AMD admits undersupply to keep prices high

[BFG10K]

AMD admits to restraining chip supply to keep higher CPU and GPU prices

If you haven't noticed, the tech industry is suffering a significant contraction. Executives are panicking as they try to pinch pennies with layoffs and other measures to...

www.techspot.com

While not technically price fixing, it's still a collusion cartel operating at its finest. If you keep buying at these prices, none of your complaining is valid.

STOP BUYING GRAPHICS CARDS AT THESE PRICES!

That'll force them to drop pricing, or otherwise their consumer GPU division will fold.

 

[AtenRa]

Are there details of what AMD is undershipping and who they are undershippng to? Because my impression is that all these statements are referred to the CPU client side (where there has been low demand for Zen4) instead of the GPU side. There could be other reasons for the RX6800/6900 low supply (i.e. clearing inventory for making space for RX7000 series). Without these details I'd say it's difficult to make considerations about AMD's behaviour.

Well they said they under shipped for both CPU (Client segment) and Graphics segment. But GPU segment is very small compered to CPU .

 

[leoneazzurro]

Well they said they under shipped for both CPU (Client segment) and Graphics segment. But GPU segment is very small compered to CPU .

Yes but if we don't know what they undership, it is pointless. Also, as said, it seems that 6600/6700 class cards are in stock at around MRSP, while 6800/6900 class may be in the phase out stage.

 

[Timmah!]

Quoting the part that lead to clickbait:
"we were really trying to rebalance inventory, and I think we made progress exiting Q4. We're still expecting to ship below consumption in the first quarter and then sort of go from there. "

IMO, this is a nothing burger. Just sensible business trying to match supply to demand. When the channel is overstuffed, you back off on supply.

I think that comes down to what under-shipping literally means. Is it actually matching supply to demand? Or is it supplying less than demand is? If she says "we expecting to ship below consumption", it sounds to me like the latter.

 

[leoneazzurro]

If they are shipping under consumption when there is a large inventory in the channel they ARE matching supply and demand. If that's the case, if they match the consumption the inventory will stay large which only means higher costs for everyone in the supply chain.

 

[lobz]

the idea we are doing this to keep prices “elevated” isn’t accurate. Our client ASP was flat year over year

What a funny statement. Let's analyse it a bit. If ASP has been flat and they are undershipping, then obviously, it's to keep prices constant. Do they have to state it explicitly for it to be true? Nobody said it is to continuously increase prices, he did, and what does "elevated" prices mean. Very subjective, as my high can be your low. This is typical modern corporate speech, pretending to say one thing but really saying something else.

Tinfoil can burn too, don't get it too hot!

 

[Timmah!]

If they are shipping under consumption when there is a large inventory in the channel they ARE matching supply and demand. If that's the case, if they match the consumption the inventory will stay large which only means higher costs for everyone in the supply chain.

Thanks. Then i misunderstood it.

 

[leoneazzurro]

To be clear: it depends on how the undershipping is done (how big the undershipping is), if it will only reduce the inventory or lead to price increase. For having a price increase the actual inventory must be very low/depleted. This is why speaking about undershipping without proper context is mostly pointless.

 

[maddie]

Tinfoil can burn too, don't get it too hot!

Think this is my tinfoil? Nah, that's starting to show later this year. Buckle up.