cynan wrote:chuckula wrote:DPete27 wrote:I saw this article on fudzilla stating that AMD loses $100 on every Vega 64 sold at suggested $500 MSRP....
But they make up for it in volume!
The real test will come when they report their Q3 earnings. If they aren't really in the black (I'm talking minimum $100 million in profit) in their graphics division even when literally every product they make is being snapped up immediately at an inflated price then it points to a structural issue inside of AMD itself. There are plenty of people who love to point fingers at Nvidia/Intel/Tooth Fairy as being the sole cause of all of AMD's woes, but all those big bad boogeymen aren't responsible for AMD failing to make money when literally everything AMD makes is sold instantly.
Are all of AMD's zen based CPUs sold out instantly? If you're just talking about their GPUs or Vega - well that's not so hard with the HBM2 situation. I'm not sure what's going on with their Polaris supply.
What do you mean "structural issue"? For AMD, gaming Vega was never about being competitive with Nvidia from a profit standpoint in the short term. It was an investment placeholder to keep them relevant in high end gaming until Navi. Which, so far, with HBM2 yields, hasn't panned out particularly well. But Vega was never going to undercut Pascal on a cost/revenue basis. They are still making profit on their professional Vega products
This isn't particularly complicated and you are conflating numerous irrelevant issues. First off, I don't care if AMD literally fails to sell a single RyZen/Threaripper/whatever CPU in all of Q3, their GRAPHCIS DIVISION THAT HAS NOTHING TO DO WITH ZEN ought to be making money hand over fist by selling out every single GPU they make at full price. As for Polaris, it's still in short supply and selling at inflated prices and it has been doing so for a long long time. If AMD can't capitalize on literally perfect market conditions that are actually rewarding them for producing products that aren't very good for most consumers, then I strongly doubt they are going to be posting huge profits when market conditions are no longer unrealistically good for them.
To put it in perspective, big bad Ngreedia sure doesn't seem to have a problem turning a profit even when they have literally zero revenue from x86 sales or even from what one would call a high-end ARM product. On top of that, Ngreedia isn't selling out every GPU it makes instantly and frankly most of its consumer line looks like a bargain when you compare real-world prices of Vega and Polaris to Nvidia's lineup. Nvidia is *not* experiencing perfect demand on anywhere near the scale of AMD, but for some reason Nvidia seems to turn a real profit anyway. Once again , the point is that things are *literally perfect* for AMD right now from the market demand side. If that can't put up *big* profits (not some B.S. "we made an operating profit but still lost money" line) then why should anybody rational expect them to be putting up big profits when the market eventually ceases to be *literally perfect*.
Secondly, I think Vega is a sub-par product for 99% of consumers since it's late, overpowered, overpriced, and underperforming. Do you know how much impact that has on AMD's Q3 earnings report? I'll tell you: ZERO. If AMD sells a Vega for $700 that is immediately thrown in a woodchipper compared to selling the same Vega for $700 to a miner compared to selling the same Vega for $700 to Krogoth, each of those sales has literally the same impact on AMD's Q3 numbers. AMD is in the extremely enviable position of producing products that are objectively worse than their competitors for 99% of real-world uses but it doesn't matter since they are selling anyway and money doesn't care about benchmarks.
As for the fact that HBM2 is in short supply or whatever other excuses are being offered, well AMD chose that path and that's AMD's fault. Their own marketing department claims that there is "unprecedented demand" for Vega. If AMD can't make a real profit when market conditions are basically perfect, then it's AMD's fault, end of story.