Variations of “HBM2 is expensive” have floated the web since well before Vega’s launch – since Fiji, really, with the first wave of HBM – without many concrete numbers on that expression. AMD isn’t just using HBM2 because it’s “shiny” and sounds good in marketing, but because Vega architecture is bandwidth starved to a point of HBM being necessary. That’s an expensive necessity, unfortunately, and chews away at margins, but AMD really had no choice in the matter. The company’s standalone MSRP structure for Vega 56 positions it competitively with the GTX 1070, carrying comparable performance, memory capacity, and target retail price, assuming things calm down for the entire GPU market at some point. Given HBM2’s higher cost and Vega 56’s bigger die, that leaves little room for AMD to profit when compared to GDDR5 solutions. That’s what we’re exploring today, alongside why AMD had to use HBM2.
There are reasons that AMD went with HBM2, of course – we’ll talk about those later in the content. A lot of folks have asked why AMD can’t “just” use GDDR5 with Vega instead of HBM2, thinking that you just swap modules, but there are complications that make this impossible without a redesign of the memory controller. Vega is also bandwidth-starved to a point of complication, which we’ll walk through momentarily.
Let’s start with prices, then talk architectural requirements.
Jon Peddie Research reports that the add-in board GPU market has increased 30.9% over last quarter and 34.9% year-to-year, largely thanks to the recent cryptocurrency mining craze.
Regardless of the exact numbers, it’s obvious to anyone that’s checked graphics card prices recently that something unusual is happening. JPR states that Q2 usually sees a “significant drop” in the market (average -9.8%), with the most action happening around the holiday season. This Q2, the market has increased for the first time in nine years. This is despite general PC market decline as demand for the industry’s bread-and-butter general purpose (non-gaming) PCs has dropped.
Following questions regarding the alleged expiry of MDF and rebates pertaining to Vega’s launch, AMD responded to GN’s inquiries about pricing allegations with a form statement. We attempted to engage in further conversation, but received replies of limited usefulness as the discussion fell into the inevitable “I’m not allowed to discuss this” territory.
Regardless, if you’ve seen the story, AMD’s official statement on Vega price increases is as follows:
Following the initial rumors stemming from an Overclockers.co.uk post about Vega price soon changing, multiple AIB partners reached out to GamersNexus – and vice versa – to discuss the truth of the content. The post by Gibbo of Overclockers suggested that launch rebates and MDF would be expiring from AMD for Vega, which would drive pricing upward as retailers scramble to make a profit on the new GPU. Launch pricing of Vega 64 was supposed to be $500, but quickly shot to $600 USD in the wake of immediate inventory selling out. This is also why the packs exist – it enables AMD to “lower” the pricing of Vega by making return on other components.
In speaking with different sources from different companies that work with AMD, GamersNexus learned that “Gibbo is right” regarding the AMD rebate expiry and subsequent price jump. AMD purportedly provided the top retailers and etailers with a $499 price on Vega 64, coupling sale of the card with a rebate to reduce spend by retailers, and therefore use leverage to force the lower price. The $100 rebate from AMD is already expiring, hence the price jump by retailers who need return. Rebates were included as a means to encourage retailers to try to sell at the lower $499 price. With those expiring, leverage is gone and retailers/etailers return to their own price structure, as margins are exceptionally low on this product.
Where video cards have had to deal with mining cost, memory and SSD products have had to deal with NAND supply and cost. Looks like video cards may soon join the party, as – according to DigiTimes and sources familiar with SK Hynix & Samsung supply – quotes in August increased 30.8% for manufacturers. That’s a jump from $6.50 in July to $8.50 in August.
It sounds as if this stems from a supply-side deficit, based on initial reporting, and that’d indicate that products with a higher count of memory modules should see a bigger price hike. From what we’ve read, mobile devices (like gaming notebooks) may be more immediately impacted, with discrete cards facing indeterminate impact at this time.
This episode of Ask GN returns with our new format, frontloading the episode with some discussion topics before feeding into the user-submitted questions. As always, for consideration in next episode, please leave your comment on the YouTube playback page or in our Ask GN Discord channel for Patreon backers.
The video opens with another “gift” from NZXT, some new power draw testing, AMD Vega naming thoughts (and rushed launches with Intel & AMD), and then addresses user questions. We hop around from liquid metal to CPU and airflow topics, giving a good spread to this episode.
Watch below – timestamps below the embedded video:
As we do each week, we’ve rounded-up the major hardware news topics for the past week of industry announcements, all headlined in today’s video. The show notes are also posted in this article, if that format is preferred.
Major news topics seem to pertain to Vega: Frontier Edition – which has had fresh hype attached to it, following a newly published preview – and special edition mining cards, with additional news covering industry topics and launches. SSD and RAM prices remain a mainstay discussion topic for us, though we’ve also got some information on a Blender update, LGA2066 cooler compatibility, SilverStone’s Strider PSUs, and G.Skill’s new memory. More below.
We’ve been writing about the latest memory and Flash price increases for a bit now – and this does seem to happen every few years – but relief remains distant. The memory supply is limited for a few reasons right now, including new R&D processes by the big suppliers (Samsung, Toshiba, SK Hynix, Micron) as some of the suppliers attempt to move toward new process technology. More immediately and critical, the phone industry’s launch cycle is on the horizon, and that means drastically increased memory sales to phone vendors. Supply is finite – it has to come out of inventory somewhere, and that tends to be components. As enthusiasts, that’s where we see the increased prices come into play.
This was largely no surprise, given the stance that both the current administration and the newly appointed head of the FCC have adopted. The reversal of the rules traveled quick enough through the House and Senate that constituents had little chance to mitigate the overturn. We’ve covered this issue since it became public news, but in the event you’re not up to date, the now non-existent rules would have required ISPs to obtain clear consent before using data for advertising and other monetary purposes.
Kingston Digital was responsible for a full 16% of SSDs shipped in 2016, according to data compiled by research firm Forward Insights. This puts their market share in second place, just behind Samsung’s 21%.
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