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Report: Shipments of AMD/Nvidia graphics cards hit by high inventories

  • Global graphics card shipments are expected to fall 30%-40% Q/Q in Q2 due to high inventories, industry sources (likely at Taiwanese OEMs) tell Digitimes.
  • Weak Bitcoin-related demand is said to be taking a toll, and AMD and Nvidia (NVDA) have reportedly been pressured to cut GPU prices to boost demand. But both firms are instead opting to focus on cutting GPU shipments.
  • Litecoin miners have been a boon for AMD's high-end GPU sales. Nvidia posted a 14% Y/Y GPU sales increase during the April quarter thanks to a mixture of high-end PC, server, and HPC strength.
  • The report comes 4 days after Intel hiked its Q2 and full-year guidance, while citing stronger-than-expected business PC demand. However, a large percentage of business PC sales involve systems with integrated GPUs rather than standalone cards.
Comments (56)
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    If true, that is bad. Watch AH reaction. I'd be careful.
    16 Jun, 05:41 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    On the other hand, the early bond buy-back is a positive.

     

    But, having witnessed five times now how negativity is conveniently spun a few weeks prior to earnings, no matter whether the above mentioned is truly negative, I would presume that AMD is being set up for the usual post-earnings hammering.

     

    Not surprisingly, top anti-AMD writer AE has this to say today http://bit.ly/1lvum4r
    17 Jun, 01:43 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    And that just before http://bit.ly/1i1bS1h
    17 Jun, 02:05 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Business as usual for AE. I admire his stamina and laser focused single minded purpose. The man is a dependable machine. I'm actually enjoying his new works over at The Fool, they are more cleverly written. The comments as always are very entertaining, draws me in every time.
    17 Jun, 02:33 AM Reply Like
  • xxavatarxx
    , contributor
    Comments (2080) | Send Message
     
    No way, Rav55 is trying his best to bash Intel on those articles to.

     

    I like this one. It's candid and to the point.

     

    "However, the mew reporting structure is much more useful as AMD seems to be heavily promoting itself as a company that will no longer be heavily dependent on PC sales. Further, the new structure will ultimately serve to make the company "look" better – and there's nothing wrong with that. "

     

    http://bit.ly/1lvum4r
    17 Jun, 02:57 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Well as I said, I find his articles are a bit more cleverly written these days.

     

    Rav55 is the antithesis of AE – and there's nothing wrong with that. Sorry I had to say it.
    17 Jun, 04:12 AM Reply Like
  • toonies
    , contributor
    Comments (393) | Send Message
     
    @Geekinasuit: yes, his style of writings is more matured under TMF, they lead him better than SA did here, but INTEL...
    17 Jun, 04:59 AM Reply Like
  • toonies
    , contributor
    Comments (393) | Send Message
     
    @AH: I always read only comments under his articles and sometimes I go fast through articles then. Saved time, enjoying read, more information.
    This is what makes AEs articles important: valuable rain of comments.
    17 Jun, 05:14 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    @AH, I thought you offloaded AMD? Are you thinking to get back in if it tanks after ER?
    17 Jun, 01:36 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    I bought back into it last week, but with only half of what my trailing stop-loss sold on my behalf on 23rd April. I bought back, because I believe we can enjoy a sixth pump & dump wave, as before, but this time from a not so low level as was custom.

     

    From what I read yesterday and today, the usual anti-AMD writing is being ramped up, as every quarter pre-earnings.
    17 Jun, 01:43 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    It didn't dump last ER, why do you think it will this ER? The GPU story is a bit disconcerting, but other than that there's not much else in terms of red flags. The negative stories before ER tend to repress the pump, not enhance it. The dump comes from a less than adequate financial statement and pessimistic forward guidance.

     

    This ER, the main pump source seems to be from a few high profile analysts that have upgraded AMD to a buy. This is different than from last pump and dumps, AMD was consistently looked at negatively almost across the board, a hold at best.

     

    I'm just wondering what your thoughts are on all of this if you don't mind sharing.
    17 Jun, 01:52 PM Reply Like
  • kjurden
    , contributor
    Comments (733) | Send Message
     
    @Andreas...I hope you're not going by what Ashraf is saying on the Fool.
    17 Jun, 02:24 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    ... or Cramer who says you should buy Intel because "Intel is the leader of old tech" ....
    17 Jun, 02:46 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    I'm always going by my own thoughts.

