Lisa Su, current president and CEO of AMD, has said the GPU and CPU conglomerate has been "undershipping" its hardware products lately, which is keeping prices up, but the reasons for doing so may not be as heinous as it sounds. With the new generation of graphics cards like the Ada Lovelace range now underway, with rival Nvidia launching its RTX 4000 series, the PC tech industry is continuing to move forward, which is especially good news for gamers given the state of the market during the height of the pandemic.
AMD released the RX 7900 XT and 7900 XTX towards the end of 2022. At the time, this was met with relief and even praise from consumers as the retail prices looked much more enticing than what Nvidia was selling its Lovelace cards for. In any case, gamers and PC enthusiasts have had a bit to choose from, especially with Intel entering the hardware arena, but it looks as though "team red" has been holding back a little bit.
In a recent earnings call with Su and a number of other participants from the company, AMD revealed that is "undershipped" its graphics cards for Q3 and Q4 of last year, with Su going on to say that this will continue for Q1 "to a lesser extent." This limited supply means that GPU prices have not fallen due to an oversaturated market as many were hoping. However, according to a report from PC Gamer, this supply restriction suggests that there is simply no "supply glut" and AMD is just trying to maintain a balance between supply and demand. General demand for PC hardware is down at the moment, especially since the demise of cryptomining. Su adds that the company should be back to a "more normal environment" after Q1.
Graphics card shortages were a major nuisance for a good couple of years, with much of it being the result of high demand during the lockdowns of 2020 and 2021. During this period, GPU prices skyrocketed to well above MSRPs, leaving a lot of PC users either without new hardware or having to pay extortionate prices. It also affected the tech industry in general, with a deficit of PS5 and Xbox Series consoles meaning gamers all round were going without for a long time.
With RDNA 3 competing with Nvidia's Lovelace, AMD is doing its level best to keep up with its biggest business rivals. For now though, it sounds like graphics cards are going to remain pretty pricey, but hopefully MSRPs will start to drop soon.
Source: PC Gamer, Seeking Alpha