While we consumers typically tend to love high-stock levels at low prices, there is, of course, always the position of the manufacturer to consider. Too much stock, or supply exceeding demand, typically tends to result in prices coming down rather rapidly. Something we’re undoubtedly seeing at the moment in terms of SSD storage solutions, and, to a somewhat lesser extent, DDR5 memory.
Following a report via Videocardz, however, in something that may perhaps irk the PC hardware community, AMD has confirmed that they did deliberately restrict the supply of both graphics cards and processors in Q4 2022. And before you get too mad, factors have likely proven that this was almost certainly for pretty good business reasons.
AMD Confirms it Restricted GPU and CPU Supply in Q4 2022
So, why did AMD do this? Well, in their financial call meeting with stockholders Team Red CEO Dr Lisa Su was rather frank in admitting that they kept supply levels fairly restricted due to three key reasons. Firstly, they didn’t want to saturate the market with products that people were not ready to buy (which could potentially see retailer stock build. Secondly, they didn’t want to create a stock surplus which, from a retailer standpoint, would start to build pressure on discounts being applied. And thirdly? Well, Q4, and Q1 also, is typically the worst period in the year for hardware sales. Quite frankly, around this time of the year, people are more prone to counting pennies rather than spending them.
And, let’s be honest, there is a fourth reason that AMD didn’t go into here. And, in fairness, one which although they moderately suspected, wasn’t necessarily guaranteed. Namely, neither their Ryzen 7000 nor Radeon 7000 platforms have come out blazing from the gates with consumers. Oh sure, they’re both impressive, but consumers do still seem to be predominantly erring towards Nvidia in terms of graphics cards. And Ryzen 7000? Well, as we’ve noted many times in the past, the transitional cost is just making that move a bit too expensive for consumers right now.
Overall, as much as some might baulk and take offence at this admission, overall, it does seem to have made a solid bit of business sense for AMD.
What do you think though? – Let us know in the comments!
