Monday, November 19th 2018

Bad Times for Motherboard and GPU Makers: Oversupply and High Prices in 1H19

The "sustained chill in the crypto mining sector" is, according to Taiwan-based sources cited at DigiTimes, one of the leading reasons motherboard and graphics cards makers will face a bleak scenario in the next few months. According to those sources, other factors such as the US-China trade war doesn't help a situation on which NVIDIA new RTX family hasn't helped due to the high price of those GPUs. ASUSTeK Computer and Gigabyte Technology have seen their inventory levels drive up, "causing their revenues for the peak season to fall under expectations".

These problems now join the ones Intel is facing with its shortage of processors, and according to DigiTimes, revenue prospects for the fourth quarter are further dimmed by lingering sluggish demand from the DIY market among other things. To counteract these problems those companies could actually be could be further adversely affected: "Nvidia and Intel likely to raise their chip prices to maintain profitability", a move that could lead to a bleak profitability period starting in 2019.
Source: DigiTimes
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55 Comments on Bad Times for Motherboard and GPU Makers: Oversupply and High Prices in 1H19

#1
bug
So it's not oversupply that is expected to drive the prices up (how could it be?), it's the US-China trade war. Who came up with that tile?
Posted on Reply
#2
john_
Intel is cutting CPU shipments hurting motherboard makers.
Nvidia is overpricing RTX line having flooded the market with GTX cards, hurting motherboard makers.


Motherboard makers keep promoting Nvidia and Intel hardware anyway possible.


Let them bleed.
Posted on Reply
#3
Ferrum Master
Since when oversupply causes price hike.

Cut the crap lads. The market will react according to economic laws.
Posted on Reply
#4
Vayra86
This is basically an intricate game of 'who's willing to take the hit'.

It sure as hell ain't me. As long as the current status quo is maintained, I'm not buying a single thing. We're still paying full price for 3 year old GPU performance, DDR4 is getting old and still too expensive. There is actually not that much to upgrade to these days. You're not missing much by sitting on your old stuff for a bit longer.

Its time for the supply side to get in line and stop being greedy bastards. The whole chain, that is.
Posted on Reply
#5
intelzen
undersupply => high prices
oversupply => high prices
if so - how about we drop any BS about any status of supply (like why waste mental energy) and just raise prices, because in these oligopoly market fixing times prices can only go up anyway (at least that is what BS press releases like these try to tell us every other week).
Posted on Reply
#6
Ferrum Master
I like the fun. How mining really affected motherboard makers. Like 8 cards on one cheapest potato board.
Posted on Reply
#7
bug
Ferrum Master said:
I like the fun. How mining really affected motherboard makers. Like 8 cards on one cheapest potato board.
Maybe people tried to mine using IGPs only? :D
Posted on Reply
#8
TheinsanegamerN
Going to add onto the pile, in what bizzaro universe does higher inventory of motherboards, or high prices of GPUs, cause MOTHERBOARD prices to increase? That is not how economics works.

Also, did the writer forget about AMD? AMD's prices havent gone up, their motherboards are still sanely priced. Does this nebulous "trade war" impact somehow only affect team blue and team green, but not team red?

WCCFtech would be embarrassed by an article like this.
Posted on Reply
#9
Raunhofer
Cryptominers bought all the cards and the prices hiked, now cryptominers don't buy any cards and the prices hike. Conveniently the previous hikes won't melt in between.

It will be a crude awakening for the AIBs to one day realize that people don't actually want to pay $1000 for a mobo, no matter what's the excuse.
Posted on Reply
#10
fynxer
This is reaching a ridiculous level of stupidity.

No manufacturer wants to drop the gpu price, bean counters at these companies compare today's prices to mining high prices which is not applicable anymore.

The mining craze is over and NO the mining crazy prices is NOT the new normal.

The price today is still higher than the normal price was two years ago and they have the stomach to call today's prices a sale.

