Published in PC Hardware

AMD admits undershipping to keep prices high

by on02 February 2023

How very Chipzilla 

AMD has admitted that it has been “undershipping” chips to balance "supply and demand" or in non-economic terms - keep the prices up.

Su told investors that AMD had been undershipping the sell-through or consumption for the last two quarters.

“We undershipped in Q3, we undershipped in Q4. We will undership, to a lesser extent, in Q1.”

The reason for this was that as the pandemic winding down and inflation ramping up, far fewer people were buying CPUs, GPUs, and PCs. It’s a hard, sudden reverse from just months ago, when companies like Nvidia and AMD were churning out graphic cards as quickly as possible to keep up with booming demand from cryptocurrency miners and PC gamers. 

This means that old cards are still being sold at very high prices. 

To be fair, AMD is not the only one playing that game. Nvidia CFO Colette Kress told investors in November that her outfit had been undershipping to correct that inventory that is out in the channel.

Nvidia has released the $1,200 GeForce RTX 4080 and $800 RTX 4070 Ti, two overpriced graphics cards, and tried positioning them as enthusiast-grade. AMD’s $900 Radeon RX 7900 XT offers similarly disappointing value and the company recently released a blog post claiming the new GPUs as enthusiast-grade upsells.

While it is possible that as stocks dwindle prices will become more sensible, it might be a good idea to reward such underselling tactics by not buying anything from AMD and Nvidia until they stop overpricing their stock. It is a sad state of affairs when we have to look to Intel to drop the price of itsArc A750 graphics card to $250 as a good thing for gamers on a budget.


Last modified on 02 February 2023
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