Cryptocurrency isn't the main culprit for inflated prices

[c00face]

Probably unpopular opinion, but here it goes. Crypto isn't the reason for rises in GPU prices nor was it for 2017. I'm tired of hearing this argument and it's just a pure lack of understanding of what really is going on. The problem is in fact supply, but the supply isn't "being bought out" by miners. It's being controlled by the company itself. This is just business malpractice and there isn't really nothing we can do about it. Yes, yes, chip shortages, stimulus checks, etc... I understand that it's all being bought out and demand can't keep up with supply. But the main problem has always been the controlled supply. Rather it be AMD or Nvidia or Ford or any other company that is using this malpractice to gain riches... they are in-fact limiting the supply of these hardwares for this very purpose to inflate prices for more $.

 

Porsche has been doing this for years to keep their vehicle inflated and as we move forward, most car companies have figured out the formula to make more money while making less cars and forcing consumers to purchase vehicles at a higher value than what the car is worth. Yes, Nvidia, Ford, GMC, Toyota, etc... all have seen massive spikes in revenues (I'm talking billions of dollars) from last year alone due to supply and is on track for the same revenue this year 2021. What makes you think they want to stop this trend? Even if mining stop and used GPU hit the market again, it won't solve the real problem and these prices will continue throughout 2021 to 2022. And if I was to make a bet, I'll say it'll continue through 2023 because there's literally NO incentives for these companies to stop controlling the supply to make more money while producing less, it's a wet dream for them.

 

I'm sure there's ton of people who will disagree and like to blame it on miners... but reality is... no. Mark my words, even if mining ends, these GPU prices won't go away nor will these inflated car prices. Companies have figured out a way to suck your money out of your pocket by controlling supply and they'll continue this trend going forward. And don't even bring up chip shortages, that's a joke. If these companies wanted, they can find ways to stock pile on these chips in the coming months, but why would they? What better way to tell consumer, "There's a chip storage, that's why prices are like this." Don't get me wrong, there was a chip shortage back in 2020, but what I'm saying is... It shouldn't last long and we should start seeing these chip shortages go away, but it will NOT because these companies have no incentives to stop it or start finding ways to get these chips. Look at AMD, they're doing the exact same thing with the new releases coming out for the 6000 series GPU. Nvidia saw this trend and released the 3080 TI for a stupidly high price because they are controlling the supply count of their GPU and create demand for it purposely. There's really no way to stop it.

[bmx6454]

i mean, it can be a combination of things, no? demand from crypto definitely adds to price increase and short supply, as it is demand lol. i do agree that it isn't solely the fault of miners or anything, and i don't see a problem with buying cards for crypto mining anyway.

edit: i blame scalpers for the main cause of the current shortage, they are also adding to increased price as i see a lot of companies raising prices as a response to what they see the scalped ones go for.

[leclod]

1 hour ago, c00face said:

but the supply isn't "being bought out" by miners. It's being controlled by the company itself.

 

Which company, Nvidia, AMD, ASUS, MSI... ? Who is reaping the benefit ? I'd think the chip prices from Nvidia and AMD are stable.

 

1 hour ago, c00face said:

Porsche has been doing this for years to keep their vehicle inflated and as we move forward

Porsche asks a fair price for their cars, like many others, so what ?

Don't buy it.

1 hour ago, c00face said:

Mark my words, even if mining ends, these GPU prices won't go away nor will these inflated car prices.

Prices are going down here

 

You sound like those conspiration people

[c00face]

7 minutes ago, leclod said:

Which company, Nvidia, AMD, ASUS, MSI... ? Who is getting the benefits ? I'd think the chip prices from Nvidia and AMD are stable.

 

Porsche sells their cars expensive (not that expensive though) so what ?

Don't buy it.

Prices are going down here

Uh what? What do you mean what company is getting benefited in doubling their revenues from the inflation? /s Chip prices are stable? You mean GPU selling for 2k is stable? Uh no. The cost it takes to make the GPU versus selling is not stable. Is like buying a paper clip for triple the price.

