AMD has been undershipping GPUs/CPUs while keeping prices high

AMD has been playing a supply and demand game.

This might be why Radeon and Ryzen prices have been relatively high in late 2022. AMD CEO admitted during the latest earning call with investors and analysts that the company has been restraining chip supply for two consecutive quarters. Furthermore, the company will continue to undership in Q1 to a ‘lesser extent’:

We do believe the first quarter is the bottom for our PC market — for our PC business, and we’ll see some growth in the second quarter and then a seasonally higher second half. In terms of the under shipment, I mean, I think we’re — we undershipped in Q3, we undershipped in Q4.

We will undership, to a lesser extent, in Q1. So I think you can infer that from our guidance single-digit down. And then, we’ll be back to a more normal environment. Now, just as a reminder though, the first half is not usually a — the first half is usually a seasonally weak client time anyways.

— Dr. Lisa Su, AMD CEO

AMD expects this quarter to be the ‘bottom’ in terms of sales, as the market had slowed down a lot for chipmakers and PC business in general. This is despite AMD releasing new desktop CPU and GPU architectures and just weeks away from shipping its new mobile platform.

Despite undershipping, AMD was forced to lower the price of their GPUs and CPUs massively in the last 2 quarters. In fact, even the Ryzen 7000 series were heavily discounted after just 6 weeks of reaching the market, by up to 20%.

Yesterday AMD announced Ryzen 7000X3D series will launch in late February with the flagship model costing $699. This was the launch price of the Ryzen 9 7950X processor which is now selling below $600. By choosing this price, AMD understands 7950X is likely never to return to its original price.

Source: MSN