Nvidia and AMD GPU Oversupply to Last Until Summer - Report

Photo (Image credit: NewEgg)

While we've known for some time that the crypto bust left AMD and Nvidia with an excess amount of GPUs, the Jon Peddie Research group says this will continue on for almost half a year (up to this summer).

Jon Peddie Research is a third-party analyst firm that estimates GPU trends like market share between AMD, Nvidia, and Intel (which includes iGPUs, making Intel the largest graphics vendor). According to its findings, AMD and Nvidia overestimated cryptocurrency-derived demand throughout 2018. That led to such an excess supply of GPUs that the entire graphics market suffered a 2.65 percent decline in shipments going into Q4 last year. But this also includes Intel, which didn't suffer as much as AMD and Nvidia, whose sales declined 6.8 percent and 7.6 percent, respectively, from Q3 to Q4.

AMD's 2018 Q4 was still better than its 2017 Q4, and while the company predicts a poor Q1 for this year (likely due to excess GPU inventory), it seems AMD has weathered the crypto bust rather well. AMD predicts it will still grow overall in 2019, likely thanks to AMD's upcoming Zen 2 CPUs.

Meanwhile, Nvidia suffered extreme losses in Q4 gaming revenue (despite having a solid Q3) and launched its new Turing GPUs. Nvidia is also predicting a poor Q1 like AMD, but with an even sharper decline in revenue. That's also likely due to excess inventory, which seems to have impacted Nvidia much harder than AMD. AMD might be somewhat protected from the volatility because it manufactures both GPUs and CPUs, granting it the ability to fall back to one market when the other fizzles.

For consumers, however, this is all very good news. Most people shopping for new PC parts have probably noticed how low prices are for last-gen GPUs, especially in the mid-range. You can buy GTX 1060s and RX 580s comfortably within the low-$200 range, or even cheaper sometimes, and RX 570s are going for the mid-$100s during seemingly regular sales.

Although cards such as the GTX 1080 and 1080Ti are in short supply and thus command high prices, cards like the GTX 1070 and 1060, and the RX Vega 56, 580, and 570, are still in high supply and are consequently much cheaper than they were during the cryptomining craze. AMD's GPUs even come with free games, further increasing the value. Now is a great time to buy a last-gen GPU, as GPU prices could slowly increase as inventory is shuffled out this year.

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Matthew Connatser

Matthew Connatser is a freelancing writer for Tom's Hardware US. He writes articles about CPUs, GPUs, SSDs, and computers in general.