Porsche is used as an example to bad malpractice and how they purposely inflate their car prices by controlling the supply. "Don't buy it." Ok, using that logic, don't buy GPU's for years to come then.

Prices are not going down here. Where do you see prices are going down? Last time I checked, prices are still, if not, higher than what it is. And it'll stay that way until these companies start producing more GPU's, but why would they if they can manufacture less and charge double for the value? They'll make more revenue, and there's no real incentives to start producing more supply as there's no competition.

[TetraSky]

Another day, another crypto miner trying to defend themselves unprompted.

 

It's a combination of things and miners buying up all the cards along with scalpers, are not helping the situation. That's it. That's all that is needed to be said. Everything else, other than the shortage and rising base material prices, can't be proven. Because companies are still selling them at or near MSRP, it's the retail stores that are increasing the price to match the demand (case in point, LMG being able to get cards from the manufacturers at those prices).

[BuckGup]

1 minute ago, TetraSky said:

Another day, another crypto miner trying to defend themselves unprompted.

It's to balance out the threads of entitled gamers whining how they need a GPU more than anyone else

[Blademaster91]

I think its a combination of miners buying a lot of cards, like look at some miners have have a whole room full of GPU's on racks, and scalpers aren't helping either. And people willing to pay the inflated prices are also to blame, because paying twice as much for a GPU only tells companies that you're fine paying more for a graphics card.

[Sauron]

1 hour ago, c00face said:

But the main problem has always been the controlled supply. Rather it be AMD or Nvidia or Ford or any other company that is using this malpractice to gain riches... they are in-fact limiting the supply of these hardwares for this very purpose to inflate prices for more $.

What does nVidia have to gain from inflating the retail price of cards made with their gpus? They don't get any more money from doing so... AIB partner prices are established well in advance of the cards hitting retail in the first place. Those partners themselves also still sell those cards at the same price for bulk orders from retailers. It's just the retailers who get more money.

[c00face]

3 minutes ago, TetraSky said:

Another day, another crypto miner trying to defend themselves unprompted.

 

It's a combination of things and miners buying up all the cards along with scalpers, are not helping the situation. That's it. That's all that is needed to be said. Everything else, other than the shortage and rising base material prices, can't be proven. Because companies are still selling them at or near MSRP, it's the retail stores that are increasing the price to match the demand (case in point, LMG being able to get cards from the manufacturers at those prices).

So blame the consumer but not the company that controls the supply. Is as I said, the supply is being controlled that is causing massive upsurge of prices. They're not selling it for MSRP, just look at the 3080 ti.

[c00face]

1 minute ago, Blademaster91 said:

I think its a combination of miners buying a lot of cards, like look at some miners have have a whole room full of GPU's on racks, and scalpers. And people willing to pay the inflated prices are also to blame, because paying twice as much for a GPU only tells companies that you're fine paying more for a graphics card.

This is true. I guess the point I'm making is that it can end if the company actually put in some effort to start producing more supply and find a solution to the chip shortages. But they won't because what incentives would that bring to them. They are making bank with the inflation and controlling the supply will help their end-of-year revenue.

[c00face]

13 minutes ago, Sauron said:

What does nVidia have to gain from inflating the retail price of cards made with their gpus? They don't get any more money from doing so... AIB partner prices are established well in advance of the cards hitting retail in the first place. Those partners themselves also still sell those cards at the same price for bulk orders from retailers. It's just the retailers who get more money.

This is not entirely true. They have a lot to gain from inflating the prices, just because you don't see what deals are being made doesn't mean it's just black and white contracts. What percentage does nVidia have with AIB partners with selling their cards? What royalties do they get? Is there some kind of special agreement that allows them to take a cut of the profits from AIB selling their products? There's a lot of things you are misrepresenting. There's a reason why their revenue for 2020 and 2021 has skyrocketed up to 40% of 2020 during the pandemic and on track to surpass that amount in 2021.

And btw, 2021 hasn't even ended and they're already up 54% in revenues. So, yes, they have a lot to gain and are gaining massively.

