Nvidia CEO: 'We're Not Anywhere Near' Meeting GPU Demand

[Ryujin2003]

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In an uncharacteristically frank comment during a recent interview with TechCrunch, Nvidia CEO and co-founder Jen-Hsun Huang called out the surging demand for graphics cards, and admitted that Nvidia is struggling to get enough hardware into circulation to quench that demand.

"We're sold out of many of our high-end SKUs, and so it's a real challenge keeping [graphic cards] in the marketplace for games ... we have to build a whole lot more [...]," Mr. Huang said. "We've got to come closer to the demand of the market. And right now we're not anywhere near close to that and so we're just going to have to keep running."

None of this is new, as we have all experienced this recently. Miners have taken our precious, and we haven't been able to get it back. I think this is the first time Nvidia has admitted to having a production not demand issue, but I believe the timing is a little odd for this...

 

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Nvidia has taken tepid steps toward boosting sales to gamers by encouraging retailers to impose quantity restrictions at checkout, but it's not uncommon for larger mining operations to flash cash in front of a retailer and buy out their entire stock, often before it's arrived on the shelves. Sometimes those mining farms will also go directly to GPU board partners who design custom versions of AMD and Nvidia graphics cards and buy directly.

Nvidia shares the supply problem with AMD. Both companies have stated they're willing and able to manufacture as much as the market can bear, but the core issue is a global DRAM shortage which affects availability of video memory types like GDDR5 and HBM2. One key reason for this is that in 2017 the leading memory manufacturers diverted a large portion of their resources to producing DDR4 memory for smartphones. As ExtremeTech's Joel Hruska points out, that demand has "stripped the market bare" and we're still recovering.

 

That's something Nvidia and AMD have no control over. As a result, we've seen graphics cards selling for sometimes double their MSRP. It's been this way for months, and even last-generation GPUs are fetching a decent price in the used market.

I'm glad they mentioned this. Nvidia's attempt to White Knight here hasn't really shown to impact anything at all from what I've been able to tell. I can go into any tech store and STILL not be able to find a GPU. Nvidia imposed a restriction, something that hasn't been followed through. There weren't any repercussions from Nvidia for slowing supply to chains or suppliers that continue to sell mass volumes to the same consumer. The local Best Buy here definitely doesn't. There is money to be made, so who are they to turn away a profit?

 

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To Nvidia's credit, they also sell Founders Edition SKUs of their 10-Series graphics cards directly from their website at MSRP, although it's rare to find them in stock. It'd be great to see AMD doing the same thing with their reference designs.

This one annoys me. Thank goodness Nvidia is here to save the day by limiting the purchase of a perpetually out of stock item... Again, the benefits to the global PC society has been felt... /s

 

Sarcasm aside, this can be beneficial to those waiting for GPU's; however, Nvidia still has to balance their own supply with other vendors. I wonder if there are requirements for them to ship to 3rd party vendors instead of trying to sell exclusively on their own. I would assume there is either a contract or higher quantities of money guiding that decision.

 

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Opposing Views

That said, Nvidia and AMD seem to hold slightly opposing opinions about the lifespan and sustained strength of cryptocurrency mining.

AMD's stance seems excessively cautious based on their annual report, filed February 2018, in which they state: “The cryptocurrency market is unstable and demand could change quickly. For example, China and South Korea have recently instituted restrictions on cryptocurrency trading, If we are unable to manage the risks related to a decrease in the demand for cryptocurrency mining, our GPU business could be materially adversely affected.”

Also in February 2018 Nvidia's Mr. Huang stated that it's "not going away" and added "[...] crypto was a real part of our business this past quarter, even though small, overall." In fact, another portion of his interview with TechCrunch reveals his personal philosophy on cryptocurrency and why he believes it's here to stay. "[...] there are supercomputers in the hands of almost everybody in the world so that no singular force or entity can control the currency."

The word "demand" can have different implications depending on which company it's coming from. I believe AMD has the most to lose because it's historically considered the champ in terms of raw compute power as it relates to mining the most popular coins.

It starts out as an explanation to gamers, but then the discussion shifts to mining. The article casts doubt on AMD's belief in crypto mining and argues about reinforcing Nvidia's resolve to supporting the future of Crypto... Seems odd..