     

    Nevertheless, another anti-AMD article popped up. The gist of it: PCs = bad market (obsolete). Games = bad (mobile games). Conclusion = not a buy. Enjoy http://bit.ly/1pFSR6K

     

    Funny how AMD kept bumping its head against that $4.50 ceiling. Reminds me of February, when the stock was flat like a steel ruler. After last earnings, AMD sold off in my book ($4.30 > $3.93); of course not instantly and as much as usual. But the overall AMD moneymaking-pattern is well intact.
    17 Jun, 03:19 PM Reply Like
  • dwdallam
    , contributor
    Comments (6601) | Send Message
     
    AH

     

    Did you hear? Nokia is going to 10 on the exdiv date passing! Did you get back in yet?

     

    (This is an inside joke and has nothing to do with target prices for Nokia)
    17 Jun, 03:22 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    Nokia is only back at its 14th November 2013 valuation, a lackluster stock with no compelling story for me to buy back in. I'm in other stocks these days.

     

    But, in any case, enjoy the $10+ and your juicy dividends!
    17 Jun, 03:37 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Yeah that $4.50 ceiling was interesting to say the least.

     

    I'm not so sure AMD sold off last earnings, the market did dips all over in general during that time period. In any event it was not the same pattern repeating as with previous ERs. This ER could do the same, price may remain relatively stable. I don't expect a huge drop nor a huge gain. I'm waiting for Q3 when new products should start making a dent in the books. If we're lucky, one of those two semi-custom designs will be formally announced.
    17 Jun, 05:08 PM Reply Like
  • a1shot
    , contributor
    Comments (313) | Send Message
     
    I still hold Nokia and AMD, but AMD gave me a worry on 4.5 - magical number. You really feel no difference with the AMDs price in the coming earnings? It feels a bit stronger than last quarters, but i wonder on pump and dump scheme being in tact. Also, what are your picks for the time then?
    18 Jun, 10:55 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    I've given up trying to predict the markets many schemes to pilfer money away from less in the know traders. All I know is that the $4.50 flat line looked very unusual.

     

    I bought in low to mid $3's and I plan to just hang in there over the long term to cash out on the expected big gains when the story plays out enough.
    18 Jun, 01:06 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    In Europe, AMD fell 3% like a stone. A bit early for the usual sell-off pre/post earnings, isn't it?

     

    This stock, with it's long flatline early this year and other peculiar intra-day and weekly patterns, is the most unusual proper company's stock I have come across in soon two years of trading.
    18 Jun, 02:30 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    For all we know, the price is just some funny number generated by a crooked algorithm controlled by a few beaded men hiding deep in a cave somewhere in Afghanistan. There's no possible way this system is truly legitimate, not when there's so much money at hand to pilfer.
    18 Jun, 02:57 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    One more thing, AMD sold off early last ER, so maybe we'll see again the same pattern where it drops before ER, but does not drop after ER and perhaps even gains a few points. It will greatly depend on what the news and forward guidance is like. The few NSA types that already know what the report looks like will be making their moves well before we can.
    18 Jun, 03:06 PM Reply Like
  • mKiwi
    , contributor
    Comments (568) | Send Message
     
    I believe lots of traders sold off prior to the last ER expecting a drop in SP that didn't eventuate. Reading their comments I got the distinct impression that they were very unhappy to have sold their shares only to have the share price stay relatively constant rather than suffer the big drop off post ER.

     

    Personally I'm waiting for Q3 and Q4 and only expect to suffer through Q2. I am waiting for the expected semi-custom wins and I am waiting for the release of 20nm parts in 2015.
    18 Jun, 06:05 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    @mKiwi, what you said is my take on it too. Q3 and Q4 is where things start to become much more interesting for us longs, one way or the other.
    18 Jun, 08:50 PM Reply Like
  • mKiwi
    , contributor
    Comments (568) | Send Message
     
    @geeks

     

    What's your take on the CEO scuttlebutt?

     

    Lisa for CEO?