--edited--- 

I am wrong. 2021 they are up 84%.

[Sauron]

11 minutes ago, c00face said:

This is not entirely true. They have a lot to gain from inflating the prices, just because you don't see what deals are being made doesn't mean it's just black and white contracts. What percentage does nVidia have with AIB partners with selling their cards? What royalties do they get? Is there some kind of special agreement that allows them to take a cut of the profits from AIB selling their products?

While I can't say for certain what the exact terms of the contracts are, I can absolutely assure you that the prices are not being changed as a function of the retail price. This is how it always works with supplier contracts; if nVidia could change the asking price at a whim the AIB partners would be royally screwed and they would never accept such an agreement. Similarly, bulk order prices are usually worked out with retailers in advance.

11 minutes ago, c00face said:

There's a reason why their revenue for 2020 and 2021 has skyrocketed up to 40% of 2020 during the pandemic and on track to surpass that amount in 2021.

And the reason is that they are selling every chip they produce, not that they are increasing the price of the chips.

 

There isn't less supply compared to previous generations, there is simply a lot more demand, partially due to the pandemic. Nvidia sells more chips every year, not fewer. https://www.pcgamer.com/nvidia-market-share-q2-2020/

[tikker]

20 minutes ago, c00face said:

This is true. I guess the point I'm making is that it can end if the company actually put in some effort to start producing more supply and find a solution to the chip shortages.

And just like the dozens of threads before you you assume solving the pandemic and its issues is a straightforward matter of "simply producing more" and hitting the turbo button on our resource gatherers. Production lines are already allocated, perhaps at (more than) capacity and you can't simply pull more factories out of the ground in a week. Add to that that you have zero idea of how the situation will evolve, so any substantial increase in production capacity now may backfire as big losses once this is over and that capacity is no longer needed.

20 minutes ago, c00face said:

But they won't because what incentives would that bring to them.

Even more profit, because they would be able to produce more units and people have al ready shown time and again to be willing to pay insane prices to get their hardware fix.

14 minutes ago, c00face said:

This is not entirely true. They have a lot to gain from inflating the prices, just because you don't see what deals are being made doesn't mean it's just black and white contracts. What percentage does nVidia have with AIB partners with selling their cards?

I might be wrong, but to my knowledge these contracts are set long before. Like you and I now agree I will sell you a million 4080s next year for $699 a pop, you subsequently make a deal with <random store> to supply them at $899 a piece. I cannot next year suddenly say ah sorry mate, I want more profit so they're now $899 and you cannot mid-next year suddenly say oh sorry, they're now $1299 for you. In both cases that'd be a breach of contract. What <random store> can do is decide to charge $1299 to make extra money or attempt to control their stock a tiny bit.

14 minutes ago, c00face said:

There's a reason why their revenue for 2020 and 2021 has skyrocketed up to 40% of 2020 during the pandemic and on track to surpass that amount in 2021.

Part of that reason was because at some point practically every single GPU on the planet was sold out. Even on second hand markets were dry as a desert. So a big portion of that profit comes from record sales.

 

The only cards Nvidia themselves are selling are the FE models and they still go for MSRP. Third party cards unfortunately don't.

[c00face]

3 minutes ago, Sauron said:

While I can't say for certain what the exact terms of the contracts are I can absolutely assure you that the prices are not being changed as a function of the retail price. This is how it always works with supplier contracts; if nVidia could change the asking price at a whim the AIB partners would be royally screwed and they would never accept such an agreement. Similarly, stock prices are usually worked out with retailers in advance.

And the reason is that they are selling every chip they produce, not that they are increasing the price of the chips.

 

There isn't less supply compared to previous generations, there is simply a lot more demand, partially due to the pandemic. Nvidia sells more chips every year, not fewer. https://www.pcgamer.com/nvidia-market-share-q2-2020/

This is wrong again. I am positive they already worked out inflated prices back in 2020 before releasing the new GPU's for 2021, resulting in a massive 84% in revenues before end-of-year in 2021. Whatever contracts they have, we don't know, but to say they aren't gaining from it, is just not true.

