We all know that the lack of supply was a big problem for Nvidia with RTX 3000 GPUs, but now it looks like the problem has turned into declining demand – which is apparently supposed to affect their incoming RTX 4000 graphics cards.
as seen by VideoCardz (opens in new tab)an article from DigiTimes (opens in new tab) — translated by RetiredEngineer on Twitter and served with caution, plus a side order of skepticism — states that Nvidia is facing a combination of factors that, when considered cumulatively, are bad news for the RTX 4000 lineup.
These factors say that Nvidia is facing weaker-than-expected demand from the gaming industry, along with a ‘huge channel inventory’, meaning there’s a load of current-gen RTX 3000 graphics cards still to sell. Then there is also a flurry of used GPUs being dumped by miners after the recent major cryptocurrency crash, exacerbating the situation around the sale of current overstocked Ampere GPU.
It’s a painful combination of factors, and that means Nvidia reportedly wants to cut orders at TSMC over next-gen Lovelace GPUs; but supposedly TSMC is not willing to cede any ground to Team Green.
With Nvidia having already made ‘huge prepayments’ to TSMC to reserve 5nm capacity, the report argues that TSMC will not make concessions on reducing that amount and that Nvidia will have to find replacement customers to make up for any slack from Nvidia. the production. capability you no longer need.
However, the report notes that Nvidia could benefit from delaying shipments by a quarter, or even two quarters, to give Team Green a little more breathing room from the apparent excess capacity.
The report talks more broadly about the drop in PC demand affecting not just Nvidia but AMD as well, and how Team Red has reduced its orders at TSMC – albeit not for 5nm, but for 7nm and 6nm wafers, meaning the next generation. current, not next -gen, products.
Analysis: What does this mean for Lovelace’s next-gen release?
There are many far-reaching claims in this piece, which makes us cautious and watchful to tread more carefully than usual around this particular vein of rumors. That said, it’s not exactly a surprise to hear some of this.
Speculation already pointed to Nvidia spending a ton of money to secure TSMC’s capability for its high-end graphics cards. And we’ve heard several times about the vine now that Nvidia has a lot of excess inventory to clean up in terms of RTX 3000 models, with the problem that gamers (and PC owners more broadly – in fact, all consumers) are being pressured by inflation and the cost of living crisis.
Part of the problem is that prices for Nvidia GPUs still remain relatively high – although they have dropped quite a bit and are only (a touch) above the MSRP – and so high-end graphics cards in particular are still costing the best part of a pair of members.
All of this pretty much confirms the claims made here, and again, it’s clear enough that the big crypto GPU sale is also making things very difficult in terms of moving Nvidia’s existing stock. Some people are apparently willing to take a chance on second-hand mining cards, which seem like a bargain (certainly compared to the still relatively high prices on new cards), despite the dangers inherent in these GPUs that we’ve covered in depth elsewhere.
If Nvidia’s high-end graphics cards are revealed too soon, RTX 3000 sales are going to stumble and slow down even further – and that’s perhaps something Nvidia (and its partners) really can’t afford. If this report holds any truth, and Nvidia is indeed exploring options to cut, or at least delay some, production of the RTX 4000 at TSMC, could we now be looking at a later release date for the next-gen Lovelace GPUs?
Or maybe Team Green will keep the same release deadline – supposedly September, although October has been mentioned recently as well – but only a relatively small number of RTX 4000 graphics cards will be produced to begin with, perhaps?
If that’s the case – and it’s still a big What if at this point – this could lead to another GPU launch where inventory is scarce and prices are therefore pushed up (with scalpers falling on themselves to get involved, no doubt; and all the inevitable chicanery) . Nvidia might even price the RTX 4000 higher anyway – it certainly won’t be more affordable than current-gen products – to help sustain demand for Ampere, while lowering the prices of RTX 3000 GPUs even further to clean up. the ‘huge’ amount of those graphics cards that are apparently still working.
This is all just theory, but nevertheless, there seems to be a growing feeling in the rumor that Nvidia is not in an ideal situation regarding balancing sales through RTX 3000 models (many of them) when introducing RTX 4000 cards, and something may have to give temporarily in relation to the latter. Especially if inflationary forces and the broader economic picture worsen as the year goes on (not an unimaginable scenario by any means).
So Nvidia has had to fight the specter of supply issues with the RTX 3000 for a long, long time, but now the battle is against the headwinds of demand? It seems like a viable scenario. However, the positive facet here is that if the RTX 3000 stockpile really is at ‘huge’ levels as suggested, then presumably we can expect some much larger Ampere GPU price drops than we’ve already seen as the effort to shift these products undoubtedly shifts into a higher gear.