 

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The takeaway here is that Nvidia is setting expectations, which is smart. And it's certainly doing everything in its power to ramp up production to whatever levels are needed, but is handicapped by factors like memory shortages. Ramping up production in that sector is not an overnight process. Assuming that the cryptocurrency market remains flat -- or continues slowly dipping -- and the leading manufacturers of memory can vastly increase production, we should see GPU supply begin to quench the demand by Q4 2018.

For PC gamers, it could be a very long wait.

 

 

We all know that mining and gaming are conflicting.. So why did I think this article was important enough to post? Because given the recent issues with GPP and such, this article really comes across as a PR stunt. An attempt to shine positive light on Nvidia right now, and paint them as the good guy. AMD doesn't think Crypto is sustainable, but we (Nvidia) do, so come to us. The GPP is in effect, but it don't mean a thing if it ain't got that swing... So, I also believe this is to kinda of show positive light on this as well. AMD has supply issues as well, so Nvidia is making this statement to show that they fully intend to meet the demands placed on them.

 

This can definitely be good for the community.... But with the way this is worded, I can't help but feel a slant against AMD in this... And it gives me the impression this article is written for some positive PR that Nvidia needs to sweep some things under the rug and hope people forget about it... I really feel this conversation had alterior motive.

 

I would really like to get my hands on the full transcript instead of select statements from the interview. I think it might provide better insight into the direction of the conversation...

 

What do you all think? Am I far off on my assessment about this basically being a PR stunt? I mean, we all know crypto and gaming have caused issues with GPU supply.... Or is this just about Nvidia making a promise to the community and nothing more?

[AlTech]

As a result of the Nvidia GPP and other shady behaviour Nvidia participates in (see GameWorks and Planned Obsolescence) (also see Nvidia forcing GeForce users to sign into GFE 3.0 to get new game ready drivers.) , I will not be purchasing products from Nvidia unless they substantially change their attitude.

[samcool55]

If they sell really as good as they say, why is GPP required then? The idea of "we don't want to spend money on marketing and giving our competitor a sell because of it" isn't exactly valid then because they sell out anyway. It's difficult to measure potential improvements due to GPP for nvidia if they sell 100% of what they produce anyway.

[Mihle]

27 minutes ago, samcool55 said:

If they sell really as good as they say, why is GPP required then? The idea of "we don't want to spend money on marketing and giving our competitor a sell because of it" isn't exactly valid then because they sell out anyway. It's difficult to measure potential improvements due to GPP for nvidia if they sell 100% of what they produce anyway.

GPP is not a short term plan for Nvidia, it's a longer term one.

 

Nvidia try to shift gamers to their cards most as possible.

Even if that means they sell the same ammount if cards, they know that gamers is much more lojal than miners. 

So if the mining craze dies, they will have even more % of the GPU sales because gamers would stick around but miners wouldn't.

[AlTech]

29 minutes ago, samcool55 said:

If they sell really as good as they say, why is GPP required then?

Because Nvidia wants to have 95% market share instead of ~ 80%.

 

They know they can never have 100% marketshare otherwise the FTC would force them to split into 2 companies to prevent a monopoly.

[Razor01]

8 minutes ago, AluminiumTech said:

Because Nvidia wants to have 95% market share instead of ~ 80%.

 

They know they can never have 100% marketshare otherwise the FTC would force them to split into 2 companies to prevent a monopoly.

 

 

Right now nV has 92% of the VR market (oculus rift released their user data), I think they already have mid to high 80's in gaming market.

 

And no FTC doesn't split companies up willy nilly, a monopoly that occurs due to competition, when one company can't keep up, that is not cause to break up a company.  So if AMD withdraws from the dgpu because they can't keep up with R&D or what ever, yeah nV can get 100% of the marketshare and still operate just the same way as before.

 

 

[Okjoek]

Is it possible for GPU manufacturers to effectively implement planned obsolescence? If so that's what scares me the most with the prospect of a monopoly in the GPU market.

 

 

[BuckGup]

1 minute ago, Okjoek said:

Is it possible for GPU manufacturers to effectively implement planned obsolescence? If so that's what scares me the most with the prospect of a monopoly in the GPU market.

 

 

They already do it

[AncientNerd]

4 minutes ago, Razor01 said:

And no FTC doesn't split companies up willy nilly, a monopoly that occurs due to competition, when one company can't keep up, that is not cause to break up a company.  So if AMD withdraws from the dgpu because they can't keep up with R&D or what ever, yeah nV can get 100% of the marketshare and still operate just the same way as before.

