AMD and NVIDIA expect GPU inventory to remain lean throughout Q1

Published: Jan 14th 2021, 08:33 GMT   Comments

Gamers to face challenging times with non-existent GPU stock

AMD and NVIDIA are expecting further delays in GPU shipments in the coming months, companies have confirmed over the past few days to the media outlets. 

Not only is the market is facing shortages in the substrate, components, and the GPUs themselves, but gamers also need to face price hikes on PC components in the United States due to increased tariffs, and across the world due to the rising popularity of GPU mining.

Jensen Huang holding GeForce RTX 3080, Source: NVIDIA

In an interview with Seeking Alpha, Colette Kress, EVP, and CFO of NVIDIA confirmed that demand has exceeded supply and that inventory is to remain lean through Q1. The company’s CFO was unable to clarify if that means an increased inventory in the second quarter:

This demand has remained stronger for longer. Okay? So, supply does remain tight at this time. We expect the overall channel inventories, meaning the inventories that are with our AIC partners as well as in our e-tail and retail channels will likely remain lean throughout Q1.

Our overall capacity has not been able to keep up with that overall strong demand that we have seen. We’ve seen in terms of constraints, constraints really from the overall global surge of compute and the overall capacity, capacity that may be necessary for assembly and test and/or sub trades as well. But again, we remain focused on this and working each day to improve our overall supply situation. […] Our channel inventory is being lean and likely remaining lean though. We’ll focus in terms of how to think about that supply for our revenue as we think on Q1.

— Colette Kress, EVP and CFO of NVIDIA at J.P. Morgan Tech/Auto Forum Conference, Seeking Alpha

Things aren’t looking any better at the headquarters of the Red Team. The company confirmed to The Verge that it will continue to manufacture Radeon RX 6000 reference design and keep selling them at MSRP through their own website. This sadly means that AMD will have no influence on increased pricing of their AIB cards which are available through retail channels:

On the plus side, AMD tells The Verge it expects to sell more of its own reference design RX 6800, 6800 XT and RX 6900 XT cards on its own website in the first quarter of 2021 at their sticker prices, which should mean $579, $649 and $999 instead of inflated ones. But AMD is only committing to make them available “to as many gamers as possible,” which may not reassure buyers who felt AMD had a paper launch to begin with.

— Sean Hollister, The Verge

Dr. Lisa Su holding Radeon RX 6800 XT, Source: AMD

AMD CEO Dr. Lisa Su recently sat down with select media for an interview. Interestingly, AMD requested that the media should not publish the full transcript from the interview, but AnandTech has found a way to publish the most interesting parts in a quote and explain.

AMD CEO confirmed that the company anticipated and prepared for the increased tariffs in the US. The company encourages its partners to sell as many cards directly to customers as possible, which sounds like a very blank statement. AMD Radeon RX 6000 graphics cards are non-existent on the market right, and both retailers, as well as AIBs themselves, are not interested in selling cards at MSRP. We have not seen increased supply on the Navi 2X cards since they were launched.

We knew about the expiration of some tariff policies, and in advance worked towards a more flexible supply chain as it relates to AMD. We are committed to keeping GPU pricing as close to our suggested retail pricing as much as possible, because it’s the only way to be fair to the users.

Normally when we have GPU launches, our own branded cards are available initially but then fade away for our partners to pick up. This time around we’re not phasing out our RX 6000 series, enabling us to sell direct to customers as low as possible. We’re encouraging partners to do the same. Not only tariffs, but the COVID environment has increased shipping and freight costs, which are hard to avoid. As we get into a more normal environment, this should improve. This also matters for our planned graphics updates through the first half of the year, as we have a lot of product coming to market.

— AMD CEO Dr. Lisa Su to AnandTech

At CES 2021, neither AMD nor NVIDIA have announced availability dates for new graphics cards. NVIDIA announced its GeForce RTX 3060 mid-range SKU is has yet to provide a launch date. The company expects the new SKU to launch by the end of February.

Meanwhile, AMD has surprised everyone by not announcing any graphics card at the event. It was previously reported through AIB channels that AMD has the intention to announce its Navi 22 graphics cards at CES 2021, namely Radeon RX 6700 series. Sadly this has not happened. The company has instead revealed multiple SKUs featuring dual-fan and single-fan cooling solutions as well as mobile SKUs that will be available in the first half of 2021.

Source: The Verge, Seeking Alpha, AnandTech via Notebookcheck

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