Question Zen2 CPU prices Increasing; Not a good sign for Zen3?

[VirtualLarry]

Before Zen+ came out, we had good discounts on Zen CPUs. Likewise on Zen+ CPUs when Zen2 was coming out.

Zen3 is supposed to come out before the end of the year, and:
1) we have no leaks, and
2) Zen2 CPU prices (3600) have risen from $154.99 to MSRP ($199.99) in a matter of weeks.

What this tells me, is that Zen3 sucks, and that retails know it.

Edit: Let me explain. If Zen3 were better than sliced bread, then Zen2 would be (relatively) unsellable, at least at the same price-points, and thus, Zen2 CPUs should be discounted commensurate with the disadvantage relative to zen3 CPUs, before release, to clear stock.

The fact that Zen3 is getting ever-closer to release, and Zen2 prices are going UP, points me to a VERY disasppointing Zen3 release.

 

[Gideon]

Yes and how can AMD possibly gain market share?Think about it.
AMD has to make more money to make more product to make even more money,wash, rinse, repeat.
If they can't increase their net income they can't increase their market share.

Seriously?

1. To compete you need to increase R&D not net-income. They've certainly done the former, going from $264M in Q4 2016 to $460M in Q2 2020 and "the best is yet to come". They've doubled their R&D spending since Zen's release:




2. They had massive debt to pay off not to mention a stupid wafer agreement with Global Foundries. Both of which have essentially been taken care of.

In a year AMD paid off $1B of debt while simultaneously adding $500M to the bank (and increasing R&D costs slightly):



https://ycharts.com/companies/AMD/r_and_d_expense
Now that their cache reserves largely overshadow their debt they will surely increase R&D spending even more

 

[TheELF]

Seriously?

1. To compete you need to increase R&D not net-income. They've certainly done the former, going from $264M in Q4 2016 to $460M in Q2 2020 and "the best is yet to come". They've doubled their R&D spending since Zen's release:

View attachment 29846

If you want to know what happens to companies that have to spend more and more on R&D without making more and more money from it then just look at what happened to all the CPU makers in the 90ties.
It's a good thing that they do spend money on R&D but at some time they have to make some money from it, we are in the third year of zen with the forth version of it coming out real soon and AMD is still not reaping any rewards.

2. They had massive debt to pay off not to mention a stupid wafer agreement with Global Foundries. Both of which have essentially been taken care of.

In a year AMD paid off $1B of debt while simultaneously adding $500M to the bank (and increasing R&D costs slightly):

Which year was that?The last time they had 1.4bil debt was in 2016 and they still have 0.5 bil today.
If you look at quarterly debt you can see that they save all of their net income for 3 or 4 months and then pay that amount of debt off.
Which is the smart thing for them to do, being debt-free is certainly the best way to get a good loan.

 

[Hitman928]

If you want to know what happens to companies that have to spend more and more on R&D without making more and more money from it then just look at what happened to all the CPU makers in the 90ties.
It's a good thing that they do spend money on R&D but at some time they have to make some money from it, we are in the third year of zen with the forth version of it coming out real soon and AMD is still not reaping any rewards.

AMD is reaping rewards, the problem is they were on the verge of going out of business when Zen1 dropped. They were (in context of their market) a barebones operation with a ton of debt. They essentially had dug a very deep hole starting with Bulldozer and it has taken them a few years to dig themselves out of that hole with Zen and it's iterations. They've pretty much are back at level ground now so over the next few quarters and years, you should start to see AMD actually turning more significant profits while continuing to capture more market share though their growth will be capped by fab capacity but they are working with TSMC to alleviate this as much as possible also.

 

[chrisjames61]

They don't have to pay that debt immediately, so they have more than enough so long as they keep generating oodles of cash each year that they're mostly using for stock buybacks. They will likely have to trim those buybacks if AMD starts taking a bigger share of the x86 profit pie.

Stock buybacks should be illegal like they were in the past. It is nothing but legal stock manipulation.

 

[Doug S]

Stock buybacks should be illegal like they were in the past. It is nothing but legal stock manipulation.

Why? It isn't manipulating stock they are just taking some shares off the market - it is the exact opposite process of issuing new shares. You think that should be illegal too?

 

[chrisjames61]

Why? It isn't manipulating stock they are just taking some shares off the market - it is the exact opposite process of issuing new shares. You think that should be illegal too?

Maybe you should read up on stock buybacks and why they were illegal till 1982.