They are so cheap they cry when taking a sh!t, drop the price of graphic cards FOR REAL well under prices two years ago and see the stock vanish like magic.
Posted on Reply
#11
Upgrayedd
I thought supply and demand controlled pricing?
Posted on Reply
#12
Ferrum Master
bug said:
Maybe people tried to mine using IGPs only? :D
The most fun part, most guys reused old X79 or X99 boards as they had plenty pcie lanes with cheap 20$ ebay xeons, used any 5$ RAM.

This really is like hangover talk... Cut the darn RGB crap and save on that maybe?
Posted on Reply
#13
unikin
NGreedia strikes again. I'm seriously considering going for PS5 and PSVR2 in 2020 until PC gaming becomes more pocket friendly again.
Posted on Reply
#14
eidairaman1
The Exiled Airman
Vayra86 said:
This is basically an intricate game of 'who's willing to take the hit'.

It sure as hell ain't me. As long as the current status quo is maintained, I'm not buying a single thing. We're still paying full price for 3 year old GPU performance, DDR4 is getting old and still too expensive. There is actually not that much to upgrade to these days. You're not missing much by sitting on your old stuff for a bit longer.

Its time for the supply side to get in line and stop being greedy bastards. The whole chain, that is.
Vote with your wallet on this.
Posted on Reply
#15
unikin
Upgrayedd said:
I thought supply and demand controlled pricing?
Not in duopoly bordering on monopoly market. State regulators should intervene in such conditions but we won't see it happen. All politicians and antitrust regulators are in corp pockets nowdays. Corporations are our lords now.
Posted on Reply
#16
dmartin
bug said:
So it's not oversupply that is expected to drive the prices up (how could it be?), it's the US-China trade war. Who came up with that tile?
Yep, corrected, it was misleading.
Posted on Reply
#17
The Quim Reaper
Greed, pure and simple greed, is the cause of their problems.
Posted on Reply
#18
yakk
Intel suffering from their own-made production issues, while nvidia seemed to have substantially over estimated mining customer demand. Which is kind of funny seeing AMD demand was through the roof but they seemed to have ordered less even if they had access to potentially bigger production possibilities with multiple foundrys. Better educated guess of demand?

What a perfect storm... for intel & nvidia...

Can also see why intel motherboard makers are nervous... they'll have to be pushing Ryzen boards if intel completely faulters and can't ship anything.
Posted on Reply
#19
stimpy88
Seriously, if you have stock that people are not buying, then to help sell it all, you increase the prices? WTF?

But you've got to love the Miner BS. We are all damned if they buy stuff so that we can't buy it, and we are all damned if they don't buy it, and as a reward, the prices increase, cos, you know, there all about the Gamers, right? Has nGreedias nasty little backwards marketing department infected the rest of the industry? Are they all trying to be Apple now?

But I bet Intel and nGreedia have simply leaned on the OEMs and told them they will be punished if they sell their stuff at low prices.
Posted on Reply
#20
AnarchoPrimitiv
I'm in the process of buying parts for a new build right now (based around the Ryzen 2700x), but as I'm not rich, I have to buy them over time as the money comes in and I'm holding off for certain events like cyber Monday and even after Christmas sales....but anyway, the crazy part is that if the DIY market is seeing diminished demand right now, you would think that perhaps manufacturers and retailers would LOWER PRICES to entice sales, but instead they're considering raising prices. I've said it before and I'll say it again (and yes I know the reasons and benefits behind public investment) but I truly hate stock holders and how publicly traded companies are solely beholden to them at the expense of what's best for consumers. A publicly traded company really doesn't care about its customers, they only care about their stock holders and that's a major reason behind them doing things like raising prices to maintain profitability amidst slumping demand, or immediately firing as much of their labor force as possible at the first signs of economic stagnation or downturn rather than lowering prices to directly stimulate demand and thereby head off worsening recession. I don't know, Maybe I'm just salty because I have a hard time swallowing the idea of paying $175 for a 16GB kit of 3200Mhz RAM or that the GPU I'm aiming for (GTX 1080 or Vega 64) is more expensive than the motherboard and CPU combined......though the drop in NAND prices and being able to buy a 500GB Samsung 860 EVO for $80 is pretty nice. Where was I going with this? Oh yeah, I hate how computers are so damn expensive that you either have to be a spoiled kid on your parents dole or have computers be your sole expenditure to enjoy them (I'm not going to cease puffing and going out with women just to finish a build, but it seems like that's the type of sacrifice the PC world demands)