     

    I'm kind of hoping that they don't go fixing things that aren't broken. Although having said that, I am sure there is no reason that Lisa couldn't step into Rory's place should the need arise.
    19 Jun, 12:32 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7872) | Send Message
     
    A CEO change, amidst a turnaround effort that is ongoing, would result in much negative sentiment, wouldn't it? Capable as Lisa Su is, I would like AMD refraining from preparing another sentiment battlefield.
    19 Jun, 01:25 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Lisa could end up as CEO one day, but right now the company needs to show stability which means Rory ought to be staying firmly in place doing what he does best until the job is done. Lisa will likely take on some of the tasks Read has been dealing with which will free him up for greater things. The restructuring seems to make good sense, as it better reflects what the business is evolving into.
    19 Jun, 02:18 AM Reply Like
  • Tri Duong
    , contributor
    Comments (1454) | Send Message
     
    This is a temporary problem. It would cause a drop in price. I guess I got my wish to buy in after all :)
    16 Jun, 05:48 PM Reply Like
  • SeanLEE
    , contributor
    Comments (54) | Send Message
     
    We will see tomorrow but for now, AH is not reacting to this news at all.
    16 Jun, 05:55 PM Reply Like
  • toonies
    , contributor
    Comments (393) | Send Message
     
    How much accurate are Digitimes? If I remember well, they are not too much accurate.
    It can be true, but timing...i am not sure.
    16 Jun, 05:57 PM Reply Like
  • fastestxc
    , contributor
    Comments (35) | Send Message
     
    They've been reporting this since April it looks like. I don't have access to this content but under the related stories section, these articles come up:

     

    Related stories
    Graphics card demand drops in 2Q14 partly because of changes in Bitcoin ecosystem (May 21)
    Graphics card vendors look to 10-20% sequential drops in 2Q14 shipments (Apr 30)
    16 Jun, 06:06 PM Reply Like
  • a1shot
    , contributor
    Comments (313) | Send Message
     
    Crypto coins were not priced in so they are not priced out. Who knows how many of the items were used/sold for crypto coins? any numbers anywhere?
    16 Jun, 06:15 PM Reply Like
  • binartech
    , contributor
    Comments (107) | Send Message
     
    Nvda is up 10 cents AH and AMD is steady.
    I think 30 to 40 droop is the end of GPU market. like sounds too much !!!
    any shorts trying to recover AMD Rally ?

     

    16 Jun, 06:25 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Agreed, 30 to 40 is a massive change, seems far too high. Plus it was only AMD not Nvidia benefiting from Litecoin, so a drop should only be for AMD but that was never priced in as most analysts figured it was a fad. Bitcoin became impractical for GPU computing, ASICs took over long ago.
    16 Jun, 06:46 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Also, interesting timing of this news.
    16 Jun, 06:48 PM Reply Like
  • binartech
    , contributor
    Comments (107) | Send Message
     
    correction:
    "sounds like too much" !!!
    16 Jun, 06:36 PM Reply Like
  • Rollo Tomasi
    , contributor
    Comments (215) | Send Message
     
    Sounds like mischief from the contingent of the 56 million shares traded short.
    16 Jun, 07:00 PM Reply Like
  • ecstubblebine
    , contributor
    Comments (34) | Send Message
     
    Am I to understand that at first AMD manufactured too few graphics cards and now too many? If that is the case there's definitely a problem with AMD's product pipeline.
    16 Jun, 07:24 PM Reply Like
  • Rjlv6
    , contributor
    Comments (48) | Send Message
     
    Well it abously TSMC who is reporting this, there the only Taiwan based manufacturer I can think of but my question is I though most of AMD's stuff was developed by global foundries? And maybe strong notebook wins will offset this intels guidance probably came from strong notebook sales so maybe they will both will even each other out amd laptops are in the stores in much greater force than before soooo yea.
    16 Jun, 07:26 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    Many of the top graphics card OEMs (PowerColor, MSI, Asus, etc.) are based out of Taiwan. I'm guessing Digitimes has sources at some of them.

     

    Thing to keep in mind is that shipments aren't the same as end-user demand. Just because shipments might fall sharply Q/Q due to an inventory crunch doesn't mean user consumption is falling by a similar amount.
    16 Jun, 08:08 PM Reply Like
  • kjurden
    , contributor
    Comments (733) | Send Message
     
    @SA Editor Eric..So don't you think this report is a bit over done and "way late" to the table? As someone above already noted, the timing is somewhat suspicious especially since it was already announced back in April..
    16 Jun, 09:13 PM Reply Like
  • SeanLEE
    , contributor
    Comments (54) | Send Message
     
