5 ms·

If they actually paid in advance for the whole production run for those months how is that any different compared to the product being released but shelves bein

If they actually paid in advance for the whole production run for those months how is that any different compared to the product being released but shelves being empty?

Eldt 3y ago
Why are they buying before release? And why can't pther consumers do that?
- dathinab 3y ago
  Because they product product of which that CPU is a fundamental part of the supply chain. So they have at least initial contract for supply before they even start designing this (mostly work station) products (which often involve e.g. custom motherboards). I.e. not only are they buying before release, they _need_ supply guarantees long long before release. The customer can't do that for multiple reasons. - They haven't signed a NDA contract nor are they in direct contact with first party sells personal so when it's time to early order they don't even know it exist. - They buy in quantities of 1,2 maybe 10 instead of multiples of thousands (initial charge) with follow up guarantees. E.g. if you look at server CPUs you will see 1kU prices, because this CPUs are sold only (by AMD or Intel directly) in multiples of 1000 units. If you (or lets say a PC retailer) do buy multiple thousand thread ripper CPUs at once and are willing to enter a contract for this sells long before they are sold (which likely involves an initial % of the price as down payment) you probably could get them early one. Through you would still be competing with DELL and similar for limited supply so you might still have a hard time to get the very first charge. And you also might have some problem getting compatible motherboards as many ORMs produce their own.
perihelions 3y ago
Well, sure. The difference is in intent. It's something where I would want court-appointed lawyers reviewing these company's internal communications, and taking depositions, to figure out. "Oops we sold out" is one thing. "Oops; we conspired with other companies to limit supply and to form a cartel" is entirely another. The industry's been caught doing the latter too often, and governments' oversight is IMO too slow, too weak, and lacking meaningful deterrent power. I think they need to be much more aggressive. This stuff victimizes consumers.
- dathinab 3y ago
  intent exactly and as far as I can tell it's quite unlikely that there is bad intent involved as far as I understand DIY sells of Threadriper solely exist for PR, mind share reasons a bit of edge case handling and maybe some book keeping trick to even out certain marked OEM demand fluctuations. but I don't think they make relevant amounts of profit with DIY sells I mean think about it most (by far) end users of Threadrippers are companies needing it for work stations. Most larger companies only buy from OEMs like DELL for various reasons like warranty handling, uniform platforms, certain "enterprise" BIOS features etc. Even for small companies the DIY part is often an issue, they might not have IT experts and even if this system goes e.g. to a software developer they might not be willing to hardware maintain their PC (and take responsibility for it). This leafs a relative small number of private enthusiasts and small companies, to small to really be profitable. Add to that that the demand of DIY is less predictable then that of OEMs, and production capacities for CPUs tend to be limited and even if less so currently tend to still often doesn't allow fast dynamic changes of the amount. Idk. but if I would be AMD I think I would pin down my big customers on contracts with a more fixed demand (both fixed initially and fixed+%variety follow up) and then plan CPU production of that (with maxed out variety) and if there are any spare factory resources I would use them for either server CPUs or desktop CPUs whatever currently sells hotter. Then if the OMS don't max out their variety I would stock the remainder and once enough stock accumulated pass it the the consumer facing department to sell as DIY parts.

If they actually paid in advance for the whole production run for those months how is that any different compared to the product being released but shelves being empty?

Eldt 3y ago

Why are they buying before release? And why can't pther consumers do that?

dathinab 3y ago
Because they product product of which that CPU is a fundamental part of the supply chain. So they have at least initial contract for supply before they even start designing this (mostly work station) products (which often involve e.g. custom motherboards). I.e. not only are they buying before release, they _need_ supply guarantees long long before release. The customer can't do that for multiple reasons. - They haven't signed a NDA contract nor are they in direct contact with first party sells personal so when it's time to early order they don't even know it exist. - They buy in quantities of 1,2 maybe 10 instead of multiples of thousands (initial charge) with follow up guarantees. E.g. if you look at server CPUs you will see 1kU prices, because this CPUs are sold only (by AMD or Intel directly) in multiples of 1000 units. If you (or lets say a PC retailer) do buy multiple thousand thread ripper CPUs at once and are willing to enter a contract for this sells long before they are sold (which likely involves an initial % of the price as down payment) you probably could get them early one. Through you would still be competing with DELL and similar for limited supply so you might still have a hard time to get the very first charge. And you also might have some problem getting compatible motherboards as many ORMs produce their own.

perihelions 3y ago

Well, sure. The difference is in intent. It's something where I would want court-appointed lawyers reviewing these company's internal communications, and taking depositions, to figure out. "Oops we sold out" is one thing. "Oops; we conspired with other companies to limit supply and to form a cartel" is entirely another. The industry's been caught doing the latter too often, and governments' oversight is IMO too slow, too weak, and lacking meaningful deterrent power. I think they need to be much more aggressive. This stuff victimizes consumers.

dathinab 3y ago
intent exactly and as far as I can tell it's quite unlikely that there is bad intent involved as far as I understand DIY sells of Threadriper solely exist for PR, mind share reasons a bit of edge case handling and maybe some book keeping trick to even out certain marked OEM demand fluctuations. but I don't think they make relevant amounts of profit with DIY sells I mean think about it most (by far) end users of Threadrippers are companies needing it for work stations. Most larger companies only buy from OEMs like DELL for various reasons like warranty handling, uniform platforms, certain "enterprise" BIOS features etc. Even for small companies the DIY part is often an issue, they might not have IT experts and even if this system goes e.g. to a software developer they might not be willing to hardware maintain their PC (and take responsibility for it). This leafs a relative small number of private enthusiasts and small companies, to small to really be profitable. Add to that that the demand of DIY is less predictable then that of OEMs, and production capacities for CPUs tend to be limited and even if less so currently tend to still often doesn't allow fast dynamic changes of the amount. Idk. but if I would be AMD I think I would pin down my big customers on contracts with a more fixed demand (both fixed initially and fixed+%variety follow up) and then plan CPU production of that (with maxed out variety) and if there are any spare factory resources I would use them for either server CPUs or desktop CPUs whatever currently sells hotter. Then if the OMS don't max out their variety I would stock the remainder and once enough stock accumulated pass it the the consumer facing department to sell as DIY parts.