Nvidia admitted that it found itself having to deal with a glut of RTX 3000 GPU stock to sell ahead of the launch of the high-end Lovelace graphics cards – and while further price drops seem to boost current-gen sales, which is clearly good news, we’re not sure how far these cuts will go.
This is all based on comments made by CEO Jensen Huang on a conference call following Nvidia’s fiscal second quarter results, as On the edge (opens in new tab) reports, with the chief executive giving somewhat mixed messages around this Ampere stock liquidation issue.
Huang didn’t bother to confirm the RTX 3000 GPU stock situation, mind you, stating clearly that: “We found ourselves overstocked. Our strategy is to sell well below current market sell levels to give the channel an opportunity to correct.”
The CEO added, “We have implemented programs with our partners to position product pricing in the channel in preparation for our next generation.”
In fact, we’ve already seen Nvidia announce price cuts on high-end Ampere graphics cards, and we’ve seen RTX 3000 GPU prices consistently drop in recent times – so it looks like this is likely to continue, as expected.
However, Huang made a few other comments flagged in the report that make us wonder just how deep the price cuts could be.
Namely, Nvidia will follow a strategy where the RTX 3000 graphics cards will be “overlaid” on the high-end GPUs, as Huang puts it, and that Team Green also has other options in terms of getting rid of additional GPUs for data. centers, perhaps, noting that “we hear widely that GPU provisioning is in short supply in the cloud.”
Analysis: Alternative strategies in the works?
What is the result of all this? Huang appears to be putting some emphasis on alternative strategies to help weed out the overstock of Ampere GPUs more quickly, rather than a direct aggressive price drop, or even a basement bargain as the next-gen RTX 4000 rolls out. get closer. Of course, going the latter route would not be popular with partners in terms of actually cutting profit margins.
While we can expect more price cuts for Nvidia GPUs, so – as we’ve seen, this has been a regular trend over the last few months, and we’d be surprised, or shocked, if it didn’t continue – they could be more modest dips rather than full cuts. Especially if Nvidia can take some of those excess graphics cards out for data center use.
The commentary on the RTX 4000 and RTX 3000 GPU tier is perhaps more revealing as it hints at an expectation that Ampere stock will continue for some time yet – again, pointing to some sort of big run to sell. Both tracks can exist simultaneously, and on top of that, maybe it’s Huang hinting at something else that’s been floating around in the rumors lately. That is, Nvidia will stagger the Lovelace GPU release at a slower pace than usual.
So instead of having the RTX 4090 show up (rumored to be first out), followed by the RTX 4080 and then 4070 with a month in between – which was what the initial word of the vine theory could happen – you can there may be several months between each of these cards. Or the RTX 4080 and 4070 could even be delayed until 2023, which is more of a theory, and that kind of slower-than-usual cadence could be what the aforementioned tiers of current and next-gen GPUs refer to.
Ultimately, we don’t know, and many different nuances can be read in these comments. But overall, the message we’re getting from this is: Expect more price cuts to change the stock RTX 3000 in good time ahead of next-gen cards, but don’t expect reduced prices or panic. Although, of course, that’s the message Nvidia would like to send anyway…
One last thing – as The Verge further highlights, CFO Collette Kress also joined the conversation to let us know that Nvidia will be reaching a “new segment of the market” with its gaming technology, without revealing anything further about what that arena or technology is. Can it be. Stay tuned, we think, for a big reveal at some point in the future.