[Possibly fake] AMD losing 100+ dollars on every vega sold

[mr moose]

It's alright, they sold 5 of them in Australia and made all their R+D back.  The next 5 will pay for the die costs. 

[MoonSpot]

2 hours ago, DocSwag said:

It's known that HBM2+interposer is around $175; VRMs are probably around $30-$40 ish and say PCB is $20 or something.

 

That would indicate that, according to this estimate, that the die itself costs around $350!!! Isn't that a bit high?

 

I feel like this estimate is pretty far off. I don't think it's likely that the die itself costs that much...

You only think that because you have a brain and used it. 

In what world does 3rd party sellers (AIB, retailers) selling cards for more mean AMD makes more money?  Only in the world where fudzilla writes their articles from & where some of the commenters in this thread come from as far as I can tell.  They clearly have no concept of what distribution chains are, let alone how they work.

No, AMD is not losing $100/card; particularly since gamersnexus coverage nailed down one of the biggest question marks on the BOM cost.  AMD may be making less than they wanted(AKA losing potential profit), but they're not losing $100/card.  This isn't the console market.

[bbqsauce]

the entire article seems pretty sketch imo. 
"industry sources". no hard facts only hearsay. Plus they can't seem to figure out how AMD doesn't profit off retailer markups.
Sure HBM2 was expensive, probably more than what they have anticipated and planned for. however they can surely still take the cost hit easily.(you don't design a card like this and only plan to make like 50 dollars in profit. How can it even cover R&D which should be a big factor. imo they probably planned to make like $200 per card?)  They make money off frontier editions, vega 56 from non full functioning dies. so there is surely wiggle room in there for some loss.
Maybe(we really don't know. judging from BOM cost isn't sufficient information) vega 64 is making a loss or only breaking even. Technically its bad however the vega architecture as a whole is probably still in the green. So even if vega 64 is a flop on the gaming side of things, if sales can cover the cost of their R&D then its still fine imo.
Nobody seems to know anything so we should probably not jump to conclusions

[rawrdaysgoby]

This is like really bad news for AMD 

[Nena Trinity]

1 hour ago, cj09beira said:

not exactly, the problem is that a single hbm2 stack delivers less than 256Gb/s, so it would only be usable for a 480 level card, and even then it would be limiting as the 480 is already very bandwidth limited at 256Gb/s,

and as many AMD new features it suffers from "needs dev support" disease 

there was a rumor sometime ago about a vega chip with 4 hbm2 stacks but we haven't heard anything from it since.

They could maybe use HBM 1 if they most with x2 of 2GB stacks. :3

[Flavio hc 16]

guys we all know why this happened:

When nvidia released the gtx 1080 at 700$ that would have been great for amd, they also had a planned release for end 2016/start 2017. We have seen all the gpu of the 10xx series get higher priced than the 9xx series. So in amd mind they were: we are going to sell the rx 56 for 450/500$ and the rx 64 for 600/650$ and that would be a great bargain, especially considering the fact that you can use freesync and they are great for gpgpu stuff.

Then happened something that nobody was expecting: when you could smell that the 1080ti was in the air, at the start of the year, everyone (myself included) could have betted his own mother that the 1080ti was going to launch at 850/900$ so even if Nvidia would have had the "gpu king", but that would have been still ok for amd, because they would have the best performance/dollar on the high end market (not the enthusiast), BUT then nvidia slashed the price of the 1080/1070 and launched the 1080ti at 700$, so Amd did find itself in a tight spot

[DocSwag]

4 hours ago, Coaxialgamer said:

You're forgetting the actual cooler and retail+AIB cut, which is significant.

Plus , bad yields can actually drive die cost way up . Early in the gtx 480's producion , nvidia had such terrible yields on gf100 that early chips cost them over 500$ to produce , according to semiaccurate . thankfully , they managed to rectify that before retail launch .

 

Also , vega retails at 499 officially . 499$ - ( 175 +20 +40 ) = 265$ for the die and the extra costs

Cooler probably doesn't cost much, maybe $25-$30 ish.

 

AIB cut is a fair point, but I wouldn't expect that to be that much. Maybe $50-$75 per card? Which would still be saying the die costs $250, which makes absolutely no sense...

