Despite PC consumers having just gone through 18 months of metaphorical hell, graphics card demand might currently be at its lowest point in recent memory. With stock for both current-gen Nvidia and AMD models being pretty decent at the moment, the only real fly in the ointment is that, so far, while the stock has improved, prices haven’t fallen quite as quickly in line as they probably should. – With next-gen models from both manufacturers only 2-3 months away as well, at this point, I think people are simply holding off buying a GPU now to rather see where their money is going to be best spent in the very near future.
During the peak of demand, however, it was hardly a secret that tech firms were scrambling to secure production runs with silicon manufacturers such as TSMC. – It seems, however, that following a report via Videocardz, many of them are now more than a little worried that based on the rush to get their orders in the queue, subsequent events have now potentially seen them massively overestimate just how much they’re actually going to need!
Nvidia Worried it Might Have Over-Ordered 40XX Chipsets?
According to the source, Apple, and AMD have already modified their chipset orders with TSMC to request fewer than originally requested. While we’ll get onto why they’ve done this shortly, the problem Nvidia has is that they effectively paid a premium figure last year to jump the queue and secure a very specific number of shipments.
Based on current projections and an overall market downturn, however, it seems that Nvidia is now worried it not only has more than it needs, but more so, they face the almost guaranteed problem that TSMC is probably going to tell them ‘You over-ordered? Well, sucks to be you. Here are your chipsets!’.
Yes, as crazy as it might sound, it would appear that Nvidia thinks it may be able to make more 40XX graphics cards than we consumers actually need!
Why Is Demand Down So Much?
Although citing a general consumer downturn, I think you have to consider the overall environment when Nvidia originally placed the order. Specifically, in regards to graphics cards, chipset demand was huge at the time as both AMD and Nvidia scrambled to get as many GPUs manufactured as they could. The cynical view though is that while we PC gamers were clearly an intended market, cryptocurrency operations were also at their peak demand.
With the price of Bitcoin dropping over 60% since last November, however, the landscape in this regard, and specifically so in regards to orders coming from industrial-scale mining operations, hasn’t so much dropped as fallen off a cliff! – Put simply, it’s entirely possible (if not probable) that Nvidia’s stock request with TSMC at the time was almost entirely based on the continued projected growth of cryptocurrency orders.
With that particular demand being non-existent at the moment, however, and with no signs of it looking to set improve for at least another 4-6 months, it appears ultimately that Nvidia completely misread just how quickly crypto can change and it might be coming to back to bite them in the backside!
Why is this good for us though? Well, if they have too many chipsets, they’re going to be making ‘too many’ graphics cards. I mean, it’s not as if they can do anything else with them is it? – If this happens though, fingers crossed, we might actually start seeing some exceptionally competitive (if not aggressive) retail MSRP strategies and not to mention that with the 40XX expected to launch this September, we might actually see masses of stock at reasonable prices!
What do you think? – Let us know in the comments!