Tsing

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Image: NVIDIA



NVIDIA’s latest generation of gaming-oriented graphics cards, the Ampere-based GeForce RTX 30 Series, has resulted in the company’s most impressive launch ever. This is according to green team’s new GTC Spring 2021 Investor Day slide deck, which includes various charts demonstrating how quickly users embraced the Ampere architecture in comparison to older technologies such as Turing (GeForce RTX 20 Series) and Pascal (GeForce GTX 10 Series). Unfortunately, NVIDIA’s GeForce RTX 30 Series products continue to be very difficult to find due to high demand amid component shortages—as suggested by EVP and CFO Colette Kress in a recent webcast, gamers will probably have a tough time finding one throughout the year...
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Brian_B

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They are spinning that mining bubble again... Surprising the investors keep taking it at face value.
 

Grimlakin

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Of course it's the most successful. They charged what they wanted and EVERY chip sold. Nothing stayed on a shelf. When your problem is your product can't be made fast enough to satisfy demand it doesn't matter why.

And really lets face facts here. As much as it sucks this Mining boom is looking less and less like a bubble and more like a cycle. As long as these cards make Hash rates faster and faster, they will sell as long as making hash rates = more money in than money out.

For a business it's a simple equation. X card/infrastructure cost, Y cost of cooling and maintenance, Z Cost of Staff. Total these. If these equate to less than the value of the generated Hash... It's profitable. The only gamble is can you generate enough hash to cash out on it before the Hash rate/value to cost flips. Once that happens as long as you had consumer cards you can recoup the costs, if you don't have a business reason to keep them.

Lets say you have a computer room with a few racks sitting basically empty. How much will it cost to fill those racks with Compute and many many video cards to crank out hash? Then once you're done with the profit cycle and paying for the hardware you can even gift those cards to your employees who will love it as a 'bonus'. Especially if your company is tech based.

I would be SURPRISED if someone like Epic doesn't have a few racks generating hash that they cash in to cover costs and make a bit of money. If I can fill half my datacenter with Mining hardware, and establish a way to cash it out where it pays for the rest of my datacenter... why wouldn't I?

The place you can't do this is in the cloud.

(actually the questionable nature of Bitcoins and 'mining' would prevent most companies from doing this. Especially since they have to declare the Capital Expenditure on 'mining'.)
 

Uvilla

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No bubble? I ain't so sure, this is looking like a pre collapse bubble its so big. And I mean finance system collapse.
 

LazyGamer

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No bubble? I ain't so sure, this is looking like a pre collapse bubble its so big. And I mean finance system collapse.
That's fairly separate from GPUs though, no?

And honestly it's not terribly easy to predict how this stuff will pan out, even if we know it's coming (and as most things in human existence are sinusoidal, it's always 'coming').
 

Brian_B

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That's fairly separate from GPUs though, no?
Hmm. Not entirely.

Inflated Crypto prices lead to more people mining, which leads to GPU shortages.

So there is a link.

I think Ethereum going to Proof of Stake will help a lot, of that ever happens. The financial world is more or less focused on Bitcoin, but the miners all seem to be focused on mining Eth (and getting paid out in BC - not sure how that economy is working out). But even with that, there isn't really anything stopping another Currency from popping up that can be mined at home.

As far as it being a cycle... perhaps.

Most Currencies are designed to get more difficult to mine as they age as a method to combat inflation. So there is a tipping point where the maturity, and hence the computational difficulty, crosses the axis of energy efficiency of current technology. That's where we see a shift from home GPUs to something like ASICs or large industrial scale operations that can leverage economies of scale. Then some new currency pops up and we start the wave all over again -- the first wave was Bitcoin, this wave seems to be Ethereum.

There isn't really anything from stopping a third wave once Ethereum crosses that threshold, apart from governments or financial institutions straight out barring it or taxing it to death - it just takes convincing the market that it's worth something. If the value of Crypto alone in't enough, NFTs certainly point to the market's common sense level, and we are all in very deep trouble.
 

Endgame

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Of course it's the most successful. They charged what they wanted and EVERY chip sold. Nothing stayed on a shelf. When your problem is your product can't be made fast enough to satisfy demand it doesn't matter why.

And really lets face facts here. As much as it sucks this Mining boom is looking less and less like a bubble and more like a cycle. As long as these cards make Hash rates faster and faster, they will sell as long as making hash rates = more money in than money out.

