
Nvidia Appears To Have A GPU Inventory Problem - jannes
https://seekingalpha.com/article/4182662-nvidia-appears-gpu-inventory-problem
======
skate22
I bought a 1080 TI a while back for around $750.

Bitcoin surged and the same card was $1300 for a few months.

Now it's back to $750ish

My FPS stayed pretty stable though

~~~
fermienrico
What point are you trying to make?

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qop
That its really hard to work a hardware company when a digital hypecoins
affect the value of your product.

It's really not nvidia's fault. They're in a really difficult position here to
try and absorb all this new business space without stretching too thin or
using too much velocity.

But in terms of processing graphics, the hardware is great. Using gpus for
mining digital money hurts people using gpus for graphics, which was sorta the
point in the first place. Maybe not now, but it used to be.

I don't mean to make the argument that graphics are more important than
digital money, but it's like the Bitcoin community has made zero effort to be
introspective about the impact it has on people who just want to play games or
whatever. Or even power usage in general.

Bitcoin is such a weird phase of tech history in that its completely
counterintuitive to altruism. I always imagine the Internet wanting to try and
always move towards a better, more utilitarian future and benefit the users in
a collective sense, but Bitcoin doesn't seem to be about that anymore.

Not parent commenter, just my two cents.

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davidhyde
The author is shorting Nvidia stock (as he / she discloses at the end of the
article). So, while this article attempts to be objective, I just don't
believe it can be.

~~~
feefie
Agreed. The author's bias makes this unethical, in my opinion. I wish HN
didn't promote posts like this.

~~~
batbomb
If that's how you feel, then you need to block about half of everything on
Seeking Alpha

~~~
joejerryronnie
Most of what I see on Seeking Alpha is people cherry picking charts and
statistics to support a pre-existing hypothesis. Many times authors
continually double down on clearly wrong opinions and just say "oh well, the
market is crazy".

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Tenoke
Seriously? I find this hard to believe - prices of GPUs have been ridiculously
high (much higher than at launch) for so long precisely because the supply was
so short.

Pretty much every supplier I've seen would either sell out any high-end Nvidia
GPUs almost as soon as they got them or would ramp up the price more and more.

This is either an incorrect rumour or some very weird shitty strategy by
Nvidia that backfired hard (I lean towards the former).

Even now OEMs should have very little problems selling cards at (above) MSRP
so there must be something more going on.

~~~
ponzored
Miner demand was about 50% of sales. Admittedly this is because a lot of
gamers were turned off by high prices.

That demand has evaporated since the price of Bitcoin alternatives (eg.
Ethereum) has plummeted, and the difficulty of mining is still very high since
now ASICs can mine many coins more efficiently than consumers GPUs.

Plus it seems like Nvidia are stuck with a lot of low-end chips. Many miners
were buying things like the 1060.

However, Nvidia have no direct competition in the GPU space anymore. They can
hold off their next product launch for months and wait for their inventory to
clear.

~~~
unethical_ban
>Nvidia have no direct competition in the GPU space anymore

At what level? AMD does the same thing in GPU they do in CPU: They might not
hold the overall performance crown, but their value is often better at several
tiers than their competition. I really want an RX 580.

~~~
Nursie
The 580s, AFAICT, are only really competitive with nVidia's mid range and have
been priced higher for some time due to mining.

The Vegas have not been price competitive with nVidia's higher end offerings,
have been very power hungry and very hot.

AMD needs to pull something out of the bag, it's being left behind.

~~~
broknbottle
The Vega cards (56 and 64) were definitely priced competitively as NVidia felt
the need to release the 1070 Ti out of nowhere. It sits in a weird price /
performance area smack dab between the 1070 and 1080 cards. In addition, the
Vega architecture is pretty efficient and your statement about being power
hungry and very hot is false.

~~~
Nursie
Perhaps they were when on their discounted launch price, but they quickly
jumped up in price (around £100 in a week, even more a few weeks later) and
just weren't available for quite some time AFAICT.

> In addition, the Vega architecture is pretty efficient and your statement
> about being power hungry and very hot is false.

Excuse me, but I speak from personal experience here. It's really not very
efficient, I bought a 64 on launch day. It was hot, noisy and power hungry
compared to nVidia cards at similar performance levels, which is the main
reason I didn't keep it for long.