You're quoting Q2-2020 as production for these chips was already in place/order before the pandemic. Even still, the spike in their revenues increased dramatically in Q3, not Q2 as it was in the millions. But as soon the pandemic hits and inflated prices were surging, by end of Q3, they were up 54% in revenues in the billions, not millions. They have a lot to gain from inflated GPU chips. And controlling the supply will probably be, for most business, a new model.

[Mark Kaine]

tldr: we know.

 

 

but actually it was in 2017, amd gpus were so cheap miners bought them all basically (which spiraled up to GTX1080ti also being "scalped")

 

13 minutes ago, tikker said:

FE models and they still go for MSRP.

that is depending on your location untrue, NV doesnt sell FE cards in Europe period, not for MSRP or else… 

[Sauron]

3 minutes ago, c00face said:

This is wrong again. I am positive they already worked out inflated prices back in 2020 before releasing the new GPU's for 2021, resulting in a massive 84% in revenues before end-of-year in 2021. Whatever contracts they have, we don't know, but to say they aren't gaining from it, is just not true.

You sound very confident for someone who admits they don't know how industrial supply contracts work.

 

For a real world example, the company I work for just signed a contract that establishes a fixed price for the next 3 years of supply of a certain component. Those prices are now set in stone and cannot be altered; the only leeway the supplier has is regarding their ability to actually supply those parts in due time since they are also affected by the worldwide shortages. Under no circumstance can they demand a higher price while the contract is valid.

4 minutes ago, c00face said:

You're quoting Q2-2020 as production for these chips was already in place/order before the pandemic.

I'm quoting Q2 2020 as evidence that their revenue increases all the time because the demand increases all the time.

6 minutes ago, c00face said:

But as soon the pandemic hits and inflated prices were surging, by end of Q3, they were up 54% in revenues in the billions, not millions.

Q3 coincided with a card launch which inevitably causes a demand surge.

6 minutes ago, c00face said:

They have a lot to gain from inflated GPU chips.

You've still shown nothing to back up this baseless presupposition.

[Blademaster91]

23 minutes ago, tikker said:

And just like the dozens of threads before you you assume solving the pandemic and its issues is a straightforward matter of "simply producing more" and hitting the turbo button on our resource gatherers. Production lines are already allocated, perhaps at (more than) capacity and you can't simply pull more factories out of the ground in a week. Add to that that you have zero idea of how the situation will evolve, so any substantial increase in production capacity now may backfire as big losses once this is over and that capacity is no longer needed.

Production is at capacity but I doubt nvidia can't just have more made, I mean they keep adding more SKU's to the product stack.

23 minutes ago, tikker said:

Even more profit, because they would be able to produce more units and people have al ready shown time and again to be willing to pay insane prices to get their hardware fix.

Why should Nvidia or AMD make more when they're making record profits on less?

23 minutes ago, tikker said:

I might be wrong, but to my knowledge these contracts are set long before. Like you and I now agree I will sell you a million 4080s next year for $699 a pop, you subsequently make a deal with <random store> to supply them at $899 a piece. I cannot next year suddenly say ah sorry mate, I want more profit so they're now $899 and you cannot mid-next year suddenly say oh sorry, they're now $1299 for you. In both cases that'd be a breach of contract. What <random store> can do is decide to charge $1299 to make extra money or attempt to control their stock a tiny bit.

Why sell a million 4080's when you could sell half a million for $1200, as now thats less GPU wafers to pay more and less shipping to pay for, yet now you're making more. And people would still be willing to pay $1200 and whatever the store wants to add for their profit.

23 minutes ago, tikker said:

Part of that reason was because at some point practically every single GPU on the planet was sold out. Even on second hand markets were dry as a desert. So a big portion of that profit comes from record sales.

 

The only cards Nvidia themselves are selling are the FE models and they still go for MSRP. Third party cards unfortunately don't.

And miners probably got a large amount of RTX 3000 cards either directly or from suppliers before retailers can order them, theres no way Nvidia would have records sales from such a shortage if stores have nothing in stock most of the time.

