Nvidia miscalculations may have led to excess GPU inventory

[Shawn Knight]

Rumor mill: Nvidia CEO Jensen Huang at Computex 2018 earlier this month revealed that new GeForce GPUs won’t be launching anytime soon. Now, we may have a bit more insight into why that is. A recent report claims Nvidia overestimated recent demand for its current GPUs, generating excess inventory.

Nvidia may have underestimated the impact of rapidly declining demand from cryptocurrency miners and from the gaming community according to a report from Seeking Alpha (citing SemiAccurate, pay wall). The result? A lot of excess inventory.

The report also mentions a “top three” Taiwan OEM that returned 300,000 GPUs to Nvidia and Nvidia “aggressively” buying GDDR5, suggesting it has an excess stock of lower-end GPUs that need to be made into boards. Other insiders / industry sources also reportedly mentioned a build-up of inventory.

According to Seeking Alpha, Nvidia really has no choice but to wait it out and sell through the excess inventory “if they want to avoid expensive price protection payouts.”

Nvidia last month said that in the first quarter, it generated $289 million in revenue due to sales of its GPUs for the purpose of mining cryptocurrencies. It was good news for investors but not for gamers as miners bought up a lot of their cards which in turn, drove prices up for the collective gaming community.

Nvidia said it expected sales to cryptocurrency miners to drop by about two-thirds in Q2.

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https://www.techspot.com/news/75196-nvidia-miscalculations-may-have-led-excess-gpu-inventory.html

 

[davislane1]

And that, ladies and gentlemen, is why you don't ramp up production every time people complain about miners.

 

[JedixJarf]

They aren't releasing a new top end card because they don't need to, there is nothing that can come close to the 1080 Ti unfortunately, why release a flagship killer when there is no competition? It's been this way for ages.

 

[Vulcanproject]

Another thing to blame on miners. Ok so it's Nvidia's fault for not seeing the drop off in market demands but it sounds like nobody is getting next gen cards til Nvidia have shifted what they have now. That is going to take months. Probably won't see new parts til Christmas at this rate.

 

[davislane1]

They aren't releasing a new top end card because they don't need to, there is nothing that can come close to the 1080 Ti unfortunately, why release a flagship killer when there is no competition? It's been this way for ages.

This, plus the fact that half the 10xx series cards are still OP for a lot of the market. If Nvidia is smart, they won't do another major release until they have a true 4K card (4k/60FPS/ultra). Until that happens, any significant upgrade to their product lineup would be paper gains.

If they were really smart they would launch the new line of cards with a new brand of SLI based off of NVlink, eliminating software dependencies.

 

[psycros]

And that, ladies and gentlemen, is why you don't ramp up production every time people complain about miners.

Right, because what you want to do is let your competition get all the business. /smh

 

[davislane1]

Right, because what you want to do is let your competition get all the business. /smh

With what cards? The Vega chips no one could get their hands on?

My comment was alluding to all the gamers who were crying about Nvidia not investing in new manufacturing capacity to overcome mining-driven shortages. A clearly shortsighted move that would have been a complete blunder, given the predictable crypto bust and subsequent GPU demand correction.

 

[Potato Judge]

I guess I don't have to feel jealous of people getting shiny new cards a bit longer.

 

[Cycloid Torus]

I guess I don't have to feel jealous of people getting shiny new cards a bit longer.

Watch for sales.

 

[ThanosPAS]

And that, ladies and gentlemen, is why you don't ramp up production every time people complain about miners.

Do you seriously believe that complaining has much (if any) to do with production and sales dynamics? They misacalculated demand when they saw it coming. It was just them GREEDLY trying to make more money. People were mere bystanders. That is all that is to it.

 

[fadingfool]

C'mon nVidia sell some 1080Ti's at rock bottom prices - I want to go SLI

 

[seefizzle]

After waiting 6 months to buy a 1080ti to put together a VR rig, I don't feel sorry for Nvidea.

