Shortages on the latest technology released by Nvidia and AMD continue to plague the consumer market, but these shortages are not only affecting the consumer market. Many would assume that the prebuilt sector would be faring better than the consumer market with its ability to directly negotiate with manufacturers, but it is quite the contrary, they are struggling as well. Even at the highest level, industrial clients of Nvidia are struggling to get their hands on the A100 GPUs. The shortages stretch across multiple platforms all on the newest silicon. Ampere, Vermeer, and Big Navi (RDNA2) based products are all facing shortages and all sectors of the market are feeling the effects.
Ampere, Vermeer, And Big Navi All Facing Prices 20% To 80% Above MSRP Due To Shortage - Scalpers Are Making Millions In Profit On Website Like eBay, StockX, And More
At the consumer level, people are struggling to build systems using the latest platforms from AMD and Nvidia. All of the Ampere cards are either sitting happily in the few systems of gamers, on sale on websites like eBay, or even StockX with an enormous resale price. Some are mad that Nvidia has sold a huge amount of Ampere cards to crypto miners.
The fact that StockX which is primarily a reselling platform for goods like shoes and streetwear has shifted gears and is now selling hardware items should be a red flag. The market is so inflated that companies are coming from outside are seeing an opportunity and taking advantage of it. This doesn't only apply to Ampere GPUs, this also applies to AMD's Vermeer and Big Navi products.
According to Michael Driscoll on DEV, the prices on all of the latest releases featuring either Nvidia or AMD parts have skyrocketed. For the Ampere series cards, the resale price is sitting between 40% to 80% above the MSRP depending on the card. For Big Navi, the resale is setting between 50% and 75% over the MSRP depending on the card. For Vermeer (Zen 3), the resale value is the least inflated sitting 20% to 60% over the MSRP depending on the processor.
Along with the percentage values, Michael Driscoll included the total sales in dollars, the amount sold, and the total profit scalpers made. The RTX 3080 has been the biggest seller by far with around $5.2 million of profit and 7222 individual cards sold. The RTX 3090 and 3070 trail closely behind. The RTX 3090 has $3 million in profit and 3749 sold while the RTX 3070 has sold more at 4141, but only has profited $1.25 million. Another alarming sign is the shortage of Big Navi cards being sold, only 454 being sold meaning there are very few available. For scalpers, the current time is a dream for them making lots amount of money off of resold hardware. For more detailed information, check out Michael Driscoll's study.
Smaller OEMs Are Having To Pay Higher Prices On Components To Meet The 300% To 400% Increase In Orders Of Prebuilt Systems
The prebuilt market has always been seen as a pretty consistent market and seems to face fewer issues with the supply than the consumer market. People see that they have the ability to negotiate with manufacturers to get a better price and have more stock available to them. That may be the case most times, but it certainly isn't now. In a recent article by Gordon Mah Ung on PC World, he reached out to prebuilt vendors and was able to gather some information. One thing to note, Gordon Mah Ung mostly spoke to smaller vendors and none of the caliber of Dell or HP.
The consistent trend amongst the vendor is the lack of a consistent stream of graphics cards. One even expressed that they were at the point where negotiation was not an option. They are now forced to pay the inflated price for the mainstream cards. Most said that Nvidia’s GeForce RTX 3080 and RTX 3090 were the most difficult to obtain of the 30-series cards. There is some promise in the RTX cards because some vendors reported that they are receiving cards on time even if they are low in stock and at an inflated price point.
A theory that some vendors share is that since they are lower on the totem pole, they get the leftover cards. They believe that larger OEMs are receiving preferential treatment based on their ability to make and sell larger quantities of prebuilt systems. Although I feel bad for the smaller vendors, the preferential treatment is a totally valid strategy for Nvidia because, at the end of the day, larger OEMs will do more for their bottom line than smaller ones.
It's an entirely different story with systems using components from AMD. AMD has fared the worst for OEMs with a huge shortage of AMD processors and graphics cards. As shown in the quantity of each component resold, AMD's stock is extremely, to the point where it is not viable making prebuilt systems with Zen 3 and Big Navi. Many smaller OEMs tend to share that view and have shifted to using older Ryzen 3000 series processors. This has put a strain on the supply of Ryzen 3000 series processors, and those have also experienced a jump in price with a Ryzen 5 3600XT with a list price of $599 which $50 more than the MSRP of the Ryzen 9 5900X.
Fear not, Intel is not facing the same supply issue which is quite surprising to see as was facing shortages for the most part of 2019. After facing the supply issues in 2019, Intel has improved its production and has created a strong supply chain. Intel also has access to its own fabs while AMD and Nvidia are relying heavily on TSMC. Another sigh of relief is the laptop market. The laptop market is currently doing well and not facing a shortage.
On top of the shortages, vendors have reported that the market for prebuilt systems is facing more demand. They have reported that orders for desktop systems are up by up to 400% with some vendors. AMD is still growing, being on track to increase revenue by $1 billion, but that money is being earned elsewhere meaning that the GPUs and CPUs are going places other than the consumers and OEMs. Most remain optimistic and one even said that they would rather have demand outpace supply than supply outpaces demand, but 2021 is looking bleak with many predicting shortages to continue through the end of the year.
Nvidia's A100 GPU Is In High Demand And Extremely Low Stock - VP Expects All Orders To Take Several Months To Fulfill
On top of Nvidia struggling to deliver adequately priced Ampere cards for the consumer and OEM sector of the market, Nvidia's data center solutions are also suffering from the same issues with a lack of supply. Specifically, the A100 GPU is based on the Ampere, and data centers, scientists, and the HPC community have expressed a need for more of these. Everyone wants to have some, but very few actually have it. Nvidia's latest conference with Wells Fargo showed the lack of supply and the slow process to get more.
Your average consumer may take it at face value and be like, they already have a previous generation card that still performs well and the new one costs $15,000+. What a large scale company sees is much different. The benefits outweigh the cost of the card and the benefits they reap in the performance boost increase their profits and can actually help average consumers indirectly by lowering operating costs and more.
Most professionals see the A100 as the new universal standard because it is a GPU that supports a host of new instructions and formats for various compute workloads. The actual silicon is made by TSMC which is already overloaded with demand for consumer-level Ampere, Vermeer, and Big Navi. On top of being overloaded, the chip itself is one of the biggest made by TSMC and the yields aren't as great with the increased size of the die. The A100 also uses a crazy amount of HBM2 with 40GB on each card.
The A100 is a tool that is extremely flexible and that many want and some even need to perform tasks that are critical to the success of their business. The A100 GPU performs 20 times better in some cases and performs better in every category. There really isn't a surprise why everyone wants one and why the supply is low. Nvidia has admitted it may take several months to be able to fulfill all orders and requests for the A100.
Overall, AMD and Nvidia shortages are affecting all sectors of the market including consumers, OEMs, and enterprise solutions. Scalpers are ruling the consumer market with resale prices on Ampere, Vermeer, and Big Navi (RDNA2) products having an average increase in price ranging from 20% to 80%. The shortage has plagued AMD the most, but they are still on track to gain $1 billion in revenue and Nvidia is still the market leader for graphics cards. Intel is the only one not suffering from shortages.