Nvidia have a huge inventory excess problem, 300,000 GPUs returned from a single board partner

[Blebekblebek]

So summary, gamers still not buying GPU despite the cry of shortage?
 

And the one who actually buys them are miners, and miners no longer purchased GPU because the crypto market has been slowing down because of asicc released.

[asus killer]

1 hour ago, Granular said:

Why would Nvidia want people getting 1080Tis for the price of 1060's? They'd have to be basically giving away silicon that cost them money to produce and ensuring lower demand for the next generation cards, when they release. At that point they might as well dump them in the sea. On the other hand, just holding onto them until another OEM is ready to pick them up at the usual price can't cost that much in warehouse space.

again that's not the point, they made the profit now they can take the hit but lowering prices. economy laws of demand and supply can't just work when it makes you a profit. Dumping some with high retail value into the ocean makes no business sense, lower the prices, sell them, delay next gen like they already did. Not to mention the waste of resources it is.

[Granular]

6 minutes ago, asus killer said:

Dumping some with high retail value into the ocean makes no business sense

GPU chips themselves have no retail value. Complete cards do. Complete cards that have to include VRAM.

Either way, it's silly for us to talk  about it here as if we knew more about which is the most profitable course of action for Nvidia than the undoubtedly extremely competent economists they employ.

[mr moose]

OEM returns 300K (drop in the ocean) of product after the mining craze slows up.  Hmmm... someone hold my beer while I go and get a pitchfork... 

[RyokuHasu]

Thanks for sharing this, I'll pass it on to the gaming news community that I moderate.

[Brooksie359]

5 hours ago, mark_cameron said:

 

 

 

Price inflexibility (no to little price drops) when supply outstrips demand

 

Whilst observing rampant price increases when demand outstrips supply :

 

Is a clear indication of potential competition law issues and price fixing in markets.

 

If I were a competition regulator I'd be looking very closely at the GPU market. Right now.

Not increasing supply because demand is voilitile isn't illegal. Also you are missing one of the key things that makes this different. Nvidia isn't the one selling their gpus for higher prices but rather third parties which they have no control over. The whole point if price fixing is to make extra profit but nvidia can't do that unless they start selling their gpus for more which they never did. 

[Misanthrope]

8 hours ago, Brooksie359 said:

The only way to bring down gpu prices was to increase production so they did in order to allow gamers to buy their gpus near msrp. You are right they could have just not ramped up production and keep prices at insane prices for both markets. If they don't increase production people criticize them for artificially inflating the prices of their gpus and if they ramp it up they get criticized for trying to profit off of mining demand. I mean that seems like a lose lose situation where people are going to criticize them either way because they don't like them. Honestly I don't like most of the thing nvidia has done as of late but increasing production to help the gpu pricing go back to normal isn't one of those things. 

So did prices were brought down once they increased production?

 

Or was it more fair to say they were brought down once Ethereum prices subsided and difficulty went up by having viable ASIC?

 

Their increased production helped them sell more cards at the inflated prices but make no mistake: Because of the very nature of crypto-currency mining, demand for hardware doesn't goes down until the price of the coin goes down and the price of the coin usually has nothing to do with mining and more to do with who's buying and selling cryptos: the demand for coin very greatly supersedes the demand for computational power needed.

 

In fact this works out so well that if the crypto currency ever runs low on transactional resources an increase in difficulty can be applied regardless of the actual market value of the coin to incentivize more people providing computational resources. As long as the overall price of the coin is high enough to justify a decent RoI more devices will flood the coins because obviously there's enough demand for the coin for it's price to go up and equal or even exceed the additional demand for more compute.

 

So just because some of you might not understand these concepts doesn't means Nvidia or AMD didn't: the knew that the only 2 things that could actually slow down the overwhelming demand were coin prices and unreachable performance levels from ASIC devices. As long as those 2 factors kept the coin going up in price the demand for GPUs was basically infinite and they could sell as many as they could produce basically.

