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Nvidia Appears To Have A GPU Inventory Problem
- bhouston 8y agoWe are at the tail end of the 10-series GPU live cycle. Everyone is waiting for the 11-series release. Why would any one buy an overpriced card now that is sure to be made obsolete in just a few months time?
- romanovcode 8y ago1080TI is going to stay for years to come.
- bitL 8y agoRTX is going to obliterate it.
- phren0logy 8y agoWhat's RTX?
- bitL 8y agohttps://developer.nvidia.com/rtx https://developer.nvidia.com/rtx
- revanx_ 8y agoHah, that's what they said about maxwell architecture.
- bhouston 8y agoNot a chance. The next series will give at least a 30% margin over the 1080 Ti. Remember that there is a process shrink which is allowing an increase in 30% of CUDA cores and maybe faster MHz speeds. Some rumors which seem to be somewhat on point: https://www.extremetech.com/gaming/267982-nvidia-gtx-1180-specs-allegedly-leaked https://www.extremetech.com/gaming/267982-nvidia-gtx-1180-sp... The rumors those are NVIDIA is going to raise the price of its GPUs further though.
- IshKebab 8y agoSo bitcoin miners aren't the reason for the insane GPU prices then?
- wastedhours 8y agoThey were one of the reasons it began inflating, but as their interest cooled off, the prices didn't follow that back down. Nvidia's current model is probably based on that increased cost, so they've committed to a strategy that makes it hard to slip price reductions through channels (or are just unwilling to follow the market back down). Is it better for them to take back returned inventory, or cut their profit on the ones out there?
- paulie_a 8y agoNo. Gamers have always been willing to pay stupidly high prices for the latest and greatest hardware going back decades. Nvidia has just optimized the price point.
- Cthulhu_ 8y agoDon't know how much nvidia has to do with it, they're not the party making the final product. Which is weird btw, why are they deferring to other parties to build and sell the actual cards?
- s73v3r_ 8y agonVidia does build their own cards, as well. But yes, the graphics card market is predicated on AMD and nVidia creating the designs, and then other companies license and manufacture them. Some will also alter the designs a bit, like adding more memory, overclocking the cards, etc.
- onion2k 8y agoWhile GPUs are still used for some mining, a lot of miners have moved past them. Bitmain, the company that makes most ASIC mining chips, is valued at $12bn..
- 8y ago
- santialbo 8y agoLet's see if this translates into a price drop. I have been wanting to build a gaming pc but the prices for high end graphics cards are absurd.
- samueldavid 8y agoi have been waiting for a long time :(
- westpfelia 8y agoI dont think you will ever see the prices of unused cards drop that much in the future.
- mastax 8y agoPrices have been dropping ~$10/week, give it some time https://pcpartpicker.com/trends/price/video-card/ https://pcpartpicker.com/trends/price/video-card/
- IronBacon 8y agoI'm wondering if RAM prices have some influence in GPU card prices, DDR4 right now costs double than last year... ;__; GPUs don't use DDR4 tho.
- nightcracker 8y agoThat's not an inventory problem, it's a pricing problem.
- regularfry 8y ago"The constraint is the market."
- kernoble 8y agoI was thinking the same thing. It looks like sellers/board-makers were just charging what they thought they could get away with because the consumers weren't price sensitive, not because of a shortage. e.g. If you normally sell 100 Video Cards, at $500, but now you can sell 100 at $750 you'd be foolish not to increase the price and capture the margins that go along with it.
- Tenoke 8y agoSeriously? I find this hard to believe - prices of GPUs have been ridiculously high (much higher than at launch) for so long precisely because the supply was so short. Pretty much every supplier I've seen would either sell out any high-end Nvidia GPUs almost as soon as they got them or would ramp up the price more and more. This is either an incorrect rumour or some very weird shitty strategy by Nvidia that backfired hard (I lean towards the former). Even now OEMs should have very little problems selling cards at (above) MSRP so there must be something more going on.
- nolok 8y agoPrices went up because of mining, and now that the craze is over price stay up because companies want to pocket the extra money. It's as simple as that.
