NVIDIA discussion [2024]

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I'm not referring to chip production yields per wafer.. I'm referring to Nvidia's ability to sell it's AI GPUs for much higher prices than consumer gaming GPUs.
So what you're saying is that since Nvidia can make say 10B USD on AI "GPUs" they see no point in making another 1B on gaming GPUs because... why exactly?
What you're describing couldn't be further from how businesses operate in reality.

The semiconductor manufactures know which is more important to them. As demand scales up, so too will other aspects of the market to facilitate it. They're making far more money off those 2 to 3 million AI GPUs per year than they are their 40m gaming GPUs. GPU sales have been decreasing year after year.. and sales are trending downwards.
Semi manufacturers will shift and change their capacities according to demand just like every other part of the production chain does. The only way they will stop making gaming GPUs is if there would be no demand for that from chip designer companies and the only way this would happen is if there would be no demand for GPUs from consumer market i.e. gamers. Considering that we see Intel stepping into dGPUs again what we actually see is likely the opposite of that.

Sales go down
You've repeated that statement several times now. Care to provide any data which actually show that "sales go down"? Recent Nvidia's financial reports show the opposite for their gaming segment.

I've said before that they will slowly price people out of the gaming GPU market..
Why?

their console GPUs are basically their mobile GPUs repurposed
They don't have any mobile GPUs. Your explanation on why Nvidia is present in other segments doesn't hold any water because it's been less than two years since people like you were using the exact same reasoning to explain tensor h/w in Nvidia GPUs.
 
Not following. If they price people out who will be buying those gaming GPUs?
Less and less people each year... resulting in less of them being produced... resulting in increased focus on other markets which can pay exorbitant prices.

They're pricing the average gamer out of PC gaming. PC gamers who don't want to own the bottom of the barrel offering simply because that's all they can afford. Might as well just buy a cheaper console at that point.
 
Less and less people each year... resulting in less of them being produced... resulting in increased focus on other markets which can pay exorbitant prices.

Why can’t they do both? It’s not like they can pour infinite money and people into only high margin products. They will make money in multiple markets just like nearly every technology company.

They're pricing the average gamer out of PC gaming. PC gamers who don't want to own the bottom of the barrel offering simply because that's all they can afford. Might as well just buy a cheaper console at that point.

Why would Nvidia intentionally shrink gaming revenue and profits for no reason? I think people underestimate how much the average gamer is willing to spend. GPUs are peanuts compared to other things people blow money on. Just check the OLED crowd who salivate at throwing $2000 at incremental TV upgrades.
 
again.. where the hell are you getting this idea that I've said gaming GPUs are going to stop?
Ok I might have had the wrong impression from your post. You said many things.

But still, pricing people out will mean decrease in production and the gradual withdrawal from the market. Which isn't financially valid. Why would they do that when they can sell all chips? Expensive GPUs to AI people and cheap GPUs to gamers and make profits on both?

I've said before that they will slowly price people out of the gaming GPU market.. and they will
This statement doesn't align well with their current business practices, they just released the Super refresh for adjusted perf/$, even though they don't financially need to.

or drastically reducing their consumer GPU output
Why would TSMC even do that? They are in the business of accepting all orders from everyone, they build and expand fabs everywhere to able satisfy demands for more chips, TSMC will never pressure any company to reduce their output of anykind. On contrary.
 
Nobody is "pricing anyone out". Current day GPU prices are about the same as they were for the last 10 years. Perf/price gains are slowing down because of production reality which doesn't provide nearly as much of an improvement in the same timeframe but we're still looking at perf/price gains - at the same price. The fact that there are more expensive product tiers now than there were 10 years ago means nothing. No one is forcing anyone to buy a 4090.

And that's even omitting the whole fact of 40 Super actually putting the down pricing pressure on the market just three months ago. I.e. doing the exact opposite.
 