 

[A///]

Intel's a good example of spending outrageous sums in R&D or in their case, buying companies and integrating their product into theirs and calling it theirs. AMD spent something like $7B in the last 3 years excluding 2020 and is poking Intel in multiple directions and biting off marketshare. Sure. Intel made $21B in the last 12 months. Good for them. How long can they continue that? They can't execute on client or datacenter. Their 2.5 Gb ethernet sucks and has gone through multiple revisions. This is what happens when you have bean counters running a company. Huge, short term profits. Deteriorating products. Alderlake is a cry for help. I keep telling myself it'll be a gem, but even I know I'm lying to myself and I'm a huge Intel fan. There's a 20+ year gap where I haven't used an AMD product outside of a video card or two.

I think some people have a warped concept of how quickly datacenter hardware turnover is. If there were nothing to worry about, Intel wouldn't be advertising AMD's products in every damn presentation they do. I suppose AMD, NVidia and I guess Apple are doing poorly if you live in some fantasy land like Wheat Ken. Intel's best decision was hiring Keller, and no one has a clue whether he accomplished anything with Intel's archaic behavior towards outsiders. But they did hire just about every clown in the media and those let go at AMD for their marketing department.

If Intel mindshare was as strong as the company claims, they didn't need to keep increasing cores gen after gen to compete with AMD, and they wouldn't be looking into HGC to get 16 non-traditional cores, mixing future and past core architecture, and then rely on Windows and Linux to decide how to utilize the cores correctly. And now you have NVidia fans who aren't brand drones like myself recoiling from the mess that Ampere looks to be.

 

[rbk123]

I think some people have a warped concept of how quickly datacenter hardware turnover is.

This is the big point. As well as Intel's partnering with various PC builders. Both of those don't change quickly or easily, especially when you "sell at the top". It's not like consumer behavior which can change far faster.
Intel doesn't have to be the best to maintain the datacenter income, they just have to be close enough that corporations won't switch. Their margins may go down as companies try to leverage the AMD pricing to them, though.
Intel isn't going south anytime as fast as those around here seem to think. Although it's not as rosy as the Elf wants to believe, but it's not as dire either. They're just weathering things now until they get back on top performance-wise. The longer that takes the further south they go, but it's not going to be edge-of-cliff like.

What I want to know is how does someone like the Elf come to worship a company who does nothing but try and force him and everyone else to gouge and pay more than warranted? He and Zucker and their clan have some serious Stockholm syndrome.

 

[Kenmitch]

This is the big point. As well as Intel's partnering with various PC builders. Both of those don't change quickly or easily, especially when you "sell at the top". It's not like consumer behavior which can change far faster.
Intel doesn't have to be the best to maintain the datacenter income, they just have to be close enough that corporations won't switch. Their margins may go down as companies try to leverage the AMD pricing to them, though.
Intel isn't going south anytime as fast as those around here seem to think. Although it's not as rosy as the Elf wants to believe, but it's not as dire either. They're just weathering things now until they get back on top performance-wise. The longer that takes the further south they go, but it's not going to be edge-of-cliff like.

What I want to know is how does someone like the Elf come to worship a company who does nothing but try and force him and everyone else to gouge and pay more than warranted? He and Zucker and their clan have some serious Stockholm syndrome.

Some people don't understand that AMD's Zen products are double edged swords in the end. Being forced to offer more silicon for less on Intel's side or buying AMD's products decreases Intel's profits either way. I'd imagine AMD can hang way longer playing this game then Intel. What the future holds is a big unknown.

PS....You know you've summoned those demons!

 

[A///]

Oh, AMD will get substantially more expensive over time. If Intel continues to fail in execution, don't be surprised if AMD increases prices by 1.3-1.75 or even 2x what they are now. If AMD can continue executing like clock work and improving, they can command the higher price. Intel is in this weird loop where they are a premium brand still, but advertise themselves as the budget option compared to AMD in that infamous head 2 head "ad" from a while back.

No offense to Intel, but their rebranding effort reminds me of Room Essentials and Mainstay house brands from Target and Walmart having a child.

 

[moinmoin]

They're just weathering things now until they get back on top performance-wise. The longer that takes the further south they go, but it's not going to be edge-of-cliff like.

Intel is technically weathering things for 5 years already now. The stocks implosion after the admission that 7nm is further delayed is the first time in all these years that even the stock market is beginning to recognize that Intel is lagging behind and a sign of things to come. Intel will never have to jump some kind of cliff, but its current modus operandi will let it fall behind further and further.

 

[rbk123]

Intel is technically weathering things for 5 years already now. The stocks implosion after the admission that 7nm is further delayed is the first time in all these years that even the stock market is beginning to recognize that Intel is lagging behind and a sign of things to come. Intel will never have to jump some kind of cliff, but its current modus operandi will let it fall behind further and further.

Agree. Just that 3+ of those last 5 years they've gone south, there was just no real alternative out there for companies/partners to switch to.

