If you’re like your humble author, you’ve been looking at the stuttering PC market and wondering when you’ll see a ton of cheap hardware for sale. We know that crypto mining is essentially dead, and it seems like every day, we hear about another round of massive layoffs at a tech company. Intel just posted brutal quarterly earnings, and on the heels of that announcement, AMD posted its own results. Although it has largely weathered the storm that damaged Intel’s earnings thanks to its data center and embedded products, AMD CEO Dr. Lisa Su also admitted it’s been limiting the supply of its products. This would help explain why GPU and CPU prices remain high despite lackluster sales figures.
The somewhat startling admission came during the company’s quarterly earnings call. AMD is doing quite well despite the industry downturn. It reported 42% year-over-year growth in its data center products. Intel reported a drop of 33% YoY for its data center chips, so the contrast is remarkable. For client PC and gaming, however, AMD is also feeling some pain. It reported a 51% decline YoY in processor shipments. This led to a loss of $152 million compared with a profit of $530 million a year ago, according to Yahoo.
Discrete Desktop GPU shipments are at historic lows. (Image: JPR/Tom’s Hardware)
But even though AMD’s consumer and gaming revenues are tanking, it’s still found a way to keep the numbers up through that old chestnut: supply and demand. According to remarks noted by PCGamer, Dr. Su says it’s been limiting supply and will continue to do so. “We have been undershipping the sell-through or consumption for the last two quarters,” said AMD’s CEO. “We undershipped in Q3, we undershipped in Q4. We will undership, to a lesser extent, in Q1.”
It’s an interesting admission that explains why CPU and GPU prices haven’t crashed along with the PC market. It makes us wonder if Nvidia is doing something similar. Although some decent deals on GPUs appeared a few months ago before AMD and Nvidia launched new architectures, those deals have now vanished.
Instead of it being a buyer’s market, prices are still surprisingly high given the low demand for GPUs and CPUs currently. Both companies have also launched new products that are more expensive than their previous-gen products, despite the current economic situation. This seems to imply hardware prices will never “return to normal” in the future. Instead, this is the new normal.
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