So what you're saying is that since Nvidia can make say 10B USD on AI "GPUs" they see no point in making another 1B on gaming GPUs because... why exactly?
What you're describing couldn't be further from how businesses operate in reality.
No, I'm saying that companies like TSMC will take advantage of how extremely reliant they are and costs will go up, whether Nvidia likes it or not. At that point, Nvidia will need to raise prices if they want to continue making money off gaming GPUs. At that point sales will drop.. more and more.. until average people can't afford it.

Semi manufacturers will shift and change their capacities according to demand just like every other part of the production chain does. The only way they will stop making gaming GPUs is if there would be no demand for that from chip designer companies and the only way this would happen is if there would be no demand for GPUs from consumer market i.e. gamers. Considering that we see Intel stepping into dGPUs again what we actually see is likely the opposite of that.

Yes, they will shift and change their capacities to demand.... that's exactly the point. Less and less of a priority on gaming GPUs. Costs go up.
You've repeated that statement several times now. Care to provide any data which actually show that "sales go down"? Recent Nvidia's financial reports show the opposite for their gaming segment.

Sure.
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Because the more pressure put on the semiconductor industry will result in increased costs to produce gaming GPUs. Less priority priority from Nvidia. Nvidia are greedy... just like any company at the top of its game. They'll push the limits with what they can charge.. since they will no longer be dependent on gaming GPU sales.. They'll absorb it because they'll be making more money per gaming GPU sold. Their numbers wont paint the picture of what the increase in price is actually doing to the PC gaming market. This isn't just the effects it has on Nvidia's bottom line... it's the effect it will have on the PC gaming market.

They don't have any mobile GPUs. Your explanation on why Nvidia is present in other segments doesn't hold any water because it's been less than two years since people like you were using the exact same reasoning to explain tensor h/w in Nvidia GPUs.

Not even sure what you're trying to say here. How does Nvidia "being present" in those markets translate to Nvidia being GOOD for those markets? This is the problem. I never said Nvidia would just up and leave the market... I said this AI shit is creating the conditions to which the gaming market will no longer be able to afford Nvidia. There's a difference there...
 
No, I'm saying that companies like TSMC will take advantage of how extremely reliant they are and costs will go up, whether Nvidia likes it or not.
TSMC costs are going up regardless of what Nvidia does or if it even exists. This isn't in any way related to AI demand.

At that point, Nvidia will need to raise prices if they want to continue making money off gaming GPUs.
Nvidia has essentially never "raised prices" on their GPUs and I don't see why that would change. For this to happen some product must be on the market long enough to be affected by inflation while simultaneously somehow being not affected by production improvements (even the newest processes become cheaper with time) and not having any competition which would prevent such price change.

When people say that "Nvidia raised prices" what they really mean is that they arbitrary take two different products from Nvidia made some years apart on completely different production lines and likely even on a different architecture and then compare their prices based on the fact that both of these products have "8s" in their names. Or "7s". Which is a completely pointless comparison no one should be making ever.

What you're suggesting is that Nvidia would stop selling new GPUs (as in some future products; 50 or 60 series) in a lower pricing range where they sell them now. This isn't really "raising prices" because this alone doesn't mean that perf/price will actually degrade in future products because of that but even if we entertain such idea as a possibility the only valid reason why it could happen would be monetary inflation compensation - i.e. something which isn't related to Nvidia or TSMC or anyone in the business. A 3080 sold at $600 in 2020 should cost $724 now to provide the same profit margin due to US inflation alone. A 3060 sold in 2021 at $330 should be $380 now. Adjusted for inflation a 4060 sold at $300 in 2024 would've cost $260 in 2021, this is pretty much the price of 3050 back then.

I can't think of other reasons why lower end pricing range would become unnecessary. Sure there are some fast iGPUs incoming but even with that the need for a small GeForce will remain for some time as people may actually prefer Nvidia to other IHVs - or even prefer dGPUs regardless of how fast an iGPU may be in some APU. The only way Nvidia would leave that pricing segment is if there wouldn't be any demand for discrete videocards at that price point.

Yes, they will shift and change their capacities to demand.... that's exactly the point. Less and less of a priority on gaming GPUs. Costs go up.
TSMC doesn't make any distinction between gaming or non-gaming chips on its lines. The only distinction which they care about is how complex these chips are which in turn determines how much they cost in production.

