dark clouds looming in the video cards supply chain - inventory levels are up, sales are down

[zMeul]

source: http://blogs.barrons.com/techtraderdaily/2016/12/12/nvidia-amd-uh-oh-graphics-supplies-piling-up-warns-pacific-crest/

 

Quote

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.

 

neither JPR nor Mercury Research release breakdowns by model of the dGPU market, but we can take it to STEAM Hardware Survey to see the data ValvE collects

as follows: http://store.steampowered.com/hwsurvey/videocard/

• GTX1070 - 1.59%
• GTX1060 - 1.53%
• GTX1080 - 0.86%
• RX480 - 0.37%
• RX470 - does not make an appearance, meaning it's share is lower than 0.15%
• Titan X - same as above

this could mean trouble for both AMD and nVidia as they could've saturated the market, the market is pushing back

the "rumored" GTX1080Ti and AMD's Vega might see very limited volume sales

 

what we might expect: price drops for GTX1070, GTX1080

[Guest]

If I buy the Pascal or RX, would that improve?

[ARikozuM]

3 minutes ago, deXxterlab97 said:

If I buy the Pascal or RX, would that improve?

Yes, by 0.0000000000000000000000000000001%.

 

Or 0.00001% for AMD.

[Mira Yurizaki]

Strange, when they were first released, we were having trouble finding them. At MSRP.

 

Maybe it's because those bastards are still selling them at +$200 and people think that is the MSRP of the GTX 10 series.

[RGProductions]

Cheaper GPUS for me!

[Wyllio]

Nvidia is partly to blame for the poor sales. Their founders edition prices inflated all the prices for the GPUs. GTX 1080 were going for around $700+ at launch, and the GTX 1060 was $330+. With the 1060 performing the same as last generations 970 for the same price meant no reason to upgrade. Value to performance just was not as good as the 900 series cards.

[Guest Kloaked]

1 minute ago, M.Yurizaki said:

Strange, when they were first released, we were having trouble finding them. At MSRP.

 

Maybe it's because those bastards are still selling them at +$200 and people think that is the MSRP of the GTX 10 series.

Yeah a lot of the hype was ruined due to lack of stock for the first few months or so, and the outright (somewhat of a) lie Nvidia made about suggested retail price for the 1070 in particular.

[Sakkura]

Nvidia and especially the middlemen got too greedy with pricing, and now are surprised people aren't buying.

[goodtofufriday]

People are waiting for sales,  vega,  1080ti. ¯\_(ツ)_/¯ 

[SurvivorNVL]

I am waiting for Vega and AMD Zen, so, at this point, I won't buy anything.  Also hoping for new Mushkin and Patriot SSD's.

[Mira Yurizaki]

6 minutes ago, goodtofufriday said:

People are waiting for sales,  vega,  1080ti. ¯\_(ツ)_/¯ 

People not buying the initial batch because scalpers, there were no real good Black Friday / Cyber Monday sales around it (which really should've been expected anyway), and people are waiting to see what AMD comes up with.

 

... So is this partly AMD's fault too? :B

[goodtofufriday]

4 minutes ago, M.Yurizaki said:

People not buying the initial batch because scalpers, there were no real good Black Friday / Cyber Monday sales around it (which really should've been expected anyway), and people are waiting to see what AMD comes up with.

 

... So is this partly AMD's fault too? :B

Youre right about nvidias prices. The only card with significant improvement over last gen was the 1080. That coupled with bs founders pricing screwed up everything. 

 

R/amd is more at fault lol. They are telling everyone to wait for vega. 

[Mira Yurizaki]

1 minute ago, goodtofufriday said:

Youre right about nvidias prices. The only card with significant improvement over last gen was the 1080. That coupled with bs founders pricing screwed up everything. 

 

R/amd is more at fault lol. They are telling everyone to wait for vega. 

Nobody really cared about FE and were practically ignoring it. Everyone wanted the custom AIB boards. But every time any AIB came out with a batch, it would be sold out in minutes. I'm sure most of those were people who were actually buying it, but some of those just ended up back at eBay or Amazon with a $900 price tag.