For a business it's a simple equation. X card/infrastructure cost, Y cost of cooling and maintenance, Z Cost of Staff. Total these. If these equate to less than the value of the generated Hash... It's profitable. The only gamble is can you generate enough hash to cash out on it before the Hash rate/value to cost flips. Once that happens as long as you had consumer cards you can recoup the costs, if you don't have a business reason to keep them.

Lets say you have a computer room with a few racks sitting basically empty. How much will it cost to fill those racks with Compute and many many video cards to crank out hash? Then once you're done with the profit cycle and paying for the hardware you can even gift those cards to your employees who will love it as a 'bonus'. Especially if your company is tech based.

I would be SURPRISED if someone like Epic doesn't have a few racks generating hash that they cash in to cover costs and make a bit of money. If I can fill half my datacenter with Mining hardware, and establish a way to cash it out where it pays for the rest of my datacenter... why wouldn't I?

The place you can't do this is in the cloud.

(actually the questionable nature of Bitcoins and 'mining' would prevent most companies from doing this. Especially since they have to declare the Capital Expenditure on 'mining'.)
This is a good example of why Nvidia needs to figure out how to prevent mining on gaming cards.

1) given the miners cost benefit analysis, Nvidia could be making more money per unit on mining cards, as the purchasers don’t care as long as the equation holds up. 2k for a mining 3080? Who cares if it’s profitable for mining. During mining booms, Nvidia could switch production to mining cards and triple their revenue.

2) Currently, when the coin market crashes, used video cards flood the market, damaging sales until the next mining boom. If those left over cards couldn’t be used for games, nvidia could just switch production to the lower profit gaming cards and not have such a huge sales slump.
 

Brian_B

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I was thinking more along the lines of a 'market crash', like, all the markets, as hinted by @Uvilla above. Totally agree that the mining market affects GPU prices and availability!
Good point. Thanks.

Thinking along that line though... yeah, I agree, I don't think GPUs (or lack thereof) could cause a market crash. But you would certainly have the inverse: a market crash could wreck the GPU/high tech market. If we think about the last bubble pop - both AMD and nVidia ramped up production to meet the inflated demand. When the Bitcoin market dropped out, both of them got left holding tons of older inventory right at time when they were ready to do a generational change. It hammered both pretty badly. GPU prices cratered there for a while as retailers were struggling to get rid of older New SKUs and the gray market was flooded with used items. They eventually recovered, as gamers slowly chewed through all that inventory, but it took months, of not a couple of years - and now we have GPU manufacturers that are gun shy to ramp up production, which isn't helping the current shortage situation at all.

If you had a simultaneous market collapse - global recession style event... you wouldn't have those gamers slowly chewing through that excess inventory - all that discretionary income wouldn't exist. It would take a lot longer for the market players to recover -- some may not have the resources to make it through an extended drought, or their shareholders may get impatient and start demanding imprudent measures be taken to produce short-term shareholder value. You could see a lot of bankruptcies, consolidations, downscaling, and the market would look totally different coming out of that. And that's in a market segment where there isn't a lot of competition - you only really have two main manufactures, a handful of OEMs, and a pretty big retail network fanning out...

Think out Sci-Fi style.. there could be a situation where GPUs could cause a crash, but it's a hypothetical. You already have a lot of traders using some pretty advanced math and very high speed connections to perform trading. Some transactions are measured in milliseconds already, and if you can trade faster than the competition, that's a competitive advantage. So.. let's just pretend someone develops a way to GPU accelerate their stock market algorithm. Instead of Frames per second, your looking at Quantitave Transactions per second. And once you've done that and a good portion of the world's economies are flowing digitally via GPU-calculated algorithms, the next zero-day driver flaw, or a bad actor with a lot of GPUs in their basement, or maybe it's even unintentional and it's just a software bug -- and starts making all the wrong decisions, or... god forbid... your trading platform starts to ~lag out~ and you find yourself seconds behind the market, bleeding cash the entire way.

I'm not saying it's being done - it sounds more like the plot to a boring Sci Fi novel. But just thinking out of the box for a way it could be possible for GPUs to bring about global market collapse
 
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LazyGamer

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and now we have GPU manufacturers that are gun shy to ramp up production, which isn't helping the current shortage situation at all.
Big point here: not only are they gun-shy, but they also can't increase production with the single major fab capable of producing the highest-end parts completely tapped out and unable to expand fast enough themselves.
 

