The last few years have been chaotic in the world of PC hardware. Between the COVID-19 pandemic and the GPU mining crisis, component prices have literally exploded. Indeed, we found ourselves in a situation of very high demand, but with a very low supply. It’s simple, both on the AMD and NVIDIA side, everything was out of stock. If this was very harmful for the individual and his wallet, the companies, for their part, have filled their pockets, to the delight of investors.
But as all good things come to an end, during the year 2022, the market experienced a drop in demand. The first cause to remember is the end of mining with graphic cards. The other would be linked to the end of confinements and the economic recovery with the massive return of on-site work. Of course, all this is causing panic among some people. As a result, in order to maintain artificially high prices, some brands are reducing the supply of their products. The aim is to maintain a certain tension between supply and demand in order to keep prices high.
AMD lowers shipments to create price tension?
That’s what AMD admits to doing during a conference with investors. Lisa Su says it herself:
” We undershipped in Q3, we undershipped in Q4, ” […] ” We will undership, to a lesser extent, in Q1 [sic]. “
What this means is that AMD has clearly reduced its shipments in Q3 and Q4 of 2022 and will continue to do so in Q1 of 2023. Nevertheless, AMD is not the only company to engage in this kind of practice as NVIDIA is also doing it. So yes, demand has dropped and indeed some are dropping shipments. The main reason would be not to overload the stocks but factually this strategy also allows to keep the prices high by leaving the market under tension.
From our point of view, this practice will not last indefinitely since it is also the risk to see the demand in free fall… And not to sell anything more by extension. These companies will have to realize that people’s wallets are not expandable at will. Especially since the supply in the mid-range and entry-level sectors is becoming more and more expensive. Just look at the rumored price of the upcoming RTX 4060/Ti at $499. Who would be willing to pay that much for a 60 series?
However, this gives opportunities for some, just look at Intel which recently lowered the price of its Arc A750 à $250 !