I haven't seen an RTX 3000 FE card for sale, the cards retailers get out of stock in a few seconds.

[IkeaGnome]

23 minutes ago, c00face said:

So blame the consumer but not the company that controls the supply. Is as I said, the supply is being controlled that is causing massive upsurge of prices. They're not selling it for MSRP, just look at the 3080 ti.

You realize the MSRP that AMD and NVIDIA put out are for THEIR SKUs, not AIBs. Yes AIBs SHOULD be close to that, but haven't for a while. 

Even the 2070 had MSRP of $499. The Asus Rog Strix was $599 and people weren't complaining then.

5 minutes ago, Blademaster91 said:

I haven't seen an RTX 3000 FE card for sale, the cards retailers get out of stock in a few seconds.

Here in the states, Best Buy is actually one of the better places to get them. You have to go to the stores to check stock regularly, but they are there. 

[c00face]

13 minutes ago, tikker said:

And just like the dozens of threads before you you assume solving the pandemic and its issues is a straightforward matter of "simply producing more" and hitting the turbo button on our resource gatherers. Production lines are already allocated, perhaps at (more than) capacity and you can't simply pull more factories out of the ground in a week. Add to that that you have zero idea of how the situation will evolve, so any substantial increase in production capacity now may backfire as big losses once this is over and that capacity is no longer needed.

Okay, never said this isn't some 'straight forward' solution. The thread is about the incentives nVidia gets from controlling the supply. This isn't a thread about 'producing more' to stop the inflated prices. The question is, what incentives does companies have to stop the inflation if they can charge double or make more through royalties from inflated prices by controlling the supply. To address the 'big losses,' what big losses are you referring too... to the influx of supplies? There won't be an increase of supplies as nVidia already have a general idea how much to produce to stay profitable. The idea that nVidia would just slam the 'more more' button isn't even ideal.

 

19 minutes ago, tikker said:

Even more profit, because they would be able to produce more units and people have al ready shown time and again to be willing to pay insane prices to get their hardware fix.

This is just a lack of understand fundamentals of supply and demand. Nvidia will probably be profitable whatever route they choose, but they'll be 3x as profitable from what they're doing now, which imo, is controlling the supply and prices at insane rates. Q3 2020 and Q2 2021 for nVidia, respectively is 54% for last year, and 84% for this year. Again, what incentives would it benefit nVidia to go back to the 'normal' way if they can MAKE MORE from the inflated prices? And you're wrong, they won't be more profitable than they are now if they chose to increase supply versus controlling it.

 

22 minutes ago, tikker said:

I might be wrong, but to my knowledge these contracts are set long before. Like you and I now agree I will sell you a million 4080s next year for $699 a pop, you subsequently make a deal with <random store> to supply them at $899 a piece. I cannot next year suddenly say ah sorry mate, I want more profit so they're now $899 and you cannot mid-next year suddenly say oh sorry, they're now $1299 for you. In both cases that'd be a breach of contract. What <random store> can do is decide to charge $1299 to make extra money or attempt to control their stock a tiny bit.

This is hindsight. You're assuming they set contracts for 1 year instead of per chip series or per quarter or whatever the parameters are. Even then, like I stated to the above poster, what royalties does nVidia have with other companies, what % of profits goes back to them from each sales, what other agreements that you don't know about. This isn't just black and white, here's the contract... you buy it, I sell it this price for one year.

 

25 minutes ago, tikker said:

Part of that reason was because at some point practically every single GPU on the planet was sold out. Even on second hand markets were dry as a desert. So a big portion of that profit comes from record sales.

 

The only cards Nvidia themselves are selling are the FE models and they still go for MSRP. Third party cards unfortunately don't.

Yea.. supply and demand. You really think nVidia can beat their Q2-2020 and Q2-2021 sales if they have more supplies going around? Think for a second. If there was enough supply going around and GPU were selling for slightly above MSRP, do you really think they'll have record number sales and with more profits than 84% for Q2-2021 than inflated GPU's?

