AMD deliberately does not meet the demand for its CPUs and GPUs, slowing down production and shipment of products in order to keep high "covid" prices, said AMD CEO Lisa Su at the company's reporting conference.
Thus AMD officially confirmed the policy of scarcity and price retention for super profits, this information is not a leak, insider or rumor started by technobloggers.
For the last two quarters we have been under-supplying retail products. We under-delivered in the third quarter, we under-delivered in the fourth quarter, and we plan to limit, but not to that extent, product shipments in the first quarter of 2023.
- AMD CEO Lisa Suh.
AMD's video card and processor sales fell 51% year-over-year in 2022, but the company reported modest revenue growth. They were able to achieve this by keeping overpriced goods, which set in during the chip shortage and logistics crisis in 2020 and early 2021.
At the same time, AMD and Nvidia sought to ramp up production and shipment of their products as much as possible while the market remained tight. However, after the fall of cryptocurrencies and Ethereum's transition to a new protocol, GPU mining effectively died, which instantly overturned the market. The growing global recession and high appetite of the companies themselves killed the demand.
AMD and Nvidia are publicly traded companies. At least by the chart of AMD securities price you can see that for someone the covids, lockdowns and chaos in logistics was a disaster, and for someone it was a great time to make money.
AMD securities peaked at $161 as of Nov. 29, 2021, versus $45 as of Dec. 30, 2019. At the same time, AMD was reporting huge earnings and super profits, which couldn't have been happier for the company's shareholders and dividend holders. Since passing its peak, the company's securities have steadily fallen and now stand at $75, which is still nearly double its pre-dividend level. A return to normal operations, pricing and shipments would likely collapse AMD's value on the stock exchange, which would negatively impact the business.
The only way to keep from a vertical plunge downward is to keep speculative pricing, as Lisa Su stated during her report. At the same time the reasons for the reduction of demand for AMD and Nvidia products are precisely overpriced and gamers' lack of money, whose wallets are depleted not only by the recession, but also by cannibalistic pricing policies of the companies themselves in times of covid restrictions. While gamers - the main audience of these companies in the consumer segment - practically begged to ship them enough gas pedals, AMD and Nvidia were selling their chips to miners almost from the conveyor belt. Now, when GPU mining has collapsed, AMD hopes that their position will be saved by the very gamers, from whom they have already been pulling three or four prices for the past years.
There are also many questions about the novelties of AMD and Nvidia. The latest GPU series of both "red" and "green" can not boast of any breakthrough performance indicators, and their prices are set so much as if they will be swept from the shelves and we are still living in 2021. The audience, on the other hand, notes that the RTX 4000 and Radeon 7000 series cards are questionable purchases against the previous series, whose prices, again, are held at "covid-miner" rates.
It seems that video card manufacturers are caught in a vortex from which they cannot swim: demand for their products has plummeted, but in order to maintain revenue figures, companies do not reduce prices, which leads to a further drop in demand. The situation has become so paradoxical that now it is easier to buy a "gamer" laptop with a 144 Hz screen, a full set of ports, fast memory, a Ryzen 7 / Core i7 processor and a chip RTX 3060/3070 Ti, than just a graphics card RTX 3060. Yes, there will be a gap in performance, of course, mobile RTX 3060 on benchmarks correspond to a full-sized RTX 2060 Super (not the worst card in the line on the price/performance ratio at the time of release) or RTX 2070, but in the case of this configuration consumer at least understand where he had gone ~900-1200 dollars.
Buying a video card from two years ago for $500 or a new one, almost no different in performance, twice as expensive, no one is going to buy now. More precisely, the past three years and an era when CPU and GPU manufacturers loved miners more than their historical audience has hardened gamers and the market. The most impatient have already upgraded as soon as prices have stabilized a bit and the coveted cards and CPUs hit the shelves. The rest are ready to wait some more, until the board of AMD and other companies finally realizes that their attempts to keep the high revenue figures lead only to self-cannibalism and reduction of demand for the top models.