Auer

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The best thing that could come out of this Krypto Kapitalism thing is that maybe finally the "fiscally conservative" will realize a State /gov economies arent kitchen table small business ledgers. End this ****ing #deficitmyth.

Maybe in a few years. Tho it will always suit politicians to scare the voters with "market crashes" etc...
 

LazyGamer

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The best thing that could come out of this Krypto Kapitalism thing is that maybe finally the "fiscally conservative" will realize a State /gov economies arent kitchen table small business ledgers. End this ****ing #deficitmyth.
No myths here: just two parallel narratives pushed by the two major parties that dance around the point in order to corral voters.

Each side has its own misgivings about how they imagine the other side 'thinks'. Obviously, both are wrong and the truth lies elsewhere, like every other 'wedge issue' that the major parties use to secure their 'voting base'.

Tho it will always suit politicians to scare the voters with "market crashes" etc...
This is literally the only point.

Problem of course is that it does nothing to help with real crashes, it's just rhetoric by politicians blubbering whatever focus-grouped word soup their handlers / patrons hand them. We citizens are on our own when it comes to market instability.
 

Stoly

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Of course it's the most successful. They charged what they wanted and EVERY chip sold. Nothing stayed on a shelf. When your problem is your product can't be made fast enough to satisfy demand it doesn't matter why.

And really lets face facts here. As much as it sucks this Mining boom is looking less and less like a bubble and more like a cycle. As long as these cards make Hash rates faster and faster, they will sell as long as making hash rates = more money in than money out.

For a business it's a simple equation. X card/infrastructure cost, Y cost of cooling and maintenance, Z Cost of Staff. Total these. If these equate to less than the value of the generated Hash... It's profitable. The only gamble is can you generate enough hash to cash out on it before the Hash rate/value to cost flips. Once that happens as long as you had consumer cards you can recoup the costs, if you don't have a business reason to keep them.

Lets say you have a computer room with a few racks sitting basically empty. How much will it cost to fill those racks with Compute and many many video cards to crank out hash? Then once you're done with the profit cycle and paying for the hardware you can even gift those cards to your employees who will love it as a 'bonus'. Especially if your company is tech based.

I would be SURPRISED if someone like Epic doesn't have a few racks generating hash that they cash in to cover costs and make a bit of money. If I can fill half my datacenter with Mining hardware, and establish a way to cash it out where it pays for the rest of my datacenter... why wouldn't I?

The place you can't do this is in the cloud.

(actually the questionable nature of Bitcoins and 'mining' would prevent most companies from doing this. Especially since they have to declare the Capital Expenditure on 'mining'.)
If by "They charged what they wanted" you mean MSRP, then I guess you are right. It doesn't matter if a RTX 3070 card is sold at $499 or $1200, nvidia makes the exact same ammount of money. Now OEMs, well, that's another story...
 

Dan_D

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This isn't surprising. The fact is that the RTX 20 series was a disappointing follow up to the GTX 10 series. Frankly, the only card worth upgrading to if you already had a GTX 1080 Ti was the RTX 2080 Ti. A $1,300 card. Most of the other cards weren't much if any improvement over their predecessors and the feature improvements weren't compelling at the time. Ray tracing was cool and all, but even the RTX 2080 Ti couldn't often make use of it beyond 1920x1080 or without being combined with DLSS.

The RTX 30 series offers huge improvements in performance over the RTX 20 series which a lot of people skipped. You can (in theory) get RTX 2080 Ti performance for $500 with the 3070. A card that was upwards of $1,200+. Then you add the demand from mining, and NVIDIA is selling every 30 series card is produces extremely quickly. Inventory isn't sitting on shelves for long at all. It sucks for gamers, but its' great for NVIDIA. They aren't having to slash prices or discount any models to sell them.

As for this "charging what they wanted" nonsense, it's just that. NVIDIA didn't arrive at these prices without some idea of what was appropriate for the market. Most of the MSRP's are actually pretty good for the level of performance you are getting relative to the last generation especially. Pricing is closer to the GTX 10 series than anything. The RTX 3090 is expensive, but so is the GDDR6x RAM that they use. They also have a ton of that RAM which drives up the price.