eidairaman1 said:
Vote with your wallet on this.
Vote with your wallet? That's the type of completely disenfranchising and disempowering mentality that got us to this place where we're completely beholden to the whims of these companies with zero recourse. Instead of thinking like consumers, let's think like citizens of a democracy and try and pass legislation enforcing price caps or a legally mandated maximum ratio of cost to profit (that'd really fix Apple's egregious level of avarice)
Posted on Reply
#21
hat
Enthusiast
I may be stupid... and I may be dumb... but I'm not both. What the hell? This makes no sense. High supply (especially "over"supply) should not equate to higher prices! Only Intel can play the "supply" card right now, because they actually (supposedly) have a shortage... and even that's still greed. Raising prices doesn't help anyone get the product, it just helps them charge more for the same number of product that exists regardless if it's $1 or $1000.

Oh well, in about 4 days we'll see an article about a shortage of these parts rather than an oversupply.
Posted on Reply
#22
phanbuey
i mean the prices will come down with oversupply even if the suppliers have to eat the loss...

And with intel's supply issues, they will lose market share since they actually have a competitor in the space. Nvidia is going to be in the same boat soon... once they realize that people aren't ready to shell out $1200 for better looking shadows and reflections.

There is only so long they can hold that hardware until it becomes completely worthless, so at some point there are going to be a boatload of cheap gpu's around.

AnarchoPrimitiv said:
Vote with your wallet? That's the type of completely disenfranchising and disempowering mentality that got us to this place where we're completely beholden to the whims of these companies with zero recourse. Instead of thinking like consumers, let's think like citizens of a democracy and try and pass legislation enforcing price caps or a legally mandated maximum ratio of cost to profit (that'd really fix Apple's egregious level of avarice)
Right? because that has worked... just the sheer amount of raw materials involved, the complexity of every single element and chip that goes into these devices means that no matter how large a government bureaucracy you have they will never come up with an appropriate/correct price cap number. Whats more economically valuable? Glass on an iphone or glass on a surgical device? And is the government going to make that choice now that they are controlling prices?

I've stood enough hours in bread lines to know that government price fixing just ends up doing the opposite of what it attempts to do.

https://www.bloomberg.com/opinion/articles/2018-01-18/yup-rent-control-does-more-harm-than-good
https://en.wikipedia.org/wiki/Economic_liberalisation_in_India
Posted on Reply
#23
Aldain
unikin said:
NGreedia strikes again. I'm seriously considering going for PS5 and PSVR2 in 2020 until PC gaming becomes more pocket friendly again.
go amd cards and ryzen.. solved
Posted on Reply
#24
Basard
AnarchoPrimitiv said:
Vote with your wallet? That's the type of completely disenfranchising and disempowering mentality that got us to this place where we're completely beholden to the whims of these companies with zero recourse. Instead of thinking like consumers, let's think like citizens of a democracy and try and pass legislation enforcing price caps or a legally mandated maximum ratio of cost to profit (that'd really fix Apple's egregious level of avarice)
LOL... And in ten years time we can all be using Commadore 64s again. What will the government use for motivation--maybe pass some laws telling everybody to innovate every two years or else you get shut down?
Posted on Reply
#25
yakk
Let's not forget the bigger artificial tariffs for U.S. also coming soon.

Just to make sure to really nail those corporate stock values...
Posted on Reply
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