    Well.. AH didn't even react to this news. So I am not worried. If the stock falls tomorrow, its because the stock has been rallied in past few days, not because of this news.
    16 Jun, 09:37 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    It wasn't announced in April. The timestamp for the Digitimes piece is today (June 16). And the prior story being mentioned was about a 10-20% drop, not a 30-40% drop.
    16 Jun, 09:52 PM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Good point, inventory shipments declining does not necessarily mean that sales are declining by a similar amount. In any event, the price hit the days high point at AH close, so this news appears to have had no effect.
    16 Jun, 10:20 PM Reply Like
  • Sean Chandler
    , contributor
    Comments (422) | Send Message
     
    Really, now...
    16 Jun, 11:30 PM Reply Like
  • quevedo47
    , contributor
    Comment (1) | Send Message
     
    tricky business buy the dip?
    17 Jun, 12:34 AM Reply Like
  • amagus
    , contributor
    Comments (37) | Send Message
     
    Used mining GPUs are getting dumped into the open market at firesale prices. Just check eBay to see what used R9s are going for. R9 280x's are selling for around $150, half off retail. For the gaming market to absorb this excess, demand for new GPUs will absolutely be affected. We should find out during the AMD's Q2 earnings report just how much Q1's graphics sales were propped up by the crypto currency bubble.
    17 Jun, 01:12 AM Reply Like
  • GoldenGoose007
    , contributor
    Comments (51) | Send Message
     
    You're assuming that crypto currency is a bubble to begin with... Bitcoin and Litecoin are the first comers to the table. One of them may not even be the "coin" that ultimately succeeds. There are lots of other cryto-currencies out there being mined, all vying to replace or supplement Bitcoin. The people in this market are constantly investing in new hardware, and will continue to do so...
    17 Jun, 08:15 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    @GoldenGoose007, I agree crypto currency is here to stay, and if anything, it's going to keep on growing. Darkcoin is interesting because it addresses more of what people want, such as anonymity. The only threat to this new style of currency will be from governments who dislike losing control.
    17 Jun, 01:41 PM Reply Like
  • mKiwi
    , contributor
    Comments (568) | Send Message
     
    You might find a flood of cheap used cards actually increases the market size. People who might otherwise not be able to afford a high end graphics card might go out and buy one of these cheap second hand cards so that the market for new cards is not dramatically changed. Who can say until the results are out?
    17 Jun, 01:51 AM Reply Like
  • geekinasuit
    , contributor
    Comments (807) | Send Message
     
    Don't worry, an army of Darkcoin miners will snap them all up and then some.
    17 Jun, 02:35 AM Reply Like
  • mKiwi
    , contributor
    Comments (568) | Send Message
     
    AMD targets Australian enterprise with Kaveri-powered notebooks

     

    "AMD concedes it doesn't have the budget to rival Intel, but country manager Peter Chambers said the company is gaining momentum. "In Q1 of 2014, AMD was in 1 in every 3 Windows based PCs sold in retail in Australia and New Zealand, more than double that of a year ago."

     

    http://bit.ly/1jvSCDE
    17 Jun, 07:09 AM Reply Like
  • mKiwi
    , contributor
    Comments (568) | Send Message
     
    I think this article is very important. I believe it shows the strength of AMD's APU strategy. For business class notebooks and entry level desktops that don't have discrete graphics, I believe AMD have the best integrated solution combining CPU and GPU.

     

    Following up on this success we have many Mobile Kaveri wins and AMD have identified Nolan as a successor to Beema to be one of the first 20 nm products out of the gate for 2015.

     

    AMD have identified where their strengths are and they are following that up with the very latest technology that AMD have to offer.

     

    While there is some doubt about the end of litecoin mining using discrete graphics cards, I believe the roll out of graphics cards in 2015 at 20 nm should encourage many gamers to want to upgrade their cards.
    17 Jun, 05:53 PM Reply Like
  • Icicl3
    , contributor
    Comment (1) | Send Message
     
    I usually don't comment, but in this case, this ah of a writer is full-o-...

     

    Yeah I said it.
    17 Jun, 07:25 AM Reply Like
  • Rjlv6
    , contributor
    Comments (48) | Send Message
     
    One more question is this seasonal? If it is maybe the steam summer sales will drive more people to upgrade there GPU's to play more demanding games.
    17 Jun, 05:01 PM Reply Like
  • gofx
    , contributor
    Comments (289) | Send Message
     
    Something to keep in mind, in the long term, is that if AMD is successful in providing graphics on-chip then they will be creating a reduction in demand for discrete graphics cards for anything below the higher end.

     

    As I said... longer term.
    18 Jun, 07:09 AM Reply Like
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