 

[moinmoin]

Agree. Just that 3+ of those last 5 years they've gone south, there was just no real alternative out there for companies/partners to switch to.

Too bad for Intel really. If they had any internal working quality control they could have used those 3 years to work on getting back to the previous execution while publicly pretending everything's fine. By all accounts they only did the latter. Now they do face competition, and going by the Tiger Lake presentation they appear completely unprepared for it.

 

[rbk123]

and going by the Tiger Lake presentation they appear completely unprepared for it.

And it couldn't happen to a nicer company...

 

[Kenmitch]

And it couldn't happen to a nicer company...

Soon it'll be Intel who instead of Intel inside /s

 

[A///]

Too bad for Intel really. If they had any internal working quality control they could have used those 3 years to work on getting back to the previous execution while publicly pretending everything's fine. By all accounts they only did the latter. Now they do face competition, and going by the Tiger Lake presentation they appear completely unprepared for it.

What makes you think they'll execute on time per their last quarterly? Anyone who placed faith in Bob Swan's word diarrhea then is kidding themselves.

 

[Zucker2k]

Some people don't understand that AMD's Zen products are double edged swords in the end. Being forced to offer more silicon for less on Intel's side or buying AMD's products decreases Intel's profits either way. I'd imagine AMD can hang way longer playing this game then Intel. What the future holds is a big unknown.

PS....You know you've summoned those demons!

So, on the one hand Intel is gouging, while on the other, they're bleeding profit so much they can't sustain it indefinitely. Never mind your confusion, I just want to know where AMD gets their free silicon supply from.

And I'm disappointed you'd stoop so low as to call other members here "demons" because they have a different view than yours. Maybe you and @rbk123 need to get down from your imaginary high horses and smell the ashes: the market is always right.

He and Zucker and their clan have some serious Stockholm syndrome.

You place too much value on your words for someone who lacks basic understanding of how the market works. Slink back into the hole you just crawled out of, please.

 

[Massive79]

Aside of technical spec of upcoming Zen3, I think price hike of Zen2 processor is not directly related to it, it simply because higher demand on Zen2 since price performance ratio is rated better than Intel lineup.
In other side of the world, price performance is being most significant reason to upgrade a CPU.

I see CPU race between Intel and AMD will be interesting in the near future.

I rate that AMD won today race for its performance and scalability of their CPU line, and Intel is a little left behind due to no significant upgrade on their 10th gen lineup and they still using 14nm.

But I see in the future that AMD having difficulty to increase their speed gain in their line up, that is why they focusing on core and thread count. I think their strategy in short to mid term will be upgrading feature and interconnecting on AMD system to maximize performance instead of focusing on speed increase.

Meanwhile, Intel already be able to reach 5Ghz on their line up, while still using 14nm, and I also think Intel have saturated on 5Ghz limit on their current platform. But, if they want to move to overtake AMD it a simple task for them, just move to smaller die for efficiency and added some feature that no AMD CPU can do as they still have wide support from software vendor currently. But that would cost them some resources which might lowering down their yield, which I assumed is a choice they wont take.

 

[rbk123]

You place too much value on your words for someone who lacks basic understanding of how the market works. Slink back into the hole you just crawled out of, please.

 

[cortexa99]

emmm I think we have been out of topic. Just calm down and see, in my country Cometlake price especially Non-k SKUs are going down quite a bit, while Zen series(1,+,2) price maintain same level but low-end SKUs like 200ge seems up a little bit, and 3000g is out of stock and hard to buy one......

I think current situation is hard to tell 'Zen price up is not a good sign', at least from what I knew from some leaker from other forum in my country, Zen3 performance is good, although it still hard to reach 5Ghz all core(from what I comprehend from their statement its OC pretty much like Zen2XT).

Since we already knew Zen3 release in October(likely not a paper launch), just wait & see, whether 'Zen price up is not a good sign for Zen3', or not. XD

 

[Zucker2k]

 

[dnavas]

AMD refused to artificially segment the market and focused on winning the technology war. For awhile that was good for value seekers. But the bean counters will have their day eventually. If Zen3 is really the war winner, I would expect higher prices. I won't be happy about that, but I'm not going to live in denial about it either. I suppose the best I can hope for is to see TR prices fall for previous generations, but even there, I'm not holding out a lot of hope.

 

[x_marX]

So, today, there were some decent price cuts for AMD processors here but MSI Tomahawk B550 & x570 prices went up.

But yeah, Intel 9th gen stuff is really cheap now. 9700F ==10600 & 9700kf==10600K. Also, the Avenger versions of Intel 10th gen are getting more affordable too.