 

I believe that glofo uses 300 mm wafers. Vega has dimensions around 19.4x25mm. If you plug that into this calculator that gives about 114 dies per wafer. Say yields are around 70%, that's still 80 or so dies per wafer. Wafers are usually a few thousand dollars ish iirc, even if glofo 14nm is super expensive for some reason, say $10000 per wafer, that still means Vega dies cost around $125 ish, enough for 64 to be making a decent profit and 56 barely making one.

http://www.silicon-edge.co.uk/j/index.php/resources/die-per-wafer

 

EDIT: I didn't even factor in that a fair bit of the dead dies probably can be used for Vega 56, which lowers die costs even more.

2 hours ago, MoonSpot said:

You only think that because you have a brain and used it. 

In what world does 3rd party sellers (AIB, retailers) selling cards for more mean AMD makes more money?  Only in the world where fudzilla writes their articles from & where some of the commenters in this thread come from as far as I can tell.  They clearly have no concept of what distribution chains are, let alone how they work.

No, AMD is not losing $100/card; particularly since gamersnexus coverage nailed down one of the biggest question marks on the BOM cost.  AMD may be making less than they wanted(AKA losing potential profit), but they're not losing $100/card.  This isn't the console market.

Yeah, I don't doubt that amd doesn't make much on Vega especially when hbm2+interposer is in the range of $175, but I still would imagine they'd be making SOME profit.

[Misanthrope]

So they're loosing money to keep nobody but miners happy?

 

[Dylanc1500]

9 minutes ago, Misanthrope said:

So they're loosing money to keep nobody but miners happy?

 

Here is a conspiracy (im thinking out loud) it's possible they couldn't hold of the launch any longer due to pressure from investors, they didnt plan on nvidias cards being priced at the point they are and so to try and capatalize and sell as many cards as possible, they pushed for miners to buy them all (driver update). Knowing that favoring miners would hurt their image they released the gaming packs as a means of showing that they were trying to prevent miners from getting them. Who knows!!! It's a conspiracy man!!

 

I honestly have no idea.

[Juanitology]

5 hours ago, Coaxialgamer said:

You're forgetting the actual cooler and retail+AIB cut, which is significant.

Plus , bad yields can actually drive die cost way up . Early in the gtx 480's producion , nvidia had such terrible yields on gf100 that early chips cost them over 500$ to produce , according to semiaccurate . thankfully , they managed to rectify that before retail launch .

 

Also , vega retails at 499 officially . 499$ - ( 175 +20 +40 ) = 265$ for the die and the extra costs

499 - AIB cut(around 15-20%) and retail cut(around 5%) and you're left with 375-400.Suppose it's 400. 400-175(HBM+interposer)-20(PCB)-40(VRM)-30(cooler) leaves you with 135USD. You gotta figure the die costs at least 100USD, and then they have all the marketing, staffing, R&D, taxes, and so on. I don't know if it's as high as 100 dollars lost per card, but they're definitely losing money with each unit sold which is part of the reason why they're not flooding the market with cards. 

[suits]

5 hours ago, Bouzoo said:

This shouldn't matter in the end because I've yet to see a Vega card that is selling below $600 (or $649 for that matter), and that's in the US. God forbid you look on other continents. You can bet AMD is not losing money. 

Someone will correct me if the unicorn exists. 

It matters because AMD doesn't get a percentage of the cards sold per say. The example here would be AMD charges $400 for the card, Amazon then buys the card with the suggested price of $500. Now amazon could sell it for $600. That would give Amazon a $200 profit rather than a $100 profit. It doesn't give AMD any more money at all.

 

[AnonymousGuy]

Yeah I'm calling bullshit on this.  Why would AMD even sell it if it's costing them money?  They would just scrap the project.

[Taf the Ghost]

49 minutes ago, AnonymousGuy said:

Yeah I'm calling bullshit on this.  Why would AMD even sell it if it's costing them money?  They would just scrap the project.

Being completely out of the market would be worse than losing money on the R&D side of things in the early going. AMD is still making back the physical production costs of the cards, it's the other costs that they're probably rolling even or a "loss" on.

 

However, Vega is an entire professional Card stack that goes for a whole lot more. The really amazing product from their entire Vega product line is the Vega SSG, a 7000USD card. That's where they're going to make the money on Vega.

[TOMPPIX]

they need to fire the fucker in charge at radeon technologies group.

[Prysin]

13 hours ago, Bouzoo said:

This shouldn't matter in the end because I've yet to see a Vega card that is selling below $600 (or $649 for that matter), and that's in the US. God forbid you look on other continents. You can bet AMD is not losing money. 