~~~
mizzack
Stock Vegas are overvolted (ridiculously so) and clocked past their efficiency
range.

The architecture is quite efficient up to ~1400MHz.

------
bitcraft
In my local market, the slowing down of the crypto fad is showing. Used GTX
1080 GPUs are no longer hawked at $800 and there are various ASICS generally
available. Even new retail cards are coming down in price, but are still way
too high for technology that’s been available for a couple years now.
Unfortunately, I believe that Nvidia is going to keep the prices high so that
they can position the upcoming 11 series at the $700 mark just because they
can.

~~~
cptskippy
The article states that oversupply is in low-end GPUs. Did Nvidia incorrectly
assume there would be a demand for low-end GPUs somewhere?

My understanding is that the demand for high-end GPUs was driven primarily by
the shortage of middle-tier GPUs. High-end GPUs obviously are faster at mining
but their cost and power consumption meant that they were lower profit and
higher risk. Thus miners were buying up all of the middle-tier GPUs. Lower-end
GPUs were largely overlooked due to RAM limitations the presented that limited
their useful life as miners.

The shortage of middle-tier GPUs meant that gamers could either go for higher
or lower tier GPUs or just hold out. Thus high-end GPU prices rose as some
people chose to upgrade. When crypto currency prices peaked last fall this
created futher demand for the high-end GPUs limiting their supply and further
driving up prices. Now that crypto currencies prices are falling and demand
for GPUs has waned, the artificial demand for high-end GPUs has disappeared.

But was there ever a demand for the low-end GPUs? If you absolutely needed a
GPU sure, but the last 3 generations of GPUs have been all about 4k or VR
gaming at 60+FPS. This isn't a market that low-end GPUs can satisfy. Most
people looking to upgrade, want an upgrade. If you have a 3 year old middle-
tier GPU it can hold it's own or beat most current low-end GPUs.

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nightcracker
That's not an inventory problem, it's a pricing problem.

~~~
kernoble
I was thinking the same thing.

It looks like sellers/board-makers were just charging what they thought they
could get away with because the consumers weren't price sensitive, not because
of a shortage.

e.g. If you normally sell 100 Video Cards, at $500, but now you can sell 100
at $750 you'd be foolish not to increase the price and capture the margins
that go along with it.

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peatmoss
I recently upgraded to a 1060 6GB card (at inflated prices, because it didn’t
look like there’d ever be a break in the storm). I got to thinking, I doubt
I’ll ever feel much need to upgrade the screen I game on from 1080p to 4k,
mostly because I sit across the room and my eyes naturally antialias things at
distance...

Given that combination of factors, I have to wonder what it’ll take to make me
want to upgrade from my modest 1060. I can’t imagine what sort of incremental
improvement video hacks will make this card too slow at 1080p.

I have to wonder if 4k gaming and VR are the stopgaps that’ll keep some demand
for improved gaming performance until some paradigm shift happens, such as the
mainstreaming of realtime raytracing. It’s crazy to think that since my first
Voodoo video card until now, it’s just been a steady evolution and layering of
graphical hacks. We’ve known since before then that eventually raytracing
would be an optimal case. I wonder how far away from a total revamping of 3D
graphics we are... two generations of GPUs? Three?

~~~
bitL
Raytracing is faking it as well, but the illusion is a bit better ;-)

~~~
peatmoss
I suppose if the universe is in fact a hologram as some scientists have
hypothesized, and we’re just living in a 3d projection then we could say
reality is faking it :-)

But the current gen video hacks and future raytracing are pretty hard to
compare. Raytracing can be an accurate simulation of the physics properties of
light. I suppose the biggest caveat is whether you’re doing forward or
backward raytracing. Backward raytracing simulates only the photons relevant
to the observer. Forward raytracing simulates photons from various light
sources, a small fraction of which are observed by the camera.

