JPR report on GPU shipments - interesting numbers!

[watercooled]

Right up front I'm no market analyst, I've just spotted a couple of interesting points in this quarder's JPR report on AIB shipments. https://www.jonpeddie.com/press-rele...smaller-offset

The crux of the matter is the GPU market, particularly the discrete market, shrunk in the last quarter. Yes, that's very typical seasonality but unless I'm mistaken (and I could well be) it points the finger at something other than 'just mining' as the root of the current pricing situation.

Now, I'm making some assumptions about fab availability here and that Nvidia hasn't intentionally dropped GPU production (retail demand has outstripped supply for longer than fab turnaround time) but if AMD/Nvidia were indeed 'at capacity' then that doesn't make a lot of sense. In Anandtech's interview with GloFo they suggested that wasn't the case either.

AMD increasing shipments (not enough to offset Nvidia decrease, mind, and that's noteworthy) is interesting for a few reasons - they are supposedly planning to stick with what they have through 2018 so could theoretically absorb a decline in demand more easily than Nvidia who are rumoured to have something new sooner (though far from confirmed). However that's assuming Nvidia don't release something far better for mining which would be a heck of a risk for AMD to take, increasing production of a fairly expensive-to-produce GPU that might end up being uncompetitive even at substantially reduced margins. However what they do have is now far more saleable that it was previously which could at least partly explain the increase. It also relies on HBM2 which is separate to, and perhaps currently less contested than GDDR5(X).

Summing up, from what I can tell this is just something else that points towards a major bottleneck being DRAM supply, else in this market I don't understand why Nvidia's shipments would have decreased at all, seasonally or otherwise. GPU prices have risen, but the severity of that rise is largely due to miners*, so it's really not logical that it would be a limiting factor on demand for obvious reasons despite the report hinting at the contrary - if miners backed off on demand, prices would begin to drop to keep sales volume.

*Just to explain, sure even without miners a shortage would cause a price increase, but it would surely be quite limited in the gaming GPU market - miners may be prepared to pay 3x the price which can be seen in places like USA, but I doubt the overwhelming majority of gamers would go nearly that far - price wouldn't have to go up by much to limit demand and/or have people choosing cheaper cards - again that doesn't seem to be the case as <4GB cards, while still in short supply, are generally far more sanely priced now as they become irrelevant for mining hence retailers can't get away with insane pricing.

[kalniel]

Retail demand only outstrips supply in a very narrow market segment. In the rest demand is just down, as per usual long term PC trend.

[DanceswithUnix]

Miners have supposedly been buying cards direct, perhaps these are numbers for what goes through the usual distributers who are bypassed?

It makes no sense that if demand is down, then how come I couldn't buy a graphics card, at one point even if I had the £800+ to spend on what should be a £400 card.

[watercooled]

That's precisely my point. Demand may be up, but supply from AIBs down due to difficulty in sourcing DRAM. It's not the only explanation, just one that kinda fits from what I can tell.

@kalniel: Interesting point actually, I wonder if some of the quarterly drop could be down to seasonally lower demand for cards below the 1060? It is something I hadn't really considered. I guess it's difficult to say without knowing how the market is divided up into segments, but it just seems odd that the entire market would be down in spite of everything - gamers sticking with cheaper cards would likely offset the sales drop? (This is talking about unit shipments, not $$$)

Again, it's difficult to say without knowing market volumes, but I'm not sure I'd refer to everything between £200 - £1000+ RRP as a very narrow market segment in terms of volumes? Below that isn't as big of a market as it once was what with increasingly powerful IGPs.

[CAT-THE-FIFTH]

I have started to notice even the GT1030,GTX1050,GTX1050TI,RX550 and RX560 are starting to slowly go up in price now. Having said that consoles have not really gone up in price and use GDDR5,so unless Sony and MS are subsidising these significantly more than a year ago,it makes me wonder how significant the actual price rise is,ie,is it mining and companies being opportunistic really being the bigger issue. Its like with system RAM,phones are seeing decent amounts of system RAM,even under £200,so if pricing was increasing so massively we would be seeing more phones having less memory. I am not seeing that.

