AMD and NVIDIA Both Set for Low GPU Sales

Despite NVIDIA’s strong GeForce Series 10 graphics card launch and AMD’s incoming Vega GPU technology, both companies are set for a rough ride in the coming months, according to industry sources. Michael McConnell, chip analyst for Pacific Crest, warns that NVIDIA’s and AMD’s GPU inventory seem to be in excess of sales, with NVIDIA specifically falling victim to cancelled order for its GTX 1070 and 1080 graphics cards, which is particularly worrying so close to Christmas.

“Our specific findings were as follows: High-end NVIDIA GeForce GTX 1080 and 1070 card inventory levels have risen to 2 to 2.5 months in the channel versus targeted levels of one to 1.5 months due to weaker-than-expected sell-through in late October and November,” McConnell says (via Barrons).

“Given the weaker-than-expected sell-through of higher ASP GeForce GTX 1080/1070 product and higher sales mix of mainstream GeForce GTX 1060/1050,” McConnell adds, “not one desktop graphics card manufacturer we surveyed is expecting sequential revenue growth in calendar Q4, with forecasted sales declines of five to 15 percent.”

AMD has also experienced disappointing sales of its Radeon RX 470 and RX 480 cards. As a result, both companies are expected to introduce stricter inventory controls in the coming months.

“Given weaker-than-expected desktop graphics card sell-through and oversupply, we believe Nvidia and AMD have now implemented inventory controls to channel card manufacturers,” McConnell explains. “Desktop graphics card manufacturers believe that sell-through trends over the Chinese New Year holiday are likely to determine whether channel card inventory can be reduced at end customers in January, or if this sales correction will continue into February and the remainder of calendar 1Q17 given weaker seasonality.”

While NVIDIA shares are down 4%, AMD shares are up by the same amount, presumably due to the imminent reveal of its Vega GPU architecture today, and its Zen CPU architecture in January.