- jsiepkes 8y agoNVidia probably liked the high prices (because of miner demand), produced accordingly and kept the price stable. These high prices probably ensure a nice profit margin for a longer time then normal during this stage of the product's life cycle. However a side effect might be somewhat slower sales then they planned (for example because miners will buy anyway but gamers are waiting for the nextgen cards). That means they're left with a lot of stock, which sells, but not at their normal rate. NVidia normally has a very predictable product life cycle but I think they are now in something that is (to them) uncharted territory. This could lead to stuff like their accountants saying: "You've got an awful lot of stock which isn't selling as fast as you thought. We think that's a risk". Which might compel them to set money aside for stock risks.
- endorphone 8y agoThe majority of the price hike happened in the supply chain and didn't flow through to nvidia. The demand itself was a benefit, of course (simply selling more), but nvidia's source pricing didn't change. nvidia spoke out against mining because their concern was that gamers would move to the PS4 Pro, XboxX, etc, due to the shortage, which could hurt them in the long term.
- bitcraft 8y agoIn my local market, the slowing down of the crypto fad is showing. Used GTX 1080 GPUs are no longer hawked at $800 and there are various ASICS generally available. Even new retail cards are coming down in price, but are still way too high for technology that’s been available for a couple years now. Unfortunately, I believe that Nvidia is going to keep the prices high so that they can position the upcoming 11 series at the $700 mark just because they can.
- cptskippy 8y agoThe article states that oversupply is in low-end GPUs. Did Nvidia incorrectly assume there would be a demand for low-end GPUs somewhere? My understanding is that the demand for high-end GPUs was driven primarily by the shortage of middle-tier GPUs. High-end GPUs obviously are faster at mining but their cost and power consumption meant that they were lower profit and higher risk. Thus miners were buying up all of the middle-tier GPUs. Lower-end GPUs were largely overlooked due to RAM limitations the presented that limited their useful life as miners. The shortage of middle-tier GPUs meant that gamers could either go for higher or lower tier GPUs or just hold out. Thus high-end GPU prices rose as some people chose to upgrade. When crypto currency prices peaked last fall this created futher demand for the high-end GPUs limiting their supply and further driving up prices. Now that crypto currencies prices are falling and demand for GPUs has waned, the artificial demand for high-end GPUs has disappeared. But was there ever a demand for the low-end GPUs? If you absolutely needed a GPU sure, but the last 3 generations of GPUs have been all about 4k or VR gaming at 60+FPS. This isn't a market that low-end GPUs can satisfy. Most people looking to upgrade, want an upgrade. If you have a 3 year old middle-tier GPU it can hold it's own or beat most current low-end GPUs.
- tsenkov 8y agoDoesn't this only happen when huge preorder(s) get cancelled? Any big players in bitcoin mining bankrupted lately?
- jonplackett 8y agoAre they doing what de beers do with diamonds, hoarding them to create fake scarcity?
- ponzored 8y agoDiamonds are forever, but Nvidia GPUs are for 24 months.
- smcl 8y agoCuriously I have a feeling that diamond jewellery falls further when you just look at the short term. What I mean is that (according to a few things I've read, and neatly summarised at http://diamondssuck.com http://diamondssuck.com) immediately after purchase the resale value of your diamond ring hits the floor - whereas you can at least punt a GPU for a short while afterwards. This is mostly beside the point though - you're right that GPUs are effectively obsolete after a very short period and have very little value in the long term :)
- bitL 8y agoHmmm, if ASUS started selling 1080Ti for $500 instead of $1000, I am sure that would have resolved itself pretty quickly ;-)
- ksec 8y agoMay be there is a term for it, but it is a classic example how demand suddenly disappear when the price has dropped because everyone thinks / knew it is going to drop further. For Example, they know the 1080Ti were going for $400, but due to crypto it shoot up to $1000, now even at $500, they may as well wait a little more, and new graphics Turing or Ampere are coming soon anyway.
- bitL 8y agoSo the optimal strategy for NVidia is to shred those redundant silicon dies? At some point new Vega will put a pressure on them to release consumer Volta/Turing/Ampere/whatever-they-name-it and at $1000 there is not much hope for getting rid of Pascals via standard sales channels.
- jdietrich 8y ago>So the optimal strategy for NVidia is to shred those redundant silicon dies? Potentially, yes. Dumping their current inventory at the market-clearing price might badly affect demand for their next generation of products and damage their relationship with board partners. Lower GPU prices from Nvidia will barely trickle down to customers due to the rising cost of GDDR memory and the fixed cost of all other aspects of AIB manufacturing. Constraining supply to keep prices close to list might be frustrating for consumers, but it's probably in the long-term interests of Nvidia and their board partners, especially considering the weak competition from AMD.