22Q4/23Q1 is "crypto hangover", the peak before that is driven by mining demand (just as 17Q3-19Q2 period).
If you adjust for that you'll notice that the sales are basically at the same level - which is what more recent Nvidia financials suggest as well.

Because the more pressure put on the semiconductor industry will result in increased costs to produce gaming GPUs.
No it won't. Gaming GPUs aren't being produced on the same scale or even same factories. You may just as well suggest that AI h/w demand will prevent production of all other chips on the planet - this would be just as weird of a suggestion.

They'll push the limits with what they can charge.. since they will no longer be dependent on gaming GPU sales.
You don't "push the limits of what you can charge" if you're "greedy". You take control of the market and get profits from savings on scale of production. What you suggest is essentially stupid business decision which would simply kill off your business and leave you without one. Nvidia is not stupid.

Not even sure what you're trying to say here. How does Nvidia "being present" in those markets translate to Nvidia being GOOD for those markets? This is the problem. I never said Nvidia would just up and leave the market... I said this AI shit is creating the conditions to which the gaming market will no longer be able to afford Nvidia. There's a difference there...
How does a company being "good" for a market? That makes zero sense. A company is making a product for some market with the intent of making a profit from selling this product. This is the only thing a company does on a market and there are no "good" or "bad". If a company suddenly decides to sell their products at X2/3/5/10 of their previous prices on the same market for no reason it loses the market because either all sales go to competition or sales just stop as the market has a size and that size is generally finite. If you're selling 10 GPUs for $100 and then suddenly the same GPU starts to cost $1000 you're now selling 1 GPU - and your competition takes 90% of your market. Market, how does it work.

Anyway. What you're suggesting won't happen. AI h/w demand won't (doesn't actually, we're living in this moment for a year now) affect gaming market - or Nvidia products retail pricing. These markets are not at all connected (mining was which is why it was a big problem which Nvidia tried to fight with LHR GPUs btw which is the opposite of what you're suggesting they'd do now), neither in consumer space nor in production one. Next generation prices may "rise" but only to cover the gains in USD inflation we've got since COVID. They will remain similar otherwise and we'll see if anyone but Nvidia will be able to dictate prices in the coming launches. Hasn't really been the case since uh I dunno RV770 vs GT200?
 
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I'm not going to keep going back and forth. I'll simply return to this thread and quote myself in the not too distant future. :)
 
This chart is showing the effect of crypto bubbles, increased demand during the bubble causing a spike, then a slump after the bubble pops, then a return to normalcy. There is also the effect of COVID.

Here are the latest results from Q4 2023, showing return to normal demand.

  • Total AIB shipments increased by 32% this quarter from last year to 9.5 million units and were up from 8.9 million units last quarter.

No, I'm saying that companies like TSMC will take advantage of how extremely reliant they are and costs will go up
Again, that's not how TSMC operates, producing AI chips is less than 10% of TSMC capacity, the financials of TSMC hasn't been as rosy as NVIDIA for this reason. While NVIDIA is making a killing in profits, TSMC barely increased profits as AI chips partially compensates for the drop in revenue due to the drop of demand on other chips following the crypto/covid hangover.

TSMC wants demand for other chips to skyrocket, because that's their bread and butter. If TSMC relies on production of AI chips alone they would close shop tomorrow.

However, TSMC earnings fell 24% year over year while sales dropped 10%.

TSMC's results marked its third straight quarter of declining sales and earnings as its customers navigate a downturn in chip demand.

 
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This chart is showing the effect of crypto bubbles, increased demand during the bubble causing a spike, then a slump after the bubble pops, then a return to normalcy. There is also the effect of COVID.

Here are the latest results from Q4 2023, showing return to normal demand.

  • Total AIB shipments increased by 32% this quarter from last year to 9.5 million units and were up from 8.9 million units last quarter.