 

 

Oh I don't know they did exactly this to Honeywell in the 50's, IBM in the 70's, threatened to do this to MS in the 90's, did this to AT&T in the 80's. Basically it's a combination of owning market-share, plus non-competitive acts, plus non-consumer acts (i.e., raise your prices unilaterally). Even a 90% market-share is enough to get the attention potentially. 

[asus killer]

see if i get this right:

 

Nvidia can flex is muscles and force AIB's to only use their gaming brands on Nvidia products

 

Nvidia is completely and utterly impotent to force anyone it works with not to sell 1.000 cards to a single individual. It's market what can we do ¯\_(ツ)_/¯ 

 

I'm gonna call this PR BS. 

[Razor01]

1 minute ago, Okjoek said:

Is it possible for GPU manufacturers to effectively implement planned obsolescence? If so that's what scares me the most with the prospect of a monopoly in the GPU market.

 

 

 

There is no such thing as future proofed hardware anyways.  In 1 to 2 gens your high end hardware becomes mid range and sometimes low end. 

 

 

[Razor01]

2 minutes ago, AncientNerd said:

Oh I don't know they did exactly this to Honeywell in the 50's, IBM in the 70's, threatened to do this to MS in the 90's, did this to AT&T in the 80's. Basically it's a combination of owning market-share, plus non-competitive acts, plus non-consumer acts (i.e., raise your prices unilaterally). Even a 90% market-share is enough to get the attention potentially. 

 

 

Err that was because they were using monopolistic practices to increase or keep their marketshare.  different things.  The threat was enough to stop them.  A natural monoploy can occur under normal market conditions and the regulatory bodies can't do anything about it.

 

There are specific guidelines for anti trust to be brought up against a company, which has nothing to do with just market share alone.  It has to be market share + other things, like monoplistic tactics, of price fixing, region segmentation etc.

 

Doing an Anti trust, trust busting suite, is not a small undertaking.  If at all possible the FTC would try to avoid that as much as possible.

[AncientNerd]

1 minute ago, asus killer said:

see if i get this right:

 

Nvidia can flex is muscles and force AIB's to only use their gaming brands on Nvidia products

 

Nvidia is completely and utterly impotent to force anyone it works with not to sell 1.000 cards to a single individual. It's market what can we do ¯\_(ツ)_/¯ 

 

I'm gonna call this PR BS. 

This is because they can control the AIBs because they own the parts that the AIBs need, while they are the ones that need the distributors, if Amazon or NewEgg say "sorry Nvidia we don't want to carry your products anymore" Nvidia is in trouble because they have to find a new channel.

[AncientNerd]

1 minute ago, Razor01 said:

 

 

Err that was because they were using monopolistic practices to increase or keep their marketshare.  different things.  The threat was enough to stop them.

 

Doing an Anti trust, trust busting suite, is not a small undertaking.  If at all possible the FTC would try to avoid that as much as possible.

Yes, that's what I said...kind of like what Nvida may be doing with GPP and possible pricing changes. The trouble is we don't have enough of a view into the actual movements - and probably will not until and unless the FTC (or more likely the EU's equivalent) takes an interest.

[AlTech]

3 minutes ago, Razor01 said:

a monopoly that occurs due to competition,

I'm not going to comment on this because it'll make me quite wound up and annoyed.

3 minutes ago, Razor01 said:

when one company can't keep up, that is not cause to break up a company.  So if AMD withdraws from the dgpu because they can't keep up with R&D or what ever, yeah nV can get 100% of the marketshare and still operate just the same way as before.

No they can't.

Just now, Okjoek said:

Is it possible for GPU manufacturers to effectively implement planned obsolescence? If so that's what scares me the most with the prospect of a monopoly in the GPU market.

Yes, Nvidia has been doing this for years. In GameWorks titles they deliberately sabotage older generations performance by using techniques known to tank performance on older GPUs. Then they sell new GPUs and make them run fine.

 

They've also been sabotaging AMD performance in GameWorks to make Nvidia look like the better offering.

 

With RTX, Nvidia will effectively do the same thing.

Just now, Razor01 said:

 

 

Err that was because they were using monopolistic practices to increase or keep their marketshare.  different things.

Nvidia has been doing that. The GPP is aimed at solidifying their market share and increasing it.

 

The Crysis 2 shenanigans and GameWorks have been both about making AMD cards and older Nvidia cards look obsolete and under perform compared to what they should perform under proper optimizations and forcing customers to buy new Nvidia video cards.

