NVIDIA And AMD GPU Supply Will Remain Grim In Q1 2021

It seems that now is a good time to remind everyone that both AMD and NVIDIA are expecting further delays in GPU availability throughout Q1 2020 (via Videocardz). A lot of this has to do with a shortage of materials as well as the impact of COVID as a pandemic but there remains a very large number of variables at play here.

NVIDIA And AMD GPU Availability Will Not Improve Significantly In Q1 2021

TSMC remains a core bottleneck for GPU production as Samsung has yet to pick up in yields and it really does not help that ETH mining has made a full comeback. Till Ethereium switches to Proof of Stake (which would be sometime this year), you can expect miners to keep gobbling up boatloads of GPUs out of what is available and driving prices up in this scarce supply scenario.

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AMD had the following to say about the shortage:

We knew about the expiration of some tariff policies, and in advance worked towards a more flexible supply chain as it relates to AMD. We are committed to keeping GPU pricing as close to our suggested retail pricing as much as possible, because it’s the only way to be fair to the users.

Normally when we have GPU launches, our own branded cards are available initially but then fade away for our partners to pick up. This time around we’re not phasing out our RX 6000 series, enabling us to sell direct to customers as low as possible. We’re encouraging partners to do the same. Not only tariffs, but the COVID environment has increased shipping and freight costs, which are hard to avoid. As we get into a more normal environment, this should improve. This also matters for our planned graphics updates through the first half of the year, as we have a lot of product coming to market.

— AMD CEO Dr. Lisa Su to AnandTech

On the plus side, AMD tells The Verge it expects to sell more of its own reference design RX 6800, 6800 XT and RX 6900 XT cards on its own website in the first quarter of 2021 at their sticker prices, which should mean $579, $649 and $999 instead of inflated ones. But AMD is only committing to make them available “to as many gamers as possible,” which may not reassure buyers who felt AMD had a paper launch to begin with.

— Sean Hollister, The Verge

According to NVIDIA CFO Colette Kress, the company is experiencing supply constraints which make them unable to meet demand through Q4 2020. This not only includes wafers and silicon but also substrate and components. This means that gamers will not be able to buy anything at affordable rates throughout 2020 and likely through the first quarter of 2021.

Considering global efforts to distribute the COVID vaccine will start in 2021, it is also possible that global shipments will be disrupted even further as the vast bulk of vaccines is moved which would mean that gamers might not see prices normalize until late 2021. Of course, this also does not include the effect of cryptocurrency mining as ETH has already breached the $600 mark and mining is profitable once more.

"We do have supply constraints and our supply constraints do expand past what we are seeing in terms of wafers and silicon, but yes some constrains are in substrates and components," said Colette Kress, CFO of Nvidia, at Credit Suisse 24th Annual Technology Conference. "We continue to work during the quarter on our supply and we believe though that demand will probably exceed supply in Q4 for overall gaming."

Of course, even if the supply constraint was solved right now, it would take a couple of months for the production and supply channels to catch up with demand.

"We do expect it probably to take a couple months for it to catch up to demand, but at this time, it is really difficult for us to quantify," said Kress. "So, we stay focused on trying to get our parts to the market for this very important holiday season. Each day things continue to improve. But before the end of the quarter, we will be able to provide some more information."

I personally believe [caution: opinion] that we are not going to see prices stabilize until March 2021 at the earliest. This is because a big part of the problem is the supply constrain at TSMC and until capacity expands there, there are simply too many mouths to feed for the pure-play foundry. NVIDIA's partnership with Samsung to solve this exact problem also does not seem to be yielding the result they wanted. [/opinion].

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