PC makers state AMD Threadripper CPUs in extremely short supply due to Lenovo contract

Jason R. Wilson
PC makers state AMD Threadripper CPUs in extremely short supply due to Lenovo contract 2

AMD Threadripper 3000 and Threadripper Pro 3000 processors have been in short supply for several months, according to six PC builder executives and a US IT distributor who spoke recently with the website The Register.

Lenovo blamed for fear placed on clients not exclusive with AMD, especially with the new Threadripper Pro 5000 CPUs

Rumors of the pool being the lowest in all of Threadripper's history. Readers will remember that AMD introduced the Threadripper line in 2017, advertising the processors as a premium, high-performing CPU capable of better processing power compared to Intel's products, especially in demanding workflows, such as video editing.

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The executives and IT distributors' woes in accessing AMD Threadripper processors, including the newest Threadripper Pro 5000, are due to a lack of access to the latest chips from AMD's exclusive Threadripper partner, Lenovo. The executives are featured AMD-based system builders Maingear, Puget Systems, and Velocity Micro.

AMD gave access to the newest workstation processors, but AMD also restored the Lenovo ThinkStation P620 systems with the latest Threadripper Pro 5000 chips. Lenovo's exclusive contract with AMD allows the company to have an initial supply of the Threadripper Pro 5000 line upon release this last month. The other companies will not see any supplies until possibly the latter half of 2022.

A Lenovo spokesperson commented about the shortage, "I have been assured that the CPU supply is not the issue regarding the ThinkStation systems." The Lenovo website also shows the P620 systems with Threadripper Pro 3000 processors instead of the newest line from AMD.

The current shortage of Threadripper processors has raised the alarm in the workstation marketplace, with vendors and manufacturers concerned that Lenovo has an unfair advantage in sales. However, this lack of chips has not stopped businesses from waiting until the supply improves.

The PC industry is trending overall towards paper launches and product announcements far ahead of general availability.

[...]I think I can speak for everyone that we're wary of product launches that not everyone can participate in.

— Jon Bach, President, Puget Systems

Currently, the AMD chip shortage is echoing through the global chip shortage that has been in effect for almost two years. This dramatic change in the economy and manufacturing has caused companies like AMD, Intel, and NVIDIA to research alternate expansion options, such as building manufacturing plants in areas throughout Europe and even the United States. Along with expansion solutions, manufacturers' prioritization of products has also been a high focus due to typically relying on large chip manufacturers (i.e., TSMC) to assist with the manufacturing, slowing the process further and creating a higher demand.

Dr. Lisa Su, CEO of AMD, stated that the company had made crucial investments to improve production with manufacturing partners. Such investments cover wafer and substrate capacity, as well as back-end capacity.

Our goal is frankly to have enough supply to satisfy the demand out there," she said during the call in early February. Our view is we're going to continue to work with our partners and our customers to ensure that we know what they need.

— Dr. Lisa Su, CEO, AMD

The lack of Threadripper chips has only escalated over several months, causing manufacturers to wonder if this situation is separate from the current global shortage. Businesses have slowly seen a drop in numbers, causing near plans for manufacturers to be more strained.

Velocity Micro CEO Randy Copeland has commented that his supply of Threadripper processors — specifically, the Threadripper 3970X and 3960X — is still in supply at their plants. Still, the company's most prominent workstation, Threadripper 3990X, offering 64 cores, is completely wiped out. Velocity Micro does produce Threadripper Pro 3000-based workstations. Still, Copeland states that the high cost of the processors from AMD does not warrant the company to sell a specialized chip with only specific users.

We put so much marketing effort behind Threadripper promotion over the past three years, and now that's all kind of gone to waste.

The bottom line is I want to lose as few Threadrippers as possible to a multinational.

— Randy Copeland, CEO, Velocity Micro

For CEO Wallace Santos and his company, Maingear, the Threadripper crisis pushed his company to list its high-end workstations (MSRP $9,599 to $49,999) as "out of stock" in the company's catalog since the end of 2021. Due to the lack of Threadripper processors, Maingear has been forced to sell low-end and cost-effective systems with inexpensive processors from AMD and Intel.

If I sell 10 systems that are 15 grand a pop to a single customer, that's a big purchase order. It's not a small purchase order for me. So imagine saying no to a [purchase order] with like 30, 40 systems. It's real money, and it's just a shame that it turned out this way.

— Wallace Santos, CEO, Maingear

Some system builders have also resorted to purchasing from online retailers like Amazon and NewEgg. This option for manufacturers is entirely rash, especially with specific warranties through contracts signed with companies like AMD. Also, it is difficult to sell a product when the parts are unknown in price due to fluctuations in the consumer marketplace and seedy third parties, according to Copeland.

We're not prohibited [from buying through retail], but it's not good for us to go out of the channel. Besides, how do you market a product when you have no idea what the online price may be?

The lack of AMD Threadripper processors has also caused manufacturers to shift business from AMD to Intel, such as companies like Puget Systems. This move has driven his company to move some customers towards systems offering the Intel Xeon W workstation processors.

A spokesperson from AMD has assured us that "[t]he Threadripper Pro 5000 will be available from additional partners in CY3Q22." The same spokesperson had no comment on the current issues with the supply chains.

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