AMD Ramping GPU Production, Confirms Memory Is Behind Shortage

AMD announced its Q4 2017 and full year financial results yesterday. Much to the surprise of Wallstreet the company smashed street expectations on revenues, profitability and provided significantly better guidance for Q1 2018 than expected. We'll be covering the company's financials in detail later today, so stay tuned for all the details and the implications behind this winning quarter for the company.

A subject that's perhaps closer to the hearts of PC gamers and enthusiasts than financial figures is the dismal state of GPU supply in the market. Throughout the past several months graphics cards have been so incredibly hard to find, and when they were in fact available on rare occasion they were overpriced to the moon and back.

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AMD Ramping GPU Production, Confirms Memory Is Behind Shortage

Thankfully AMD has some good news for all of us. CEO Dr. Lisa Su confirmed that the company is in fact ramping GPU production to meet the increasingly high demand from gamers and the crypto market. Su confirmed in a question and answer segment during yesterday's earnings call that production isn't limited by Silicon, rather by an industry wide shortage in memory. Something that we've seen brought to light last year through various sources ahead of the massive price increases we saw in the fourth quarter.

AMD CEO Dr. Lisa Su - 30-1-2018 - AMD Q4 2017 Earnings Call

"The GPU channel is lower than we would like it to be. So, we are ramping up production. At this point we're not limited by Silicon per se, so our foundry partners are supplying us. There are shortages in memory and I think that is true across the board whether you're talking about GDDR5 or talking about High Bandwidth Memory [HBM]. We continue to work through that with our memory partners and that will be certainly one of the key factors going into 2018."

AMD also confirmed seeing even stronger demand for GPUs in Q1 2018 as compared to Q4 2017. Typically demand is higher in the fourth quarter compared to the first, due to the holiday season. Although this anomalous increase in demand on GPUs in the first quarter of this year appears to be the result of pent-up demand from PC gamers as well as a massive increase in Ethereum mining activity in January.

It's not yet clear whether DRAM shortages will drag on this year, hopefully we will get a clearer indication of whether these shortages will subside in the coming months. But as things stand today, we're seeing GPU supply in the channel pick up and prices beginning to normalize. Both good signs for PC gamers looking to buy a new GPU.

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