Again, they have much to gain from inflated chips by controlling the supply than they would to produce more. I'm not sure why nVidia selling a small portion of their FE at MSRP has to do with anything about incentives they get from inflated chips.

[Eigenvektor]

2 minutes ago, c00face said:

The question is, what incentives does companies have to stop the inflation if they can charge double or make more through royalties from inflated prices by controlling the supply.

Because Nvidia isn't making more profits based on consumer prices. They make a profit by selling GPU dies. Those dies are sold at a fixed price that has been set long before they sold the first one. The only way for them to make more money is to sell more dies. They are selling all they can, so they are making a record profit, but since this is not enough to satisfy demand, it's easy to see that they could make even more if they were able to produce more.

 

Don't confuse inflated prices that consumers have to pay to retailers with the prices being asked by Nvidia for their GPU dies. As has been pointed out above, Nvidia has contracts in place for x million GPU dies to be sold at $y. This gives them a certain amount of profit. If they could sell twice as many chips, they would make twice as much profit.

 

The inflated retail prices have no influence on how much profit Nvidia makes. Nvidia only makes a profit for every chip sold to a manufacturer. So their incentive is to sell as many chips as possible.

[FrodoX570]

Rampant consumerism is the issue, entitled people.

[c00face]

12 minutes ago, Sauron said:

You sound very confident for someone who admits they don't know how industrial supply contracts work.

 

For a real world example, the company I work for just signed a contract that establishes a fixed price for the next 3 years of supply of a certain component. Those prices are now set in stone and cannot be altered; the only leeway the supplier has is regarding their ability to actually supply those parts in due time since they are also affected by the worldwide shortages. Under no circumstance can they demand a higher price while the contract is valid.

I never admitted I don't know how industrial supply contracts work. I already corrected you in your thinking. See my comments before. You're assuming black-and-white this is how they set it, this is what they make for the 'next 3 year.' Which is a big load of shit. How do you know what parameters they set? How do you know if it's just not quarterly, or if it's just for certain chips, or for certain GPUs? Stop being arrogant as if you know for sure that's the contract nVidia signed. I never argued about how industrial supply contracts work, I'm merely correcting you for thinking it's black-and-white, as if, there are no other way to be profitable.

 

16 minutes ago, Sauron said:

I'm quoting Q2 2020 as evidence that their revenue increases all the time because the demand increases all the time.

I don't think you're understanding anything I'm quoting you on. I'll repeat it again, they are profitable with their sales. But they are x2 more profitable during the pandemics and shortages than they ever were, having less chips, selling less, and making more through whatever agreements they have. You're quoting Q2 production to try to convince me that they are MAKING MORE, but I'm correcting you, that you're misleading by quoting Q2 production because they were already in production BEFORE the pandemic. Your article has nothing to do with sales, so I have no idea why you're even talking about revenue when clearly you quoted it for another purpose.

 

19 minutes ago, Sauron said:

Q3 coincided with a card launch which inevitably causes a demand surge.

Are you hinting that the reason for their massive revenue during pandemic till now is due to demand because of a card launch and not because of the inflated prices? Where was this massive increase of 84% during the GTX-1000's series, the RTX 2000's series, or for whatever launch they ever had? I'm guessing the RTX-3000's series was just that popular because of ray tracing and that's the reason it saw a 84% in the pandemic, that's the outlier. /s

 

22 minutes ago, Sauron said:

You've still shown nothing to back up this baseless presupposition.

Okay? What's baseless about nVidia public revenues for Q2-2020 till now? It's public. What's baseless about the fundamentals of supply and demand? You want me to quote you an educational resource to explain how it works? I'm just assuming this is all common sense. And if you wanted articles regarding their royalties deal and how much they're making by their contract deals... well, I don't have that kind of access and that's why I'm speculating it in this thread. If you were to have an option to make more money on your product by selling less of it.... any business would do it. It cuts production cost while making the same amount. That's a no brainer. And I am speculating nVidia and most of these car companies will start doing exactly that.