[pas008]

wow ignorance is bliss now days

 

business partnerships are wrong now days, must have liberal everyone gets a trophy idea

 

gpp is for product lineup to be simplified for THEIR PRODUCTS not amds,

tell me how many companies share same sub brands as their competitors wow

 

gameworks is nvidias work, if a developer uses it blame them simple as that

 

on topic think everyone knows there isnt enough gpus lol

[Okjoek]

9 minutes ago, BuckGup said:

They already do it

 

8 minutes ago, Razor01 said:

 

There is no such thing as future proofed hardware anyways.  In 1 to 2 gens your high end hardware becomes mid range and sometimes low end. 

 

 

I'm not sure I understand how they're doing it. I mean yeah better products are coming out all the time with incremental improvements, but for someone like me who buys GPUs from the ~100 USD price range maybe only upgrading every half a decade I generally don't see the apps and games I run get worse over time, in fact usually the opposite. That said I don't have a very demanding nor new game library.

[AlTech]

1 minute ago, pas008 said:

wow ignorance is bliss now days

 

business partnerships are wrong now days, must have liberal everyone gets a trophy idea

 

gpp is for product lineup to be simplified for THEIR PRODUCTS not amds,

tell me how many companies share same sub brands as their competitors wow

None because the GPU industry is unique in that AIBs make the products which sell to customers for both AMD and Nvidia.

1 minute ago, Okjoek said:

 

I'm not sure I understand how they're doing it. I mean yeah better products are coming out all the time with incremental improvements, but for someone like me who buys GPUs from the ~100 USD price range maybe only upgrading every half a decade I generally don't see the apps and games I run get worse over time, in fact usually the opposite.

Do you play the newest/latest games? If not then you wouldn't notice it.

 

If you play older games then you'd be more likely to notice it less.

[asus killer]

5 minutes ago, AncientNerd said:

This is because they can control the AIBs because they own the parts that the AIBs need, while they are the ones that need the distributors, if Amazon or NewEgg say "sorry Nvidia we don't want to carry your products anymore" Nvidia is in trouble because they have to find a new channel.

amazon or newegg aren't the problem, you can go there and order a card as much as the guy that want's 1.000, there simply aren't any.

The problem are those selling in bulk, ordering 1000 cards that no one else has the change to even compete to purchase. You can't at the same time be able to force AIB's for one thing and claiming you can't do nothing about this.

[AlTech]

3 minutes ago, pas008 said:

business partnerships are wrong now days, must have liberal everyone gets a trophy idea

An alleged part of the GPP (we have no solid proof either confirming nor denying it) is basically illegal. It's not a legitimate business partnership. OEMs received all the benefits of this program before the GPP even came out. The only difference is the GPP is meant to strong arm OEMs into bullying AMD out of business through anti-competitive means.

[Razor01]

22 minutes ago, AluminiumTech said:

I'm not going to comment on this because it'll make me quite wound up and annoyed.

No they can't.

Yes, Nvidia has been doing this for years. In GameWorks titles they deliberately sabotage older generations performance by using techniques known to tank performance on older GPUs. Then they sell new GPUs and make them run fine.

 

They've also been sabotaging AMD performance in GameWorks to make Nvidia look like the better offering.

 

With RTX, Nvidia will effectively do the same thing.

Nvidia has been doing that. The GPP is aimed at solidifying their market share and increasing it.

 

The Crysis 2 shenanigans and GameWorks have been both about making AMD cards and older Nvidia cards look obsolete and under perform compared to what they should perform under proper optimizations and forcing customers to buy new Nvidia video cards.

Yes they can

 

Major issue of not looking up things before you post.  Go to the FTC site, they have written down the guidelines on how anti trust cases are looked into.

 

Three conditions must be met!

 

having the marketshare

 

doing anti competitive practices (which is written out what are anti competitive and anti consumer practices), Advertising Exclusively with GPP doesn't fall into this category at all.  Advertising is protected by 1st amendment so there is no way the FTC can even go after this directly.

 

https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined

 

As I said they can't go after a company if the monopoly is due to the natural cause of competition.

 

Gameworks, sorry man its thier program, they can do what ever they want with it.  A developer that puts it into their game those features can be turned off on competitors hardware simple as that.