- ksec 8y agoJust give it time for the market to digest it organically. It will be a slow process but it is the best then to shred it. Afterall Nvidia is in no hurry for new GPU introduction, as Vega doesn't seems to be competitive.
- bitL 8y ago[joke] Plot twist: A cousin of both Jensen Huang and Lisa Su was arrested in Taiwan for propelling price of BTC in the past year using bots running advanced Deep Learning. [/joke] [not joke] Jensen and Lisa are family. [/not joke]
- baldfat 8y agoI Am So Mad. I have had a new workstation purchase waiting for the cards to calm down and now I read this? We get no new technology and prices where a 1080ti equals the retail price of a Titan and now they have 300k to much inventory? NVIDIA needs to be greeted with a Linus salute again. They have been horrible for Linux and horrible on me having a new workstation at work.
- occams_chainsaw 8y agoCard prices have been back to normal for a while now
- deleted 8y ago[deleted]
- bhouston 8y agoNVIDIA 1060 6GB cards in Canada are still up more than 15% over their lows: https://ca.pcpartpicker.com/product/tJyxFT/evga-geforce-gtx-1060-6gb-sc-gaming-video-card-06g-p4-6163-kr?history_days=730 https://ca.pcpartpicker.com/product/tJyxFT/evga-geforce-gtx-... https://ca.pcpartpicker.com/product/Ft7CmG/zotac-geforce-gtx-1060-6gb-mini-video-card-zt-p10600a-10l?history_days=730 https://ca.pcpartpicker.com/product/Ft7CmG/zotac-geforce-gtx...
- dmm 8y agoThe GeForce 10 series is 2+ years old and are still selling around MSRP. Is that normal?
- overcast 8y agoFor top tier video cards? yes.
- letsgetphysITal 8y agoFor two year old top tier video cards which are only top-tier because the manufacturer is not releasing later models to try and get rid of the old stock? Probably not. (I have no evidence that they are not releasing newer cards just to continue to sell the older stock at MSRP).
- skate22 8y agoI bought a 1080 TI a while back for around $750. Bitcoin surged and the same card was $1300 for a few months. Now it's back to $750ish My FPS stayed pretty stable though
- fermienrico 8y agoWhat point are you trying to make?
- deleted 8y ago[deleted]
- qop 8y agoThat its really hard to work a hardware company when a digital hypecoins affect the value of your product. It's really not nvidia's fault. They're in a really difficult position here to try and absorb all this new business space without stretching too thin or using too much velocity. But in terms of processing graphics, the hardware is great. Using gpus for mining digital money hurts people using gpus for graphics, which was sorta the point in the first place. Maybe not now, but it used to be. I don't mean to make the argument that graphics are more important than digital money, but it's like the Bitcoin community has made zero effort to be introspective about the impact it has on people who just want to play games or whatever. Or even power usage in general. Bitcoin is such a weird phase of tech history in that its completely counterintuitive to altruism. I always imagine the Internet wanting to try and always move towards a better, more utilitarian future and benefit the users in a collective sense, but Bitcoin doesn't seem to be about that anymore. Not parent commenter, just my two cents.
- raverbashing 8y agoGood, now I can have a cluster of GPUs to use Deep Learning to predict cryptocoin prices.
- davidhyde 8y agoThe author is shorting Nvidia stock (as he / she discloses at the end of the article). So, while this article attempts to be objective, I just don't believe it can be.
- chadmeister 8y agoYeah, this disclosure should really be at the top of the article. Until AMD puts out a new graphics card NVIDIA is still going to sell at monopoly prices. Prices have barely begun to approach msrp and that's 2 years after initial release of this series of cards. NVIDIA could just as easily delay release of their next gen cards until this inventory clears or AMD forces them to make a move. I wouldn't be too worried about their balance sheet right now.
- feefie 8y agoAgreed. The author's bias makes this unethical, in my opinion. I wish HN didn't promote posts like this.
- cookingrobot 8y agoThere’s a point of view that short selling is important & ethical because it creates an incentive to find problems with companies and expose them. Hopefully they’re honest when they do it, but that applies to people pumping a stock too.