Both are still based on the physical path of virtual photons, which as far as
models go, is a pretty solid illusion!

~~~
dgacmu
We still fake the surface properties. Skin, for example, involves a lot of
subsurface scattering, and we're very far from that. So texture maps it will
be for a long time.

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bitL
Hmmm, if ASUS started selling 1080Ti for $500 instead of $1000, I am sure that
would have resolved itself pretty quickly ;-)

~~~
ksec
May be there is a term for it, but it is a classic example how demand suddenly
disappear when the price has dropped because everyone thinks / knew it is
going to drop further. For Example, they know the 1080Ti were going for $400,
but due to crypto it shoot up to $1000, now even at $500, they may as well
wait a little more, and new graphics Turing or Ampere are coming soon anyway.

~~~
bitL
So the optimal strategy for NVidia is to shred those redundant silicon dies?
At some point new Vega will put a pressure on them to release consumer
Volta/Turing/Ampere/whatever-they-name-it and at $1000 there is not much hope
for getting rid of Pascals via standard sales channels.

~~~
jdietrich
_> So the optimal strategy for NVidia is to shred those redundant silicon
dies?_

Potentially, yes. Dumping their current inventory at the market-clearing price
might badly affect demand for their next generation of products and damage
their relationship with board partners. Lower GPU prices from Nvidia will
barely trickle down to customers due to the rising cost of GDDR memory and the
fixed cost of all other aspects of AIB manufacturing. Constraining supply to
keep prices close to list might be frustrating for consumers, but it's
probably in the long-term interests of Nvidia and their board partners,
especially considering the weak competition from AMD.

------
santialbo
Let's see if this translates into a price drop. I have been wanting to build a
gaming pc but the prices for high end graphics cards are absurd.

~~~
samueldavid
i have been waiting for a long time :(

~~~
mastax
Prices have been dropping ~$10/week, give it some time
[https://pcpartpicker.com/trends/price/video-
card/](https://pcpartpicker.com/trends/price/video-card/)

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bhouston
We are at the tail end of the 10-series GPU live cycle. Everyone is waiting
for the 11-series release. Why would any one buy an overpriced card now that
is sure to be made obsolete in just a few months time?

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romanovcode
1080TI is going to stay for years to come.

~~~
revanx_
Hah, that's what they said about maxwell architecture.

~~~
bitL
750Ti lasted surprisingly long...

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baldfat
I Am So Mad. I have had a new workstation purchase waiting for the cards to
calm down and now I read this? We get no new technology and prices where a
1080ti equals the retail price of a Titan and now they have 300k to much
inventory?

NVIDIA needs to be greeted with a Linus salute again. They have been horrible
for Linux and horrible on me having a new workstation at work.

~~~
occams_chainsaw
Card prices have been back to normal for a while now

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dmm
The GeForce 10 series is 2+ years old and are still selling around MSRP. Is
that normal?

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overcast
For top tier video cards? yes.

~~~
letsgetphysITal
For two year old top tier video cards which are only top-tier because the
manufacturer is not releasing later models to try and get rid of the old
stock? Probably not.

(I have no evidence that they are not releasing newer cards just to continue
to sell the older stock at MSRP).

~~~
overcast
Prices are determined by what people are willing to pay for things. A video
card isn't a requirement to sustain life, it's a luxury. If people think $1000
for one is too much, they simply won't buy one. Obviously a business wants to
maximize profit, but it's up to the consume to decide if it's worth it.

------
jonplackett
Are they doing what de beers do with diamonds, hoarding them to create fake
scarcity?