Also, to call my speculation baseless, I think you must live under a rock honestly. Hell, you haven't even posted a damn thing to back anything up besides an article stating that produced 17% more GPU than AMD back in 2019. That's more baseless than my speculation, trying to claim they produced more chips during the pandemic and using wrong timeframes.

[Roswell]

15 minutes ago, c00face said:

Okay, never said this isn't some 'straight forward' solution. The thread is about the incentives nVidia gets from controlling the supply. This isn't a thread about 'producing more' to stop the inflated prices. The question is, what incentives does companies have to stop the inflation if they can charge double or make more through royalties from inflated prices by controlling the supply. To address the 'big losses,' what big losses are you referring too... to the influx of supplies? There won't be an increase of supplies as nVidia already have a general idea how much to produce to stay profitable. The idea that nVidia would just slam the 'more more' button isn't even ideal.

 

This is just a lack of understand fundamentals of supply and demand. Nvidia will probably be profitable whatever route they choose, but they'll be 3x as profitable from what they're doing now, which imo, is controlling the supply and prices at insane rates. Q3 2020 and Q2 2021 for nVidia, respectively is 54% for last year, and 84% for this year. Again, what incentives would it benefit nVidia to go back to the 'normal' way if they can MAKE MORE from the inflated prices? And you're wrong, they won't be more profitable than they are now if they chose to increase supply versus controlling it.

 

This is hindsight. You're assuming they set contracts for 1 year instead of per chip series or per quarter or whatever the parameters are. Even then, like I stated to the above poster, what royalties does nVidia have with other companies, what % of profits goes back to them from each sales, what other agreements that you don't know about. This isn't just black and white, here's the contract... you buy it, I sell it this price for one year.

 

Yea.. supply and demand. You really think nVidia can beat their Q2-2020 and Q2-2021 sales if they have more supplies going around? Think for a second. If there was enough supply going around and GPU were selling for slightly above MSRP, do you really think they'll have record number sales and with more profits than 84% for Q2-2021 than inflated GPU's?

Again, they have much to gain from inflated chips by controlling the supply than they would to produce more. I'm not sure why nVidia selling a small portion of their FE at MSRP has to do with anything about incentives they get from inflated chips.

Nvidia sells chips to card makers at a rate correlated to MSRP. They don’t make anything off of the inflated prices consumers are paying (which are largely controlled by retailers and third party sellers).

 

Nvidia makes more money when they pump out as many chips as they feasibly can. 

[c00face]

19 minutes ago, Eigenvektor said:

Because Nvidia isn't making more profits based on consumer prices. They make a profit by selling GPU dies. Those dies are sold at a fixed price that has been set long before they sold the first one. The only way for them to make more money is to sell more dies. They are selling all they can, so they are making a record profit, but since this is not enough to satisfy demand, it's easy to see that they could make even more if they were able to produce more.

 

Don't confuse inflated prices that consumers have to pay to retailers with the prices being asked by Nvidia for their GPU dies. As has been pointed out above, Nvidia has contracts in place for x million GPU dies to be sold at $y. This gives them a certain amount of profit. If they could sell twice as many chips, they would make twice as much profit.

 

The inflated retail prices have no influence on how much profit Nvidia makes. Nvidia only makes a profit for every chip sold to a manufacturer. So their incentive is to sell as many chips as possible.

This was answered twice already. I'm going to say again, this isn't black and white. You don't know what OTHER agreements nVidia have in place during these times to capitalize on inflated chip prices. Unless you're an insider, you wouldn't know if they are making royalties from other partners, what new agreement was put in place for the new chips, etc... You're assuming nVidia is still hardstuck in these GPU dies for another 2 year. Who are you to say they haven't already renewed new chip prices during the pandemic in Q2-2020.

I am speculating that they ARE profiting from it because of their Q3- 2020 till Q2-2021 sales are MASSIVE increases during the pandemic. Something has clearly changed and I bet it has to do with controlled supplies and keeping prices inflated.

[Sauron]

5 minutes ago, c00face said:

This was answered twice already.

Even if you repeat it 100 times that doesn't make you correct.