The Intel/AMD news just won’t stop this week. Raja Koduri has indeed left AMD—and he has indeed joined Intel. This was a fair bit of conjecture until now (we even mentioned it in our most recent HW News video, not knowing whether it would be confirmed or debunked), but Intel has released an official statement confirming the move, and the existence of their newly formed Core and Visual Computing Group, which Koduri will helm.
Raja Koduri is a prominent figurehead in the industry, especially as it relates to graphics, visuals, and GPU computing. He notably led AMD’s Radeon Technologies Group, and served as director of graphics for Apple. News of his move to Intel came during his sabbatical he announced back in September, under which he intended to spend time with his family after a grueling Vega launch. His experience and expertise will doubtless be invaluable as part of Intel’s strategy to aggressively expand their presence in the GPU market.
Seagate Technologies (NASDAQ: STX) reported their financial results for the quarter ending September 29th, 2017. Seagate is largely known for manufacturing HDDs and external hard drives, a sector that has seen a decline over the last few years in part due to decreased pricing and availability of SSDs. Flash-based memory prices are high right now, but are overall significantly lower than when the technology was being introduced to the mainstream market.
For Q1 2018, Seagate reported revenue of $2.6 Billion, gross margin was reported at 28.0%, and net income was listed at $181 Million with diluted earnings per share of $0.62. For reference, last year’s financial results in Q1 2017, Seagate showed revenue of $2.8 Billion, gross margin of 28.6%, net income of $167 Million, and diluted earnings per share of $0.55.
The latest report out of TrendForce and DRAMeXchange indicates that the already-high DRAM prices will continue to climb through 2018. Original shortages were accused of being fallout from impending Samsung and iPhone major launches this year, but new information points toward a slow-down in production out of the big three memory manufacturers (Samsung, Micron, SK Hynix). The three companies claim to be running R&D efforts for future technologies, but the fact that all three coincide does mean that each group can continue to enjoy exceptionally high margins into the future.
Our newest video leverages years of data to make a point about the case industry: Thermal testing isn't just to find a potential item of nitpicking or discussion -- it has actual ramifications in frequency response, power consumption/leakage, and even gaming performance. The current trend of case design has frighteningly spiraled into design trends that are actively worsening performance of systems. This is a regular cycle, to some extent, where the industry experiments with new design elements and trends -- like tempered glass and RGB lights -- and then culls the worst of the implementations. It's time for the industry to make its scheduled, pendulous swing back toward performance, though, and better accommodate thermals that prevent frequency decay on modern GPUs (which are sensitive to temperature swings).
This is a video-only format, for today. Although the content starts with a joke, the video makes use of charts from the past year or two of case testing that we've done, highlighting the most egregious instances of a case impacting performance of the entire system. We hope that the case manufacturers consider thermals with greater importance moving forward. The video makes the point, but also highlights that resolving poor case design with faster fans will negate any "silent" advantage that a case claims to offer. Find all of that below:
This week's hardware news recap includes some follow-up discussion from our Intel i7-8700K review, primarily focused on addressing incorrect references of thermal testing cross-review/cross-reviewer. We also talk Coffee Lake availability and pricing, as it was unknown at time of finalizing the review, and dive into some of the new Z370 motherboards. EVGA's Z370 FTW and Classified K have both been announced (and we followed-up with EVGA to get pricing information), alongside a new Micro board in Z370 format.
Beyond this, we've got the usual listing of new product announcements and industry news, including USB3.2's specification, headless video cards, Star Citizen 3.0 alpha pushed to Evocati, and AIM's death.
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.
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