In a recent conference call Nvidia Chief Financial Officer, Colette Kress spoke about the supply and demand for the RTX 30 series of GPUs. Given skyrocketing popularity of gaming due to COVID-19 and stay-at-home recommendations worldwide, it did not come as a surprise that demand for the latest PC hardware from AMD and Nvidia exceeded initial supply. But since Nvidia has not managed to solve GeForce RTX 30-series supply constraints in 2.5 months since the launch, the company is facing heavy criticism from its customers. Nvidia says that it is frustrated with tight supply, but claims that the problem is industry wide.
"While we had anticipated strong demand, it exceeded even our bullish expectations," said Colette Kress, Chief Financial Officer at Nvidia, during the company's earnings call with analysts and investors. "Given industry-wide capacity constraints and long cycle times, it may take a few more months for product availability to catch up with demand."
Cycle times of all modern nodes is about three months, so it is extremely hard for chip developers and makers to quickly react to demand that exceeds supply. Nvidia uses Samsung Foundry's 8N manufacturing technology to make its GA102 and GA104 processors based on the Amere architecture. This fabrication process is not as popular as TSMC's N7/N7P or N5 nodes used by such companies as Apple, AMD, and Qualcomm, though actual production capacities that Samsung allocates for its sub-10nm non-EUV technologies are unknown. Furthermore, given complications with logistics, there are other factors that impact production times of graphics cards.
Nvidia stresses that because of high demand for its latest products, it will continue to face GeForce RTX 30-series supply constraints throughout the fourth quarter of its fiscal year, which ends in late January 2021.
"The demand is just overwhelming," said Jen-Hsun Huang, CEO of Nvidia. "We are going to continue to ramp fast, this is going to be one of our most successful ramps ever. It gives our installed base of some 200 Million+ GeForce gamers the best reason to upgrade in over a decade. So, this is going to be a very large generation for us is my guess."
For years, Nvidia did not have any serious rivals for its high-end gaming products from AMD, but with the Radeon RX 6800/6900-series products the red team finally has competitive offerings that can fight Nvidia's RTX 30-series graphics cards. Therefore, assuming that Nvidia cannot supply enough GPUs, AMD might eat Nvidia's lunch and capture some additional market share. Meanwhile, AMD's Radeon RX 6800/6800 XT graphics cards are also out of stock (possibly due to high demand), but for now it looks like it is hard to get the latest hardware either from AMD or Nvidia.
Despite supply constraints, Nvidia's gaming revenue in Q3 FY2021 (which ended on October 25, 2020) was a record $2.27 billion, up 37% sequentially and up 37% from a year earlier. In total, Nvidia earned $4.726 billion for the quarter. The company expects its sales to hit $4.80 billion on Q4 FY2021.
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I'm not sure how accurate this is, but I've heard it's more like six months from the time a company orders more wafers from a fab (TSMC or Samsung) to the time that product gets on actual retail shelves. Meaning, for Nvidia to have enough RTX 30-series chips to meet demand, it would have had to order those wafers right in the height of the initial COVID-19 lockdowns. Basically, it took a more conservative approach to orders, because the uncertainty of the time made anything else seem crazy. In hindsight, we see that being in lockdown has actually increased demand for computer components and gaming, but that was not at all a given back in March/April/May. It also means that after the initial fast sell out of RTX 3080 in September, if Nvidia ordered a big increase in capacity it will take until February for those chips to hit the shelves.Reply
Also of note is that GPUs are far more complex -- Nvidia had to order more GDDR6X memory, PCBs, etc. Getting from fab to shelf for CPUs is far easier and could be done in three months.
This information is useless unless they tell us exactly how many cards were produced and delivered so far. We don't know if they shipped just 10000 or so cards - then of course only a few people would be so lucky as to get one. But if they shipped say +500.000 cards then it is another matter.Reply
I don't feel bad for themReply
TheDane said:This information is useless unless they tell us exactly how many cards were produced and delivered so far. We don't know if they shipped just 10000 or so cards - then of course only a few people would be so lucky as to get one. But if they shipped say +500.000 cards then it is another matter.
Nvidia's Q3 gaming revenue was $2.27 billion, up 37 percent YoY. Even if you were to assume a rather unrealistic average cost of $1000 per chip, you'd still see well over 2 million chips.
Except for the ubiquitous overpriced supply on eBay. The problem isn't as much supply, as it's bot/scalpers.Reply
Nvidia kept blaming high demand as the cause of shortage, but having gone through so many product launches, it should not come as a surprise for them when a next gen graphic card is released, the demand will always be very high. I won't jump to conclusion now. Instead lets take a look at AMD's supply situation. If they are saying that its an industry wide problem, which I believe it is to some extend, then AMD's GPU supply will be just as bad. What I am hearing is that the supply is actually a few times better than the RTX 3080.Reply
Chung Leong said:Nvidia's Q3 gaming revenue was $2.27 billion, up 37 percent YoY. Even if you were to assume a rather unrealistic average cost of $1000 per chip, you'd still see well over 2 million chips.
I dont think so , I think that they are making OEM orders first then the retail next.
I thinnk that HP , DELL , Lenovo come first for nvidia.
and OEM pay in advance so it will end up in their revenue as well.
Looks like I got exceedingly lucky, I put myself on backorder lists at various retailers for a Gigabyte Vision 3080 on the 4th and I got a notice last night that there's one available for me to pick up. Maybe there's marginally less demand for a card marketed as more workstation-orientated?Reply
I mean it's going to be hilariously bottlenecked until Ryzens are restocked but I won't look a gift horse in the mouth.
I don't want more excuses from Nvidia. I want Nvidia to take shots at Ebay and other scalper havens. There would be plenty of supply for gamers and creators if scalpers were stopped from manipulating the market.Reply