[watercooled]

Well I have seen some bizarre complaints about the S9 having 'only' 4GB RAM, but I get what you're saying. However surely DIMMs are sold around the commodity pricing point so wouldn't be as expensive as they are if that were the case? For reference, 8GB DDR4 is ~£80 at retail so obviously less at the BoM level, and likely lower again for bulk orders. I know it's not exactly the same memory but ballpark £40 (4GB) vs say £20 for a high-end phone isn't disastrous, likewise for consoles, it's likely only making a relatively minor dent in the BoM pricing.

For discrete GPUs, like I said they're bound to increase in price if there's a shortage (it was predicted ~30% increase for the memory itself last year), but miners being prepared to pay almost whatever retailers are asking is likely exacerbating the problem - supply/demand would find a more sane balance with gamers alone but as long as the market is supply-limited (Just to add to it, IIRC GDDR production was reduced at least by some manufacturers, in an already supply-limited market, to make room for mobile/server memory) and no shortage of people willing to pay increasing amounts... Perfect storm? That also tallies with the cards unsuitable for mining being less impacted, though some impact is to be expected - demand is likely to increase from gamers unwilling to pay silly money for higher-end cards, along with the DDR pricing going up of course.

It's like the silicon wafer pricing hyperbole that was doing the rounds a while back. The reality is even doubling pricing there doesn't actually impact the final BoM all that much when you get to the final retail pricing.

[Pob255]

Cat you have to remember that many system builders (I'm not just talking pc's but also consoles and phones here, basically complete units not parts) have contracts arranged well in advance of actual production.
Sony and MS probably locked down prices on ram well before the production short falls, which means they get the first cut of the total at lower rates, which in turn lowers volume available and raises the price for the next in line

edit: graphics cards manufacture, due to lower total volume and higher redundancy rate are going to be far down the pecking order compared to phones or consoles

I think in many ways mining has hit a wider public audience at the same time as the ram supply issues and falling demand in discrete cards and increase demand in other areas.
Another area people tend to overlook I think is speculative buying, ie people buying to resell at profit, granted it's probably not a major factor but it is a factor esp as scarcity increases.
So it's no one thing to blame, but the internet seems to hate that and only likes to pick on one cause to blame.

[CAT-THE-FIFTH]

Well I have seen some bizarre complaints about the S9 having 'only' 4GB RAM, but I get what you're saying. However surely DIMMs are sold around the commodity pricing point so wouldn't be as expensive as they are if that were the case? For reference, 8GB DDR4 is ~£80 at retail so obviously less at the BoM level, and likely lower again for bulk orders. I know it's not exactly the same memory but ballpark £40 (4GB) vs say £20 for a high-end phone isn't disastrous, likewise for consoles, it's likely only making a relatively minor dent in the BoM pricing.

For discrete GPUs, like I said they're bound to increase in price if there's a shortage (it was predicted ~30% increase for the memory itself last year), but miners being prepared to pay almost whatever retailers are asking is likely exacerbating the problem - supply/demand would find a more sane balance with gamers alone but as long as the market is supply-limited (Just to add to it, IIRC GDDR production was reduced at least by some manufacturers, in an already supply-limited market, to make room for mobile/server memory) and no shortage of people willing to pay increasing amounts... Perfect storm? That also tallies with the cards unsuitable for mining being less impacted, though some impact is to be expected - demand is likely to increase from gamers unwilling to pay silly money for higher-end cards, along with the DDR pricing going up of course.

It's like the silicon wafer pricing hyperbole that was doing the rounds a while back. The reality is even doubling pricing there doesn't actually impact the final BoM all that much when you get to the final retail pricing.