[Misanthrope]

2 hours ago, Blebekblebek said:

So summary, gamers still not buying GPU despite the cry of shortage?
 

And the one who actually buys them are miners, and miners no longer purchased GPU because the crypto market has been slowing down because of asicc released.

What do you mean by "not buying"?

 

Before mining and outside of product launches, GPUs move at a slow pace: they get purchased but their prices aren't cheap enough that they fly off the shelves they are moved slowly but surely so there's always a selection of brands and products out for customers.

 

Don't expect the market to stay the same as it was under mining if we're back to a consumer product for entertainment purposes, this level of sales is likely normal.

[Brooksie359]

22 minutes ago, Misanthrope said:

So did prices were brought down once they increased production?

 

Or was it more fair to say they were brought down once Ethereum prices subsided and difficulty went up by having viable ASIC?

 

Their increased production helped them sell more cards at the inflated prices but make no mistake: Because of the very nature of crypto-currency mining, demand for hardware doesn't goes down until the price of the coin goes down and the price of the coin usually has nothing to do with mining and more to do with who's buying and selling cryptos: the demand for coin very greatly supersedes the demand for computational power needed.

 

In fact this works out so well that if the crypto currency ever runs low on transactional resources an increase in difficulty can be applied regardless of the actual market value of the coin to incentivize more people providing computational resources. As long as the overall price of the coin is high enough to justify a decent RoI more devices will flood the coins because obviously there's enough demand for the coin for it's price to go up and equal or even exceed the additional demand for more compute.

 

So just because some of you might not understand these concepts doesn't means Nvidia or AMD didn't: the knew that the only 2 things that could actually slow down the overwhelming demand were coin prices and unreachable performance levels from ASIC devices. As long as those 2 factors kept the coin going up in price the demand for GPUs was basically infinite and they could sell as many as they could produce basically.

What the demand for gpus was is irrelevant. They produced more gpus to lower prices as that is how supply and demand work. Infinite demand isn't possible and yeah it was incredibly high but more supply would decrease prices regardless and that was evident awhile back. Again there is no reason to criticize a company for ramping up production to satisfy demand especially if you want gamers to be able to buy gpus as well. 

[Misanthrope]

2 minutes ago, Brooksie359 said:

What the demand for gpus was is irrelevant.

 

Hey I was just quoting you on that:

 

8 hours ago, Brooksie359 said:

The only way to bring down gpu prices was to increase production

 

Seems to me that increasing production is extremely relevant to supply and demand.

 

Quote

They produced more gpus to lower prices as that is how supply and demand work

 

Except that again, I already explained why this is not the case with GPUs and Crypto-mining since yes supply and demand are in effect but the demands for the coins themselves supersedes the demand for the secondary tools for computation like GPUs and ASICs by so much the demand was pragmatically infinite considering these are not easy-to-produce products at all:

 

32 minutes ago, Misanthrope said:

 As long as the overall price of the coin is high enough to justify a decent RoI more devices will flood the coins because obviously there's enough demand for the coin for it's price to go up and equal or even exceed the additional demand for more compute.

 

Supply and demand do not exist in a perfect vacuum: the demand for GPUs is dependent on many factors and chief among them is the demand for the crypto coins themselves. If that goes up then transactional needs go up and then demand for GPUs and ASICs go up in turn. It's not a vacuum and you're only analyzing the very last part of the chain here and assuming Nvidia and AMD can exert control simply by ramping up production, they can't because the demand for cryptos was so high than the rest of the chain went up by a factor greater than all of the capacity for all of their production put together could address.

 

They increased production to take momentary advantage of those inflated prices knowing well they couldn't possibly have a meaningful impact on demand because they can't just decide to open 10 or 100 new fabs. It was orders of magnitude above what they could realistically do to affect demand.

[Brooksie359]

2 minutes ago, Misanthrope said:

 

Hey I was just quoting you on that:

 

 

Seems to me that increasing production is extremely relevant to supply and demand.

