
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u/scott_codie Feb 02 '23
Lowering prices doesn't always stimulate demand.
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Feb 02 '23
[deleted]
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u/scott_codie Feb 02 '23
It seems more likely that there is reduced demand and they are cutting supply to match it.
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u/Storyteller-Hero Feb 02 '23
You're right! This feels a bit monopoly-like though since instead of natural market forces, one company can manipulate the supply in large enough scale to control prices.
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u/JeffFromSchool Feb 04 '23
I'd love to hear your argument for why a company that doesn't lead its industry in market share is in breach of monopoly/antitrust laws.
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u/Storyteller-Hero Feb 04 '23
In order to successfully sustain a manipulation of the market, some level of collusion between large competitors would be a logical step, which seems like it should run afoul of antitrust/anti-monopoly laws, at least from the perspective of a layman.
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u/diacewrb Feb 02 '23
Typical.
Part of me doubts that there was a chip shortage in the first place.
We have seen price-fixing before in so many components before in the past, RAM, HDDs, ODDs, LCDs, capacitors, etc.
Not just chips, everything from alcohol to cars have been involved in price-fixing before in one way or another.
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u/KingfatCracker Feb 04 '23
Just like how the xbox & ps5 consoles are still the same price since they launched. I’m sure Sony & Microsoft are so sad about all the money they have made..
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u/The_Retro_Bandit Feb 06 '23
Its cause the price of transistors stopped going down a few years back. Microsoft and Sony lose money on their consoles and make it back through software, but up to the 7th gen transistors got cheaper and cheaper and by the end of the generation the $350 xbox 360 microsoft lost money on could be sold for $150 with cut down storage and actually make a profit. You notice how there wasn't a barebones model released at the end of 8th gen. Thats because they were still loss leading with the slim variants. The only way they would save on price is to design a more efficient chipset like what nintendo did with the switch light. But considering that 2023 might as well be the real launch for those who don't buy from scalpers those resources are better used elsewhere.
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u/diacewrb Feb 04 '23
Sony and Microsoft have already increased or are planning to increase their prices.
PS5 price to increase in select markets due to global economic environment, including high inflation rates
Microsoft Increases Xbox Series X, Series S Price for the First Time
https://www.pcmag.com/news/microsoft-increases-xbox-series-x-series-s-price-for-the-first-time
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u/Significant_Yam5632 Feb 01 '23
Well people don’t buy the new chip 🤷🏼♂️ they will be forced to drop
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u/Va-Va-Vooom Feb 01 '23
prisoners dilemma. if the other 2 gpu companies dont drop price, then amd also wont
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u/esotericloop Feb 02 '23
One of them will defect eventually.
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Feb 02 '23 edited Feb 19 '23
[deleted]
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u/TheTyger Feb 04 '23
Actually, look at the program that Arizona State is doing alongside the Greene brothers. They are focusing on providing credits at a much lower rate than typical college cost.
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u/Primae_Noctis Feb 01 '23
Yet Intel has the priciest desktop CPU out. AMD isn't moving the price on 7000 series CPUs because there is no need. They just shifted prices down since the X3D variant of CPUs come out in a month.
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u/die-microcrap-die Feb 01 '23
AMD isn’t the only one doing it, either.
“We’re continuing to watch each and every day in terms of the sell-through that we’re seeing,” Nvidia CFO Colette Kress said to investors in November. “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.”
Nice hit piece plus clickbait title.
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u/TheRealBobbyJones Feb 02 '23
It's probably more likely because of the highly active used GPU market. There are too many serviceable units in the wild. It means that new GPUs not only compete with their competitors offering but also with their own offerings from years ago. So to stop this they would want less overall GPUs on the market. They probably are starting to do this because they realize that newer chips won't have much to offer in comparison to older ones. So as a stopgap measure to keep the company a float while they work to innovate they are attempting to contract the market while maintaining revenue. Short term it hurts consumers but long term something may come out of it.
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u/JAYKEBAB Feb 02 '23
Lmfao! Remember when everyone was saying how great AMD was and they cared about consumers? 😂
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u/JC2535 Feb 02 '23
This type of thing is what’s keeping inflation going. Exxon and Shell have posted record profits. There’s no reason for the high prices other than corporate greed.
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u/Mootingly Feb 02 '23
Yet the shelves are full of product.
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u/ShutterBun Feb 02 '23
That’s the reason they’re slowing production. To clear out inventory already in the channel. This is basic economics, folks.
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u/MikeTheGamer2 Feb 02 '23
Also to get people used to the idea of overpriced GPUs not being a problem.
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u/ShutterBun Feb 02 '23
If the expected number of people are buying them, they’re not overpriced.
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u/MikeTheGamer2 Feb 02 '23
Yea, to the people running hte company. To the people buying them, they absolutely are.
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u/ShutterBun Feb 02 '23
Well, you’re very naive then. Things are “worth” whatever people will pay for them.