Cat you have to remember that many system builders (I'm not just talking pc's but also consoles and phones here, basically complete units not parts) have contracts arranged well in advance of actual production.
Sony and MS probably locked down prices on ram well before the production short falls, which means they get the first cut of the total at lower rates, which in turn lowers volume available and raises the price for the next in line

I think this is all just typical profiteering and cartel behaviour by the RAM companies,per normal.Its like what companies like De Beers did with diamonds - excuses about "costs" and "risks" which were more like them making sure supplies were restricted in such a way to maximise prices. I know they get defended to death on the interwebs,but RAM companies were fined nearly a billion dollars for price fixing between 2000 and 2010. Samsung admitted doing it last time they got fined.

This is why China is investigating them:

https://www.kitguru.net/channel/gene...-price-fixing/

The whole point,is the companies are recording great profits - it was like when everyone argued with me saying GPU prices had to go up since process node prices went up and less market excuses. This was just after a conveniently timed internal slide from Nvidia was leaked which had them moaning about pricing. Yet,look now, the margins are much higher overall,and certainly profits are huge for companies like Nvidia.

I mean just because the price of wheat flour goes up by 10% does not mean bread prices go up by 50% for example. I don't buy most of the excuses,otherwise all electronics would be jumping up in price at a similar level.

Loads of consumer devices use DRAM and NAND.

All they can do is advertise 5000MHZ DDR4 that nobody wants. Surely if production was so limited they would be concentrating on slower DDR4 so they can supply more to companies like Dell,etc. How many companies buy such high speed DDR4 - hardly anyone. They only use it as an excuse to halo price increase all their lower end products.

I am not seeing laptops suddenly jumping up by £200 in price,etc. Its why they can simply eff off if they think if I am some zombie who will accept all their useless excuses. I have seen all of it over the last 15 years- the moronic fools are just annoying countries like China who will eventually just bypass them for supply and do it at a reasonable cost.

Its only because tech companies have correctly realised,if they show half a story to our market,they can rise prices significantly and hobbyists and PC gamers will absorb most of the price increases and then most likely defend it. Not even Apple,etc increases prices at the rate we PC gamers seem to be accepting. The same with people arguing for loot boxes,etc and then EA,etc basically saying it wasn't required,and certain devs doing very well without them.

This is all screwing up even the secondhand market so there is no escape there too.

Yet magically for the other markets,they seem to be able to find "ways" to not lead to silly increases in price,ie,100% price increases and so on.

If they keep trying to pull this trick over the next few years,they can stick their prices increases up their collective nether regions. I am not here to justify a CEO's extra Bugatti.

If they want to up the prices,then by extension I will keep what I get longer and longer and longer. If consoles seem to make more sense,I will get a console. If PC games become more and more loot box infused,they can keep them too.

[watercooled]

I'm not defending the RAM manufacturers nor suggesting any cause for the shortage (artificial or otherwise), rather looking at the current market situation. The sudden drop in certain DRAM pricing after the investigation announcement was... interesting for sure.

I wasn't one to agree with the excuses for increasing GPU pricing and I'm definitely with you on that one - with recent entrants, the PC gaming market seems to have become increasingly tolerant to price gouging for anything with 'gaming' scribbled on the side of it. Production costs have surely increased per mm2 but die sizes are generally down per segment, the market is larger and release cadences longer - substantial increases don't tally with that, and it reflects in margins as you point out.

WRT final product pricing in relation to DRAM see my previous post - for the most part it's not that significant on the BoM list, then you have contract pricing as Pob says. A £20 component becoming £40 on a £600 device isn't as significant as you'd first think (my ballpark estimate probably isn't that far off - 4GB LPDDR4 on the S7 was around $25 according to a teardown). As I also explained I reckon GPUs are a special case where natural increases (partly due to card supply>demand if they're flat out limited by DRAM supplies, partly due to increased pricing of said DRAM if they're not prepared to eat costs) are exacerbated by feeding a market that is tolerating unusually high prices. Were it not for miners, I really can't see cards selling out at current USA retailer pricing, hence the market wouldn't tolerate such pricing in the first place.