 

[Ean Mogg]

They hiked the price from the last series of cards to the 10 series so what do they expect no one who plays games can afford them only miners can and they went with them not the gamers who basically can't afford the very high prices of non titan cards nowadays ... Drop the prices Nvidia its the only way you can move on otherwise the new cards will be out of date and Amd will have six months on you ....shame really

 

[Shknawe]

They aren't releasing a new top end card because they don't need to, there is nothing that can come close to the 1080 Ti unfortunately, why release a flagship killer when there is no competition? It's been this way for ages.

Well you put out a new Gpu because no one is buying their current Gpu while waiting for the new one. Nvidia just had to take back a shipment of 300 Thousand Gpu's. So if they want to keep their current customers they should, and will, release the Kraken.

 

[Shknawe]

And that, ladies and gentlemen, is why you don't ramp up production every time people complain about miners.

Do you seriously believe that complaining has much (if any) to do with production and sales dynamics? They misacalculated demand when they saw it coming. It was just them GREEDLY trying to make more money. People were mere bystanders. That is all that is to it.

I always get a kick out of the aurgument that a company is greedy for trying to make money on their product. I guess there should be a feel good price so everyone loves them. Shareholders be damned.

 

[Azshadi]

Ermmm.... there was never a GPU shortage at the lower points, these 300k chips are all low tier that went to the OEM's not the AIB's, this has nothing to do with mining, the chips could 80% be used for laptop parts, the article does not say otherwise. Anywho while the math was a bit off this won't hurt them in the long run.

 

[Capaill]

So I guess that means the GPU technology will stagnate for the foreseeable future unless AMD can get some next gen boards out. If that happened, Nvidia would be forced to compete by dropping prices on their excess stock or face a massive loss. But without any new boards from AMD, then Nvidia can just continue to sell their existing boards at full price (or higher).

 

[Azshadi]

So I guess that means the GPU technology will stagnate for the foreseeable future unless AMD can get some next gen boards out. If that happened, Nvidia would be forced to compete by dropping prices on their excess stock or face a massive loss. But without any new boards from AMD, then Nvidia can just continue to sell their existing boards at full price (or higher).

Nah, I wouldn't worry about that, the number of chips is low enough, they'll clear the remainder of the stocks in no time and if time is short they will drop the prices, at this point the only thing that I think nVidia is concerned about is to either wait for 7nm or not.

 

[dkryder]

Well, I guess the fact that nvidia now has a large inventory of GPUs has not motivated them to start giving OEMs some discount which would allow them to produce lower cost boards. I do not see any significant price reductions. the crypto market miners will start the buying again once the securities market starts a correction and that money flows into crypto supposedly later this year so it would be nice for these clowns to offer their traditional gamers market a brief period of reward for the support gamers have given them since the beginning.

 

[ForgottenLegion]

C'mon nVidia sell some 1080Ti's at rock bottom prices - I want to go SLI

Why?
SLI is dying. For whatever reason nVidia is making sure of it rather than providing an incentive to double down on their GPU's.

 

[sac39507]

The laws of supply and demand should make prices drop. Stupid laws are not working.

 

[BadThad]

If they were smart they'd produce a mining board with no connectors and enhanced cooling. They could use those 300k chips and put 4 on a board to make a mining board.

Ditto with AMD, make a 100% mining board so us gamers don't have to suffer through this ever again!

 

[koblongata]

1/3 the of the current pricing will save PC gaming and giving it a boost and regaining its dominance for another 3 years, yay,.

 

[Boilerhog146]

If they were smart they'd produce a mining board with no connectors and enhanced cooling. They could use those 300k chips and put 4 on a board to make a mining board.

Ditto with AMD, make a 100% mining board so us gamers don't have to suffer through this ever again!

they already did that .both AMD and Nvidia versions .with no connectors,but my guess they were priced as a GPU with connectors.so who would buy them. they have no resale value.

 

[UncleSharkey]

I am listening........and I still don't hear GPU prices dropping.

SMH