[Sakkura]

1 minute ago, goodtofufriday said:

Youre right about nvidias prices. The only card with significant improvement over last gen was the 1080. That coupled with bs founders pricing screwed up everything. 

 

R/amd is more at fault lol. They are telling everyone to wait for vega. 

They're not wrong though... even if you would never, ever buy an AMD card, you're likely going to get the best value for money from Nvidia when they are facing direct competition for whichever level of card you're after.

[Guest]

30 minutes ago, M.Yurizaki said:

Strange, when they were first released, we were having trouble finding them. At MSRP.

 

Maybe it's because those bastards are still selling them at +$200 and people think that is the MSRP of the GTX 10 series.

That's by design though - create a demand through limited availiblity.

 

This entire issue though is heavily intertwined by other issues - a more difficult economy is leaving people with less money to spend on things like their PC's. This mixed with the limited performance increase from generation to generation is stetching what was a 2-3 year upgrade cycle for some out to a 4 - 6 year process. This simply means that there is a lower demand from channel for product leaving inventories full. Synnex and Ingram aren't going to risk millions of dollars in stock sitting there to be caught out at price cuts from the manufactuer at a later date or worse, a replacement model being released.

[ManIkWeet]

Maybe they shouldn't have hiked the price up so much... Smaller chipset larger costs ¬¬

 

Remember that they went from 28nm to 14nm, so they practically doubled the output per-wafer (minus some manufacturing errors).

 

The cards are too expensive, that's all.

[Misanthrope]

We shall call this the "Founders Edition" effect.

[ARikozuM]

1 minute ago, Misanthrope said:

We shall call this the "Founders Edition" effect.

Good name, but has nothing to do with the Founders Edition. The FE was supposed to be the more expensive option but the AIB's decided to sell at a higher MSRP and have low quantities.

[Misanthrope]

2 minutes ago, ARikozuM said:

Good name, but has nothing to do with the Founders Edition. The FE was supposed to be the more expensive option but the AIB's decided to sell at a higher MSRP and have low quantities.

How can it continue to be the more expensive option if it has the worst cooler of the pack? No it was intentionally priced as such to push the price of AIB cards up.

[Wyllio]

3 minutes ago, ARikozuM said:

Good name, but has nothing to do with the Founders Edition. The FE was supposed to be the more expensive option but the AIB's decided to sell at a higher MSRP and have low quantities.

It has everything to do with the Founders Edition. Because they release the cards with two different price points, AIB partners saw it as way to increase prices on their top end cooling solutions and leave the MSRP cards to the cheap plastic blowers. Cards designs like the MSI Twin Frozr in the 900 series was the same price as a reference card, but with the 1000 series costs around $100 more. With the price increase justified by Nvidia selling a weak cooler which thermal throttled at the same price.

[ARikozuM]

1 minute ago, Misanthrope said:

How can it continue to be the more expensive option if it has the worst cooler of the pack?

It's the Founders Edition. If cooling performance was the deciding factor, ASUS would be justified with their $900 1080 prices on Newegg.

1 minute ago, Misanthrope said:

No it was intentionally priced as such to push the price of AIB cards up.

The FE was slated for $700 MSRP by Nvidia. The AIB's were supposed to be less costly.

[Dabombinable]

Here's an idea. Actually have the cards at the recommended retail price, then maybe people will fucking buy them. Instead of, you know, having it around $100+ higher.

[Wyllio]

5 minutes ago, ARikozuM said:

It's the Founders Edition. If cooling performance was the deciding factor, ASUS would be justified with their $900 1080 prices on Newegg.

The FE was slated for $700 MSRP by Nvidia. The AIB's were supposed to be less costly.

Supposed to be less costly does not mean they followed suit. Fact is the cards were overpriced and still are overpriced.

[BuckGup]

Good

[ARikozuM]

1 minute ago, Wyllio said:

Supposed to be less costly does not mean they followed suit. Fact is the cards were overpriced and still are overpriced.

That's not Nvidia's fault, but the company's themselves.