 

 

Except that again, I already explained why this is not the case with GPUs and Crypto-mining since yes supply and demand are in effect but the demands for the coins themselves supersedes the demand for the secondary tools for computation like GPUs and ASICs by so much the demand was pragmatically infinite considering these are not easy-to-produce products at all:

 

 

Supply and demand do not exist in a perfect vacuum: the demand for GPUs is dependent on many factors and chief among them is the demand for the crypto coins themselves. If that goes up then transactional needs go up and then demand for GPUs and ASICs go up in turn. It's not a vacuum and you're only analyzing the very last part of the chain here and assuming Nvidia and AMD can exert control simply by ramping up production, they can't because the demand for cryptos was so high than the rest of the chain went up by a factor greater than all of the capacity for all of their production put together could address.

 

They increased production to take momentary advantage of those inflated prices knowing well they couldn't possibly have a meaningful impact on demand because they can't just decide to open 10 or 100 new fabs. It was orders of magnitude above what they could realistically do to affect demand.

Increasing supply is irrelevant to supply and demand? If you read that system and don't realize what is wrong with it then it's hopeless to make you see the obvious. Increasing supply would decrease prices. Demand isn't just going to keep going up infinitely. 

[Quadriplegic]

3 hours ago, Blebekblebek said:

So summary, gamers still not buying GPU despite the cry of shortage?
 

And the one who actually buys them are miners, and miners no longer purchased GPU because the crypto market has been slowing down because of asicc released.

And what was the reason for over saturating the market with chips in the first place? 

Scumbag miners, screwing up not only the rest of consumer base, but now manufacturers as well!

[Misanthrope]

17 minutes ago, Brooksie359 said:

Demand isn't just going to keep going up infinitely. 

If the demand for cryptos goes up inifinitely, it would.

 

If the demand for cryptos goes up 100x or 1000x can you suddenly produce 100x or 1000x gpus? Pragmatically speaking there's no way for TSMC to create 1000x more factories so if the demand is so great it might as well be infinite, it might as well be considered infinite for the purposes of gpu mining.

 

GPUs are a far more finite and hard to produce resource than the macro-economical factors that might increase the demand for cryptos. Case and point: this already happened if you look at bitcoin inflation.

[yian88]

13 hours ago, leadeater said:

Once upon a time a company started doing things I do not agree with, one day they made a product that is the best product to buy, the end.

Not really, id take a Vega 64 over 1080ti anyday but its not AMD who has 300k vegas in unsold stock. 

[Blebekblebek]

3 hours ago, Quadriplegic said:

And what was the reason for over saturating the market with chips in the first place? 

Scumbag miners, screwing up not only the rest of consumer base, but now manufacturers as well!

If you READ THE ARTICLE YOU would find out

 

It was nvidia that holding back the chipset to AIB maker, they were even overstocking the GDDR5 memory as well.

4 hours ago, Misanthrope said:

What do you mean by "not buying"?

 

Before mining and outside of product launches, GPUs move at a slow pace: they get purchased but their prices aren't cheap enough that they fly off the shelves they are moved slowly but surely so there's always a selection of brands and products out for customers.

 

Don't expect the market to stay the same as it was under mining if we're back to a consumer product for entertainment purposes, this level of sales is likely normal.

Does not buying means anything else?

 

High end GPU sales were always slow

it was until mining craze that makes it like it's common to purchased one, or rather in bulk.

 

Obviously nvidia didn't expect to get this far, that statement to prioritize gamers are just PR speech, in the end they are expecting miners to buy it.

[Misanthrope]

14 minutes ago, Blebekblebek said:

Does not buying means anything else?

 

High end GPU sales were always slow

it was until mining craze that makes it like it's common to purchased one, or rather in bulk.

 

Obviously nvidia didn't expect to get this far, that statement to prioritize gamers are just PR speech, in the end they are expecting miners to buy it.