[CAT-THE-FIFTH]

I'm not defending the RAM manufacturers nor suggesting any cause for the shortage (artificial or otherwise), rather looking at the current market situation. The sudden drop in certain DRAM pricing after the investigation announcement was... interesting for sure.

I wasn't one to agree with the excuses for increasing GPU pricing and I'm definitely with you on that one - with recent entrants, the PC gaming market seems to have become increasingly tolerant to price gouging for anything with 'gaming' scribbled on the side of it. Production costs have surely increased per mm2 but die sizes are generally down per segment, the market is larger and release cadences longer - substantial increases don't tally with that, and it reflects in margins as you point out.

WRT final product pricing in relation to DRAM see my previous post - for the most part it's not that significant on the BoM list, then you have contract pricing as Pob says. A £20 component becoming £40 on a £600 device isn't as significant as you'd first think (my ballpark estimate probably isn't that far off - 4GB LPDDR4 on the S7 was around $25 according to a teardown). As I also explained I reckon GPUs are a special case where natural increases (partly due to card supply>demand if they're flat out limited by DRAM supplies, partly due to increased pricing of said DRAM if they're not prepared to eat costs) are exacerbated by feeding a market that is tolerating unusually high prices. Were it not for miners, I really can't see cards selling out at current USA retailer pricing, hence the market wouldn't tolerate such pricing in the first place.

I am not talking about you or Pob255. Its just that it seems PC gamers and DIY builders are flooded by these ridiculous price increases,and they are not like even a 20% to 30% one which would be considered large by normal standards.

These are like 50%,100% and so on increases on things like RAM- its taking the mickey. It really is and its not the first time its happened. Look at HDD pricing - pricing was justified by "floods". Yet pricing per GB stagnated for years and warranties went down. Everyone just accepted it. The same goes with gamers excusing all the microtransaction stuff,even attacking commentators on YT for pointing out it wasn't as required as gamers think they are,etc and then the said companies proving the commentators correct. It just seems our whole segment has gotten used to taking every bit of PR bumpf tech companies put out as gospel truth. I mean goodness grief people like Rollo used to be mocked for their astroturfing and now I see gamers/enthusiasts literally repeating the same sort of stuff he said a decade ago. This is not just GPU pricing,its more than that.

[Pob255]

Oh I don't doubt there's some price shenanigans going on, but a lot of what's happened at the retail level isn't being done at the other end of the chain, I don't doubt there's been prices increases at the far end.

But again big companies like apple have prices and volume arranged in advance by CONTRACT, so of the actual production runs only a small proportion ends up as separate retail components.
And the end price we see of those retail components often comes down to the final production run numbers & how good/bad the big first pick contracts where.

I know price fixing happened in the past and with fewer players in the market now it's even easier now, heck they don't have to price fix all they need to do is control production volume and let distributors push the price up.

I'm not defending them, in many ways I dislike the whole system, but I'm not blaming one factor in a long ass chain which magnifies at each step, this is a situation where multiple factors are compiling each other to drive the prices to silly levels.

[CAT-THE-FIFTH]

Oh I don't doubt there's some price shenanigans going on, but a lot of what's happened at the retail level isn't being done at the other end of the chain, I don't doubt there's been prices increases at the far end.

But again big companies like apple have prices and volume arranged in advance by CONTRACT, so of the actual production runs only a small proportion ends up as separate retail components.
And the end price we see of those retail components often comes down to the final production run numbers & how good/bad the big first pick contracts where.

I know price fixing happened in the past and with fewer players in the market now it's even easier now, heck they don't have to price fix all they need to do is control production volume and let distributors push the price up.