Someone will correct me if the unicorn exists. 

that doesnt mean AMD gets that money. price hikes due to insufficient supply are usually done at the importer/retailer level, NOT manufacturing and design. This price hike is benefitting Newegg, Amazon, BestBuy, Overclockers, Komplett etc and those who supply them with cards

[Ginger_]

13 hours ago, DocSwag said:

It's known that HBM2+interposer is around $175; VRMs are probably around $30-$40 ish and say PCB is $20 or something.

 

That would indicate that, according to this estimate, that the die itself costs around $350!!! Isn't that a bit high?

 

I feel like this estimate is pretty far off. I don't think it's likely that the die itself costs that much...

You forgot assembly cost, shipping cost, cooler costs, the die price you mentioned.. Easily 500 for them.

 

I work for an oem, and just as an example, we use one of the cheapest companies in China to do some base assembly. In that cost the charge us $8 for the base price and installation of a 16gb class four micro SD. Buying them bulk only costs around $4 each, so they make $4 for popping in an SD. 

 

The point im trying to make anyway is just the assembly and testing price for Vega is going to be a fairly large chunk, plus all of the other considerations I mentioned. 

[Delicieuxz]

This claim is relying on an anonymous industry source. Does that anonymous industry source have access to the bulk pricing that AMD pays for materials and production? We don't know that, or who the anonymous industry source is.

 

Personally, I don't believe it. But I'm interested to see further information to confirm or debunk the claim.

[Delicieuxz]

14 hours ago, DocSwag said:

It's known that HBM2+interposer is around $175; VRMs are probably around $30-$40 ish and say PCB is $20 or something.

 

That would indicate that, according to this estimate, that the die itself costs around $350!!! Isn't that a bit high?

 

I feel like this estimate is pretty far off. I don't think it's likely that the die itself costs that much...

 

Those look like prices that would be paid if an individual were buying single items of those things, and not millions of them. Electronic components vastly decrease in price depending on the size of an order, and can go from dollars per piece when buying 1 - 10,  to cents per piece when buying thousands. And AMD would likely be buying parts by the millions, along with having other bonus account cred that gets them prices even lower than normal bulk orderers could, since AMD is a guaranteed consistent and long-term purchaser.

 

[cj09beira]

14 hours ago, valdyrgramr said:

The last actual information was the ASUS card, and nobody talked about it since.  I think it was semi-confirmed by AMD, but AMD stated they aren't working on it themselves.

https://hothardware.com/news/asus-building-radeon-rx-vega-64-x2-dual-gpu Then when AMD was asked about it they said something along the lines of, "We're not restricting anyone on the customization level."

the rumor i am talking about is a single die with 4 hbm2 stacks not multiple dies, they were calling it vega 20

[Mihle]

BS.

No way AMD would sell a card they dont earn anything on.

[DocSwag]

2 hours ago, Delicieuxz said:

 

Those look like prices that would be paid if an individual were buying single items of those things, and not millions of them. Electronic components vastly decrease in price depending on the size of an order, and can go from dollars per piece when buying 1 - 10,  to cents per piece when buying thousands. And AMD would likely be buying parts by the millions, along with having other bonus account cred that gets them prices even lower than normal bulk orderers could, since AMD is a guaranteed consistent and long-term purchaser.

 

Hence why I'm basically giving worse case scenarios yet it STILL doesn't make sense.

[MeDownYou]

Guess my 280 stays til Navi/volta

 

Meh... Well will give me time so save I guess

[rawrdaysgoby]

They are most likely losing money truth to be told.... I mean which big company isn't buying in bulk... sheesh.... if even the base cost you guys say it is around oh you get 200$ left if you can throw that into shipping, packaging, labor cost, etc they might be barely even trying to break even hell vega 56 is even 100$ cheaper.... 

The only reasons they are selling vega might be to wait for a better supply, to get something out that they have been saying for ages to clam people down, not totally waste the millions they spent to develop Vega, Become a lost leader to gain market share like costco does with  their chicken/hotdogs etc

[anonvx]

considering all of this I doubt they are loosing money. Especially if they buy in bulk. We don't know how much they are paying for each part. Maybe they made a deal with a manufacturer saying "hey ill buy hmb2 from you, if you give me a huge discount on whatever". Also maybe AMD is just making it look like this so they can drop the price lower and NVidia wont see it coming.

[Doobeedoo]

Well that would really suck, I can get the gain the market share first, profit later on, but still. If this is so, it's very odd. Even used 2 HBM2 packages opposed to 4 HBM1 before but overall it seems it's still a very expensive package for the card. I guess we'll see how custom cards will sell.