Anyone who has waited nearly two years to “grab” a reasonably priced RTX 3xxx series graphics accelerator could very soon get exactly what they want, but be left with a “bitter taste” in the immediate aftermath after NVIDIA unveils the next generation RTX 4000.
In utterly predictable fashion, NVIDIA has outbid cryptocurrency miners’ appetite for an endless influx of graphics accelerators, saleable at however inflated prices. But as the cryptocurrency market operates on the model of a speculative bubble that bursts and reappears with investors’ appetite for risk, the “specialists” called in by the American company to assess the risk/benefit ratio acted more to satisfy the employer’s expectations, with the bet made to be settled later.
So it is that NVIDIA has once again been caught on the wrong foot, with the company left with perhaps millions of unsold graphics chips, even as the long-established timetable says it’s time for the launch of a new generation of graphics accelerators.
For now, NVIDIA is trying to allay investor fears, communicating only optimistic promises during its Q2-2022 earnings call: “We ended up with an excess inventory of GPU units,” says NVIDIA chief Jensen Huang. “Our strategy is to sell well below current market pricing levels to give the channel the opportunity to correct.”
“We have implemented programs with our partners to position product pricing per channel in preparation for our next generation GPU,” he added.
Loosely translated, NVIDIA’s plan is to sell as many graphics cards as possible with OEM partners before the RTX 4000 series becomes official. However, that doesn’t mean you’ll snag a high-end video card at a bargain price, as other variables such as the cost of assembly labor, video memory chips, and the rest of the necessary components come into the equation. Worse, suppliers’ inventories are still saturated with unsold, overpriced video cards, and NVIDIA’s attempts to drastically lower prices are likely to run into many roadblocks on the way to end buyers.
Somehow, the loss will also have to be shared by NVIDIA with OEM partners who manufacture graphics accelerators, i.e., resellers expecting to sell at generous profit margins.