I'm not defending them, in many ways I dislike the whole system, but I'm not blaming one factor in a long ass chain which magnifies at each step, this is a situation where multiple factors are compiling each other to drive the prices to silly levels.

These companies are not helping themselves- if China is now trying to investigate them and now is dumping billions into tech to get around the cartels,then they are essentially inventing new competitors. This has happened so many times in the world - OPEC tried to screw around with oil pricing,Russia tried the same with gas as a political weapon,and guess what,alternatives appeared,and prices probably fell more than if they just didn't try screwing around with stuff. The worst thing if they even ramped up pricing by even 30% to 40% on something like RAM,most people would accept it,but doubling or tripling RAM pricing is just taking the mickey.

Even with the card pricing,esssentially pricing has gone up over time before mining,and it seems AMD/Nvidia and the techsites have successful pulled the wool over the eyes of many gamers,and people still defend it. Mining has made a less than ideal solution even worse.

Look at how much performance you could have gotten if you had £200 to £300 on a new card,even before mining,yes a whole 20% extra performance in 4 years.

[spacein_vader]

These companies are not helping themselves- if China is now trying to investigate them and now is dumping billions into tech to get around the cartels,then they are essentially inventing new competitors. This has happened so many times in the world - OPEC tried to screw around with oil pricing,Russia tried the same with gas as a political weapon,and guess what,alternatives appeared,and prices probably fell more than if they just didn't try screwing around with stuff. The worst thing if they even ramped up pricing by even 30% to 40% on something like RAM,most people would accept it,but doubling or tripling RAM pricing is just taking the mickey.

OPEC were/are successful in raising the price of oil.

[kalniel]

It makes no sense that if demand is down, then how come I couldn't buy a graphics card, at one point even if I had the £800+ to spend on what should be a £400 card.

Demand for the card you are interested in might be increased, but overall demand (ie for other chips) is down. See the following quote:

Year-to-year total GPU shipments decreased -4.8%, desktop graphics decreased -2%, notebooks decreased -7%.

Most of the decrease is in notebook chips (7% vs 2%). This is made even more clear in table 2 - discrete Desktop shipment growth actually increased over last year, it's integrated desktop, and discrete and integrated notebook, that decreased.

That's precisely my point. Demand may be up, but supply from AIBs down due to difficulty in sourcing DRAM. It's not the only explanation, just one that kinda fits from what I can tell.

@kalniel: Interesting point actually, I wonder if some of the quarterly drop could be down to seasonally lower demand for cards below the 1060? It is something I hadn't really considered. I guess it's difficult to say without knowing how the market is divided up into segments, but it just seems odd that the entire market would be down in spite of everything - gamers sticking with cheaper cards would likely offset the sales drop? (This is talking about unit shipments, not $$$)

Again, it's difficult to say without knowing market volumes, but I'm not sure I'd refer to everything between £200 - £1000+ RRP as a very narrow market segment in terms of volumes? Below that isn't as big of a market as it once was what with increasingly powerful IGPs.

Table 2 breaks it down - shipping of discrete desktop cards increased year on year, but integrated and laptop chips decreased.

[scaryjim]

... it's integrated desktop, and discrete and integrated notebook, that decreased. ...

Unsurprising - 2017 was the first year for a long time that there was a mainstream desktop CPU without an IGP that was "worth" buying. And a CPU without an IGP needs a dGPU...

Plus I do wonder how many people have held off replacing lower-spec desktops to see what Raven Ridge brought to the party. This quarter's desktop IGP shipments will be very interesting...

[CAT-THE-FIFTH]

OPEC were/are successful in raising the price of oil.

OPEC got screwed over the long-term though. They were extremely powerful back in the day but their power is much less than now. It not only meant that more countries entered the market but the oil crisis in the 70s started the push towards more economical cars and Japanese car companies started gaining prominence as a result. They basically had a very good thing going and ultimately got more competitors into the market and technologies which were more energy efficient to start gaining traction.