Actually I think we're pretty much in agreement here. I'd add that in the future they might try to replace "miners" for other types of not-fully-professional compute users so I think that they might push the high end more along the lines of the Titan: not a "gaming" only card but it can game if you can afford 1000 bucks (which is what I think their 1180/Titan release will cost)

[mynameisjuan]

3 hours ago, yian88 said:

Not really, id take a Vega 64 over 1080ti anyday

How high are you right now?

[Brooksie359]

3 hours ago, Misanthrope said:

If the demand for cryptos goes up inifinitely, it would.

 

If the demand for cryptos goes up 100x or 1000x can you suddenly produce 100x or 1000x gpus? Pragmatically speaking there's no way for TSMC to create 1000x more factories so if the demand is so great it might as well be infinite, it might as well be considered infinite for the purposes of gpu mining.

 

GPUs are a far more finite and hard to produce resource than the macro-economical factors that might increase the demand for cryptos. Case and point: this already happened if you look at bitcoin inflation.

The roi would get to the point where it isn't worth it before the demand went up enough to offset the increase in supply. They increased supply and prices went down so it worked in the end. 

[GilmourD]

I'd be happy with a 3GB 1060Ti at $150 or even $175. It still being above MSRP in most places is BS.

[corsairian]

I remember at CES i think it was, or some other big tech show. There was a company (Gigabyte or Asus) that were giving away 660s or 760s for free. first come first serve.  I wonder if this will happen with Pascal cards in 2 or 3 years. (once theyre older and not worth much)

[thorhammerz]

10 hours ago, mr moose said:

OEM returns 300K (drop in the ocean) of product after the mining craze slows up.  Hmmm... someone hold my beer while I go and get a pitchfork... 

Shhh, gotta spin the story and make public enemy #2 NVIDIA look bad! 

[Misanthrope]

3 hours ago, Brooksie359 said:

The roi would get to the point where it isn't worth it before the demand went up enough to offset the increase in supply. They increased supply and prices went down so it worked in the end. 

Again not really: the demand for GPUs to mine does not exists in a vacuum: You don't just get a GPU to "create" or "find" coins. Those coins have to actually be used for something resembling exchange of goods and services.

 

So the speculation that drives the prices of the crypto coins up and down is directly tied to how desirable the coins are. The reason why cryptos offer coin "rewards" to miners is to have enough capacity for the decentralized transactions. But all of this rest upon whenever or not BitCoin, Ethereum, etc. Are actually desirable for people.

 

So once they become less desirable, then the rewards for investing in mining hardware and energy consumption decrease, so the people mining also decrease and the balance of how many transactions can be supported immediately follows.

 

So assuming ASICs didn't exist right now and considering only economical factors if BitCoin loses confidence in the market and experiences a price decrease then everything tied to BitCoin goes down with it and that includes the desire to mine cryptocurrencies and henceforth the desire to buy these cards from Nvidia and AMD through no increase or decrease in the supply of available cards the demand for them can, and has lowered.

[mr moose]

7 hours ago, yian88 said:

Not really, id take a Vega 64 over 1080ti anyday but its not AMD who has 300k vegas in unsold stock. 

You say that as if 1% unsold stock  is something major (AMD probably have that right now and they definitely have had that multiple times before).  This is just a slow news day article with a figure that caught the naive unaware.   

[Master Disaster]

28 minutes ago, mr moose said:

You say that as if 1% unsold stock  is something major (AMD probably have that right now and they definitely have had that multiple times before).  This is just a slow news day article with a figure that caught the naive unaware.   

Well for one thing you don't know it's 1%, it could be more or less than that but more importantly we don't know if any other partners are now returning unused GPUs to Nvidia too. It's pretty fair to assume most partners are in a similar situation.

 

Also this is returned stock, Nvidia sold it and it was sent back. There's a big difference between having stuff you haven't sold yet sat in a warehouse to having stuff you had sold, and therefore have likely replacement, returned back to you

[DildorTheDecent]

Nvidia overclocked the fab too hard.

 

Produced too many cards that they don't know what to do with.

 

First world problems.