 

Crysis 2, lol, really use the damn engine and you will know why tessellation on that is all whacked when you go into wireframe mode,  the occluders are no longer there so the engine doesn't know what to tessellate and what not to tessellate, yeah I have developed on the Cry engine , 1 and 2, and 3, please.  If you want you can talk to one of the developers of the Cry engine over at B3D, or dl the Cry Engine 4 and test it out, because its got the same problem in wireframe mode!

[Blademaster91]

1 hour ago, Ryujin2003 said:

I'm glad they mentioned this. Nvidia's attempt to White Knight here hasn't really shown to impact anything at all from what I've been able to tell. I can go into any tech store and STILL not be able to find a GPU. Nvidia imposed a restriction, something that hasn't been followed through. There weren't any repercussions from Nvidia for slowing supply to chains or suppliers that continue to sell mass volumes to the same consumer. The local Best Buy here definitely doesn't. There is money to be made, so who are they to turn away a profit?

This one annoys me. Thank goodness Nvidia is here to save the day by limiting the purchase of a perpetually out of stock item... Again, the benefits to the global PC society has been felt... /s

It starts out as an explanation to gamers, but then the discussion shifts to mining. The article casts doubt on AMD's belief in crypto mining and argues about reinforcing Nvidia's resolve to supporting the future of Crypto... Seems odd..

Accusing Nvidia of "white knighting" by at least doing something to get cards back into gamer's hands with a limit of 2 cards per coustomer? What is AMD doing? Their statement is just as much PR bullsh*t while they all too happily sell all their cards to miners and Vega is currently inflated by over $300 at NewEgg for example.

Anyway the rumor is on Tweaktown that Nvidia is listing everything as out of stock in preperation for their next gen cards.

https://www.tweaktown.com/news/61336/nvidia-lists-gtx-10-series-cards-out-stock/index.html

23 minutes ago, Razor01 said:

 

There is no such thing as future proofed hardware anyways.  In 1 to 2 gens your high end hardware becomes mid range and sometimes low end.

No such thing as future proofing on any PC hardware, not sure why people think Nvidia is the only one.

17 minutes ago, pas008 said:

wow ignorance is bliss now days

business partnerships are wrong now days, must have liberal everyone gets a trophy idea

gpp is for product lineup to be simplified for THEIR PRODUCTS not amds,

tell me how many companies share same sub brands as their competitors wow

gameworks is nvidias work, if a developer uses it blame them simple as that

on topic think everyone knows there isnt enough gpus lol

Yeah it's kind of like oh wow,no really? There hasn't been enough cards out for months now.

Nvidia sells significantly more cards under those "gaming" names so why shouldn't they have rights to those gaming sub-branded products? Kind of shocking that people are acting like GPP is even a thing when there is little solid proof yet.

People like to act like AMD is the innocent one that never did anything wrong who always deserves a trophy though, so much emotional BS over billion dollar brands that could all care less about you.

[Razor01]

6 minutes ago, AluminiumTech said:

None because the GPU industry is unique in that AIBs make the products which sell to customers for both AMD and Nvidia.

Do you play the newest/latest games? If not then you wouldn't notice it.

 

If you play older games then you'd be more likely to notice it less.

 

 

Yeah I do, and ever gen I upgrade my graphics cards so I can turn up the settings, when has this ever changed?  Last gen cards just can't turn on all the features.

 

Its like expecting last gen cards to do HDR with new HDR monitors, not going to happen.

 

Its like asking a DX10 card to tesselate just as well as DX11 card not going to happen

 

Its like asking DX8 cards to do DX9 pixel shaders not going to happen.

 

Its like asking the first DX9 cards to do well with dynamic branching with new lighting systems, not going to happen.

[samcool55]

28 minutes ago, AluminiumTech said:

Because Nvidia wants to have 95% market share instead of ~ 80%.

 

They know they can never have 100% marketshare otherwise the FTC would force them to split into 2 companies to prevent a monopoly.

But how are they going to do that if they can't sell more than they already do?

Let's say Nvidia produces 80% of all gpu's and AMD 20%. How are they going to get a 95% market share if they can only provide 80% with cards?

AMD cards won't stay on the shelves if they are nicely priced. They just won't, there are AMD-only AIB's so there will be AMD cards with decent coolers, just not from most of the big brands.

[Okjoek]

2 minutes ago, AluminiumTech said:

Do you play the newest/latest games? If not then you wouldn't notice it.

 

If you play older games then you'd be more likely to notice it less.

Yeah that must be it, because my go-tos are still Planetside 2, Minecraft and Rocket League.