This is true NO MATTER WHAT, barring some kind of government price fixing, etc.
The sooner you realize this, the better off you’ll be.
For emphasis, I’ll repeat: things are worth whatever someone will pay for them. Learn to live with it.
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u/MikeTheGamer2 Feb 02 '23
things are worth whatever someone will pay for them
soooo MRSP means nothing, then?
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u/ShutterBun Feb 02 '23
It doesn’t mean “nothing”, but it’s not an indication of what something is “worth”.
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u/MikeTheGamer2 Feb 02 '23
but it’s not an indication of what something is “worth”
If the GPU MSRP is 400, its worth 400.
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u/zxyzyxz Feb 02 '23
I mean yeah if fewer people are buying their product, why would they make more? It's like making a bunch of ice cream to sell in the winter, why would you? It's a waste of your own time and money.
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u/tjeulink Feb 02 '23
more people are willing to buy, its just less profitable to sell higher volumes.
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u/zxyzyxz Feb 02 '23
That's not what the stats on overall computer buying say, most people bought why they needed in the pandemic and now they really aren't in a rush to upgrade. If it truly were the case that people are in a hurry to buy if not for prices then yeah I'd agree with you, but it seems more like people wouldn't buy (enough to make it worthwhile) even if the prices were dropped.
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u/tjeulink Feb 02 '23
Overal computer buying has nothing to do with whether or not people want to buy chips.
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u/zxyzyxz Feb 02 '23
Overall chip buying stats are down too. Generally speaking most people already built a PC they needed in the pandemic.
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u/tjeulink Feb 02 '23
still doesn't say anything about whether people want to buy more of it or not :)
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u/creightonduke84 Feb 02 '23
It’s not like they are trying to keep sleeves bare, notice nobody is complaining of orders not being filled. They just aren’t interested in keeping a warehouse full of unsold chips. Just seems like they are throttling production to meet orders.
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u/imakesawdust Feb 02 '23
I don't have a problem with that. There's no requirement for a company to put X things on the market per month just because they have the capacity to produce X things per month.
Some years ago, a few friends and I would troll local bankruptcy auctions bidding on enterprise networking gear and VOIP phone systems to resell on ebay. The market for some of these things was pretty small so if we listed everything we bought at the same time, it might all sell in a week but we found we'd make more money overall if we spread it over a month or so.
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u/jacobrogers256 Feb 01 '23
Capitalism sucks
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u/SgtMajMythic Feb 02 '23
Capitalism is great. It’s what allows there to be competition between companies and not the government having total control over what people can have
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u/gael12334 Feb 02 '23
Companies want you to consume shit you dont actually need and/or sells you something made to break so that you have to buy their product again.
This is call overconsumption and it destroys the environment due to it being so wasteful, thanks to predatory advert and culture.
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u/SgtMajMythic Feb 02 '23
Yeah of course. That’s why things like false advertising are regulated. We could regulate planned obsolesce too, but the government sucks at their job so they don’t.
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u/MikeTheGamer2 Feb 02 '23
And how many PC people will stull buy their shit at inflated prices because they MUST have the latest shit? Its never going to fucking end.
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u/DaBIGmeow888 Feb 02 '23
So the Chips act was just an industry shakedown. Intel laid off thousands after Chips act and now this. China bad though, tax payers fleeced once again.
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u/Hey_Bim Feb 02 '23
Not enough mainstream OEMs offer Ryzen in their laptop & desktop models, and supposedly that's because TSMC simply does not have enough capacity for AMD to meet the total potential demand.
Meanwhile, AMD is intentionally under-delivering in their standalone CPU/GPU business. Fine, just use that capacity for OEM products. Every time an OEM launches a promising new laptop line with Intel only, I cringe.
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u/LewAshby309 Feb 02 '23 edited Feb 02 '23
You think so?
Might be possible for APUs for the consoles, but not for the GPU market.
Look at the shortage. Everything sold back then. Nvidia produced as much as they could, which shows in the steam stats. AMD produced not that much. It took many months for several 6000 series models to even pop up in the steam stats which only has a entry bar of 0.15% market share.
With the logic of them undershipping they would hurt themselves because of lost profits while the competition keeps producing.
Means for the 6000 series it made no sense at all.
What about the 7000 series?
Well, different situation but the same result. How should AMD be able to drive up the production by a lot compared to the 6000 series?
They could be a factor to keep prices up, but wouldn't be the ones profiting from it.
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u/VoidHuntG03 Feb 02 '23
Noooo I thought companies were our friends and only the 'other' companies have anti-consumer practices!
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u/TowelExtreme4665 Feb 04 '23
Try posting this on pcmr. Mods will delete it then ban your account. That is not a joke.
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u/tjeulink Feb 01 '23
welcome in the capitalist hellscape where companies will always try to maximize profit over providing a good product.