~~~
ponzored
Diamonds are forever, but Nvidia GPUs are for 24 months.

~~~
smcl
Curiously I have a feeling that diamond jewellery falls further when you just
look at the short term. What I mean is that (according to a few things I've
read, and neatly summarised at
[http://diamondssuck.com](http://diamondssuck.com)) immediately after purchase
the resale value of your diamond ring hits the floor - whereas you can at
least punt a GPU for a short while afterwards.

This is mostly beside the point though - you're right that GPUs are
effectively obsolete after a very short period and have very little value in
the long term :)

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bitL
[joke] Plot twist: A cousin of both Jensen Huang and Lisa Su was arrested in
Taiwan for propelling price of BTC in the past year using bots running
advanced Deep Learning. [/joke]

[not joke] Jensen and Lisa are family. [/not joke]

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tsenkov
Doesn't this only happen when huge preorder(s) get cancelled? Any big players
in bitcoin mining bankrupted lately?

~~~
Cthulhu_
Dunno, but the BTC price has dropped so the demand for GPUs has dropped along
with it.

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ilitirit
I wonder if this has anything to do with ETH not being able to be mined on 3GB
cards any more. I may be mistaken, but I recall several months back people
with 3GB 1060s no longer being able to mine ETH because of the size of the
DAG.

[https://webcache.googleusercontent.com/search?q=cache:C6d8VK...](https://webcache.googleusercontent.com/search?q=cache:C6d8VKMhAuEJ:https://investoon.com/tools/dag_size+&cd=3&hl=en&ct=clnk&gl=za&client=firefox-b)

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raverbashing
Good, now I can have a cluster of GPUs to use Deep Learning to predict
cryptocoin prices.

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LinAGKar
Meanwhile, I'm still waiting for a graphics card I ordered two and a half
months ago.

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sandworm101
What is Nvidia's strategy for "streaming" games, games that execute on a cloud
server and streaming to thin-client machines? I assume such a future would see
the gamer market for cards disappear.

Take that future, add the possible future collapse of crypto currencies, and I
see a significant existential risk for anyone whose business relies on GPU
sales. Not a 100% future, not ever 25%, but something to think about.

~~~
xemdetia
I don't think there is any majority thinking that streaming games is a thing
now that VR's around. Game streaming was struggling against the speed of light
to get a modest/responsive game experience. Even then on the low end there's
plenty of games that'll work on intel embedded just fine so it just becomes a
who does it actually serve kind of question to me.

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cptskippy
> The report also cites Nvidia aggressively buying GDDR5 as evidence that they
> now have an excess stock of lower-end GPUs that need to be made into boards
> as well as other insiders/sources citing an inventory buildup.

Weren't lower end Nvidia GPUs not suitable for use in Mining?

Perhaps Nvidia assumed people who typically buy a new GPU annually would just
pickup a low end unit instead of waiting so they over produced?

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dogma1138
300,000 GPU dies is maybe 30M worth of inventory to NVIDIA especially
considering that if these were "mining" cards those were likely GP104 or even
106's which are worth less than $100 per die.

NVIDIA made a $3.2bln in revenue in the last quarter with gaming accounting
for more than half of that so do the math just how many GPUs they actually
sell.

Short sellers are becoming really desperate.

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ChicagoDave
Recently tried to purchase a batch of P102-100's for mining and hit a dead
end, so I'm pretty sure this article is BS.

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_Codemonkeyism
1080 TI Asus still >900 EUR Amazon DE.

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IshKebab
So bitcoin miners aren't the reason for the insane GPU prices then?

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edshiro
Using GPUs to mine Bitcoin is a bad idea. That's why most serious Bitcoin
miners would buy ASICs.

But Ethereum is much more amenable to GPU-mining so I presume NVIDIA and AMD
got a lot of love (and $$$$) from this mining community.

~~~
davidgrenier
What constitute a good or bad idea has to be related with how much money you
end up making. As it stands the variety of crypto currency and the fact that
an ASIC's algorithm is set in stone makes it so it's possible to mine some
crypto currencies on GPUs for a better profit with respect to the cost of
electricity.

~~~
davidgrenier
Not to mention, the ASIC I've seen was mounted with two delta-like fans and
was about 3 times noisier than 6 TI cards. Also, power availability is always
a limiting problem the true metric eventually becoming how much hardware can
you run on the power you have access to and how much money will that net you
per day/month.