Again, that's not how TSMC operates, producing AI chips is less than 10% of TSMC capacity, the financials of TSMC hasn't been as rosy as NVIDIA for this reason. While NVIDIA is making a killing in profits, TSMC barely increased profits as AI chips partially compensates for the drop in revenue due to the drop of demand on other chips following the crypto/covid hangover.

TSMC wants demand for other chips to skyrocket, because that's their bread and butter. If TSMC relies on production of AI chips alone they would close shop tomorrow.
That only shows back to 2020... Let's look further back than even 2014, which I posted before...

dgpuship.png





And again.. you're going to quickly see how what is 10% of TSMC's capacity now... explodes in the very near future. You're basing your assumptions off of how the market is right now, but missing how these companies are going to change their business to accommodate the much more lucrative markets.
 
I'm not going to keep going back and forth. I'll simply return to this thread and quote myself in the not too distant future. :)
Several people are trying to explain to you that your line of thought is flawed on a multitude of levels but sure let's wait and see how Nvidia will launch 50 series in the exact same $$150-2000 pricing range and what perf/price gains it will have at each pricing point.

One last thing for you to ponder about: if the situation is so grim that there is no way but to "raise the prices" then why not just continue selling the old product at the same price for as long as it will take for everything to fall into place to provide a solid perf/price gain? Any AI h/w stops Nvidia from producing these 3050s now and in the future?
 
Several people are trying to explain to you that your line of thought is flawed on a multitude of levels but sure let's wait and see how Nvidia will launch 50 series in the exact same $$150-2000 pricing range and what perf/price gains it will have at each pricing point.

One last thing for you to ponder about: if the situation is so grim that there is no way but to "raise the prices" then why not just continue selling the old product at the same price for as long as it will take for everything to fall into place to provide a solid perf/price gain? Any AI h/w stops Nvidia from producing these 3050s now and in the future?
Yes, we will wait and see.

Because sales will fall off.. and that opens a window for their competitors to gain ground.
 
And again.. you're going to quickly see how what is 10% of TSMC's capacity now... explodes in the very near future. You're basing your assumptions off of how the market is right now, but missing how these companies are going to change their business to accommodate the much more lucrative markets.
They are not going to change anything, companies like TSMC and Samsung are not agile as you think, they rely on fabs and complicated machinery from other companies (such as ASML) to do their business, these facilities and equipment take years to build and set up, and right now they are set up to make revenue from normal PC and mobile chips, AI chips are a rounding error for them. Which is why TSMC and Samsung continue to struggle to this day.

In Q4, TSMC reported revenue slipped 1.5% from a year ago, while net income dropped 19.3% from a year ago

Chipmakers such as Samsung Electronics and SK Hynix have reported declines in quarterly profits due to a post-pandemic plunge in the demand for consumer electronics like smartphones and laptops. That resulted in smartphone and PC makers grappling with excess inventories of chips

 
Because sales will fall off.. and that opens a window for their competitors to gain ground.

Well this line of reasoning makes even less sense to me. Why would only Nvidia’s sales fall in the consumer graphics market when AMD and Intel are just as eager to make bank on AI.

You keep saying sales will fall because (only) Nvidia will arbitrarily raise prices but not explaining how that will help their bottom line.
 
Well this line of reasoning makes even less sense to me. Why would only Nvidia’s sales fall in the consumer graphics market when AMD and Intel are just as eager to make bank on AI.
AMD and Intel want to profit off of AI too but given their minor market share over there they aren't as pressured to allocate wafers for it like Nvidia ...
You keep saying sales will fall because (only) Nvidia will arbitrarily raise prices but not explaining how that will help their bottom line.
Prices could potentially rise because Nvidia may pullback on producing GPUs since there's far higher returns on producing AI accelerators. Fewer wafers allocated for graphics hardware production just means lower supplies, driving prices even higher ...
 
AMD and Intel want to profit off of AI too but given their minor market share over there they aren't as pressured to allocate wafers for it like Nvidia ...
Wafers aren't the liming factor for NV, it's all 2.5D substrate capacity limitation.
Fewer wafers allocated for graphics hardware production just means lower supplies, driving prices even higher ...
Wafers are NOT the liming factor. stop.
 
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