As I've said before, these cards don't have the margins that people seem to think. It isn't as if NVIDIA could cut prices in half and still make money on these or anything like that. Could they be cheaper? I don't know. Possibly, but what more do you want? The prices are much more in line with the GTX 10 series than the RTX 20 series.
 

Stoly

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This isn't surprising. The fact is that the RTX 20 series was a disappointing follow up to the GTX 10 series. Frankly, the only card worth upgrading to if you already had a GTX 1080 Ti was the RTX 2080 Ti. A $1,300 card. Most of the other cards weren't much if any improvement over their predecessors and the feature improvements weren't compelling at the time. Ray tracing was cool and all, but even the RTX 2080 Ti couldn't often make use of it beyond 1920x1080 or without being combined with DLSS.

The RTX 30 series offers huge improvements in performance over the RTX 20 series which a lot of people skipped. You can (in theory) get RTX 2080 Ti performance for $500 with the 3070. A card that was upwards of $1,200+. Then you add the demand from mining, and NVIDIA is selling every 30 series card is produces extremely quickly. Inventory isn't sitting on shelves for long at all. It sucks for gamers, but its' great for NVIDIA. They aren't having to slash prices or discount any models to sell them.

As for this "charging what they wanted" nonsense, it's just that. NVIDIA didn't arrive at these prices without some idea of what was appropriate for the market. Most of the MSRP's are actually pretty good for the level of performance you are getting relative to the last generation especially. Pricing is closer to the GTX 10 series than anything. The RTX 3090 is expensive, but so is the GDDR6x RAM that they use. They also have a ton of that RAM which drives up the price.

As I've said before, these cards don't have the margins that people seem to think. It isn't as if NVIDIA could cut prices in half and still make money on these or anything like that. Could they be cheaper? I don't know. Possibly, but what more do you want? The prices are much more in line with the GTX 10 series than the RTX 20 series.
I think what people currently mean by "charging what they wanted" is Scalper Prices. Many people are under the impression that nvidia makes a higher profit for a 3090 sold on ebay for $3,000 which is not the case.

What I fear is that nivdia will learn the wrong lesson from this. They've seen that consumers are willing to pay ridiculous prices for cards, why let scalpers have all the fun selling the cards at twice price with a 100% profit? You think $1,200 dlls MRSP is high? I bet we'll see $3,000+ MSRP cards as soon as the next generation.
 

LazyGamer

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Many people are under the impression that nvidia makes a higher profit for a 3090 sold on ebay for $3,000 which is not the case.
I highly recommend letting stupid people be stupid. That's how they want to be, and by the gods, it's a free country!

Take the approach Jesus gave to his disciples: if folks listen, engage them, if they don't, keep going and forget them.

I do my part to educate, and then try to move on ;)
What I fear is that nivdia will learn the wrong lesson from this. They've seen that consumers are willing to pay ridiculous prices for cards, why let scalpers have all the fun selling the cards at twice price with a 100% profit? You think $1,200 dlls MRSP is high? I bet we'll see $3,000+ MSRP cards as soon as the next generation.
Nvidia has been happy to push average MSRPs up, but generally speaking they haven't been 'out of order' with respect to performance and MSRPs despite pushing the limits.

They're pretty smart. They know what happens if they raise MSRPs too much. They don't want to be in a situation where they're having to drop prices. If you recall the 2000-series Super refresh, that whole exercise was done to put higher-end dies in cheaper SKUs so that they didn't have to lower their MSRPs on the existing 'non-super' releases!
 

Stoly

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BTW I mentioned nvidia, but I'm sure AMD would do the same.
 

MadMummy76

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I think what people currently mean by "charging what they wanted" is Scalper Prices. Many people are under the impression that nvidia makes a higher profit for a 3090 sold on ebay for $3,000 which is not the case.
That might be the case for the US, but here in Europe retailers already charge scalper prices. Unfortunately I don't know who takes most of the profits, the end retailer, the distributor, the importer, or nvidia, or it's all distributed evenly between them. Current price for a 3090: over $4000.
 

Armenius

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Big point here: not only are they gun-shy, but they also can't increase production with the single major fab capable of producing the highest-end parts completely tapped out and unable to expand fast enough themselves.
As far as I know the Samsung 8nm node that NVIDIA is on isn't being used by anybody else.
 
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