- batbomb 8y agoIf that's how you feel, then you need to block about half of everything on Seeking Alpha
- joejerryronnie 8y agoMost of what I see on Seeking Alpha is people cherry picking charts and statistics to support a pre-existing hypothesis. Many times authors continually double down on clearly wrong opinions and just say "oh well, the market is crazy".
- 8y ago
- ilitirit 8y agoI wonder if this has anything to do with ETH not being able to be mined on 3GB cards any more. I may be mistaken, but I recall several months back people with 3GB 1060s no longer being able to mine ETH because of the size of the DAG. https://webcache.googleusercontent.com/search?q=cache:C6d8VKMhAuEJ:https://investoon.com/tools/dag_size+&cd=3&hl=en&ct=clnk&gl=za&client=firefox-b https://webcache.googleusercontent.com/search?q=cache:C6d8VK...
- LinAGKar 8y agoMeanwhile, I'm still waiting for a graphics card I ordered two and a half months ago.
- _Codemonkeyism 8y ago1080 TI Asus still >900 EUR Amazon DE.
- cptskippy 8y ago> The report also cites Nvidia aggressively buying GDDR5 as evidence that they now have an excess stock of lower-end GPUs that need to be made into boards as well as other insiders/sources citing an inventory buildup. Weren't lower end Nvidia GPUs not suitable for use in Mining? Perhaps Nvidia assumed people who typically buy a new GPU annually would just pickup a low end unit instead of waiting so they over produced?
- peatmoss 8y agoI recently upgraded to a 1060 6GB card (at inflated prices, because it didn’t look like there’d ever be a break in the storm). I got to thinking, I doubt I’ll ever feel much need to upgrade the screen I game on from 1080p to 4k, mostly because I sit across the room and my eyes naturally antialias things at distance... Given that combination of factors, I have to wonder what it’ll take to make me want to upgrade from my modest 1060. I can’t imagine what sort of incremental improvement video hacks will make this card too slow at 1080p. I have to wonder if 4k gaming and VR are the stopgaps that’ll keep some demand for improved gaming performance until some paradigm shift happens, such as the mainstreaming of realtime raytracing. It’s crazy to think that since my first Voodoo video card until now, it’s just been a steady evolution and layering of graphical hacks. We’ve known since before then that eventually raytracing would be an optimal case. I wonder how far away from a total revamping of 3D graphics we are... two generations of GPUs? Three?
- bitL 8y agoRaytracing is faking it as well, but the illusion is a bit better ;-)
- peatmoss 8y agoI suppose if the universe is in fact a hologram as some scientists have hypothesized, and we’re just living in a 3d projection then we could say reality is faking it :-) But the current gen video hacks and future raytracing are pretty hard to compare. Raytracing can be an accurate simulation of the physics properties of light. I suppose the biggest caveat is whether you’re doing forward or backward raytracing. Backward raytracing simulates only the photons relevant to the observer. Forward raytracing simulates photons from various light sources, a small fraction of which are observed by the camera. Both are still based on the physical path of virtual photons, which as far as models go, is a pretty solid illusion!
- dgacmu 8y agoWe still fake the surface properties. Skin, for example, involves a lot of subsurface scattering, and we're very far from that. So texture maps it will be for a long time.
- sandworm101 8y agoWhat is Nvidia's strategy for "streaming" games, games that execute on a cloud server and streaming to thin-client machines? I assume such a future would see the gamer market for cards disappear. Take that future, add the possible future collapse of crypto currencies, and I see a significant existential risk for anyone whose business relies on GPU sales. Not a 100% future, not ever 25%, but something to think about.
- xemdetia 8y agoI don't think there is any majority thinking that streaming games is a thing now that VR's around. Game streaming was struggling against the speed of light to get a modest/responsive game experience. Even then on the low end there's plenty of games that'll work on intel embedded just fine so it just becomes a who does it actually serve kind of question to me.
- ChicagoDave 8y agoRecently tried to purchase a batch of P102-100's for mining and hit a dead end, so I'm pretty sure this article is BS.
- dogma1138 8y ago300,000 GPU dies is maybe 30M worth of inventory to NVIDIA especially considering that if these were "mining" cards those were likely GP104 or even 106's which are worth less than $100 per die. NVIDIA made a $3.2bln in revenue in the last quarter with gaming accounting for more than half of that so do the math just how many GPUs they actually sell. Short sellers are becoming really desperate.