Speculation: Ryzen 3000 series

[maddie]

Let's Ignoring that Matisse probably more expensive to produce than Summit Ridge/Pinnacle Ridge. (at the time of release)

Let's say that Matisse actually costs less to produce than Summit Ridge/Pinnacle Ridge. (at the time of release)

That doesn't mean that AMD is going to lower prices.

What would cause AMD to lower prices is Intel (its competitor) lowering its prices.

AMD is producing 3 die. One 7nm core die and two I/O die for the entire range of desktop/server CPUs. This huge cost of designing and validating a 7nm product is going to be amortized over many, many millions of 7nm chiplets. We already know that yields are probably very good due to size alone.

I agree that nothing guarantees that prices have to be lowered, but they can, and to use Murphy as a guide, if something can happen, it probably will.

Mindshare and marketshare is the priority now, not to repeat the folly of Ruiz, who jacked prices when on top, for a few quarters of increased margins, only to never get the useful brand recognition when the situation normalized.

All who argue margins, as the first priority, need to be mindful of the often neglected importance of cashflow to a growing business, which describes the modern AMD, even though an old company. If we think of the company as a new disruptive startup entering the world of high performance X86 CPUs, we would expect a low priced, seeking marketshare , strategy.

Maybe that's the issue. We think of them as an old player, not realizing thet we're looking at AMD 2.0. New products, new management, new many things.

 

[maddie]

Sale figures from online retailers

AMD dominate the ~$200 and under.

Rubbish. What percentage of the CPU market is this? Enthusiast built PCs are the majority of the market? What universe is this?

Deliberately misleading statements to advance an argument.

 

[Mopetar]

That's one big red herring.

1. I never said anywhere that AMD should set price above what consumers would buy and end up with a surplus. I said to set the price at market price.

Your argument was that the producers get to dictate the price. That is simply not the case. I can offer to sell people miniature Model T replicas made of pencil shavings for $300. If no one will pay that price, clearly I have no ability to dictate prices.

It is always the people with the money that set the price. See the recent crypto boom where GPUs were being sold at prices vastly over MSRP. Consumers were outbidding each other for limited GPU supplies. NVidia who tried to cash in on it has now supposedly been left with a warehouse full of older GPUs that they cannot hope to sell at the current prices.

You may have stated some correct facts in your post, but the underlying reasoning behind it was completely flawed. A broken clock might be right on occasion, but you shouldn't set your watch by it.

And as pointed out above, AMD already has a huge chunk of the low end of the market, then all they accomplish on the low end by lowering prices, is scuttling their own revenue and margins.

You seem to ignore that because AMD has found a way to produce their CPUs for less (the chiplet strategy of being able to produce a single die that is used across several product categories) that they have lowered their costs.

What this means is that they can sell for a lower price while still being more profitable. This is how new businesses form and take over markets. They find a way to deliver goods at the lower prices consumers want and steal those customers away from the companies that were too concerned about scuttling their own revenue and margins.

I expect that AMD will have lower prices, ones that we as consumers couldn't imagine three years ago. I also expect that they are about to enter one of the most profitable phases of their existence as a company in recent times and perhaps even their entire history as a result of those lower prices.

 

[Mockingbird]

AMD is producing 3 die. One 7nm core die and two I/O die for the entire range of desktop/server CPUs. This huge cost of designing and validating a 7nm product is going to be amortized over many, many millions of 7nm chiplets. We already know that yields are probably very good due to size alone.

I agree that nothing guarantees that prices have to be lowered, but they can, and to use Murphy as a guide, if something can happen, it probably will.

Mindshare and marketshare is the priority now, not to repeat the folly of Ruiz, who jacked prices when on top, for a few quarters of increased margins, only to never get the useful brand recognition when the situation normalized.

All who argue margins, as the first priority, need to be mindful of the often neglected importance of cashflow to a growing business, which describes the modern AMD, even though an old company. If we think of the company as a new disruptive startup entering the world of high performance X86 CPUs, we would expect a low priced, seeking marketshare , strategy.

Maybe that's the issue. We think of them as an old player, not realizing thet we're looking at AMD 2.0. New products, new management, new many things.

What are you talking about?

AMD is already outselling Intel, 2:1. (box processors)

Revenue is split about even between Intel and AMD because Intel processors have higher average selling price than AMD's.

 

[Mockingbird]

Rubbish. What percentage of the CPU market is this? Enthusiast built PCs are the majority of the market? What universe is this?

Deliberately misleading statements to advance an argument.

You are the one making misleading statements.

We have been talking about box processors, NOT sells to OEMs.

 

[maddie]

What are you talking about?

AMD is already outselling Intel, 2:1. (box processors)

Revenue is split about even between Intel and AMD because Intel processors have higher selling prices than AMD's.

And I'm asking, what is this in relation to the total CPU market? Is it the main market for CPUs?

By the way, this data point as for a German retailer AFAIK. Is this the same worldwide? Do you know, or are you making assumptions and extrapolating?

 

[Mockingbird]

And I'm asking, what is this in relation to the total CPU market? Is it the main market for CPUs?

By the way, this data point as for a German retailer AFAIK. Is this the same worldwide? Do you know, or are you making assumptions and extrapolating?

What does it matter to this discussion?

OEMs don't pay retail prices.

Now, if you want to take about why AMD should lower OEM prices (NOT retail prices), that's a different matter.

 

[Kocicak]

Market share is not just about momentary sales figure, it is about how many goods from one manufacturer people really own and use. The end goal is the largest presence on the market in highest usage percentage. So even if AMD happened to outsell Intel right now, it is meaningless. They need it to last a long time and actually build costumer base to buy their future products. And for that they cannot be just a little bit better than Intel, they must CRUSH IT. They have a large gap to fill.

 

[Mockingbird]

Your argument was that the producers get to dictate the price. That is simply not the case. I can offer to sell people miniature Model T replicas made of pencil shavings for $300. If no one will pay that price, clearly I have no ability to dictate prices.

It is always the people with the money that set the price. See the recent crypto boom where GPUs were being sold at prices vastly over MSRP. Consumers were outbidding each other for limited GPU supplies. NVidia who tried to cash in on it has now supposedly been left with a warehouse full of older GPUs that they cannot hope to sell at the current prices.

You may have stated some correct facts in your post, but the underlying reasoning behind it was completely flawed. A broken clock might be right on occasion, but you shouldn't set your watch by it.



You seem to ignore that because AMD has found a way to produce their CPUs for less (the chiplet strategy of being able to produce a single die that is used across several product categories) that they have lowered their costs.

What this means is that they can sell for a lower price while still being more profitable. This is how new businesses form and take over markets. They find a way to deliver goods at the lower prices consumers want and steal those customers away from the companies that were too concerned about scuttling their own revenue and margins.

I expect that AMD will have lower prices, ones that we as consumers couldn't imagine three years ago. I also expect that they are about to enter one of the most profitable phases of their existence as a company in recent times and perhaps even their entire history as a result of those lower prices.

Market price is the price that people are willing to pay (for the product).

If AMD has a huge stockpile that it can't sell, the set price is above market price.

Since AMD has no problem selling its processors, it's clearly at or below market price.

Since the processors are already at or below market prices, there's no reason for AMD to lower its prices unless Intel cut its own prices.

 

[Schmide]

Here's a unique situation. This is a time where AMD could dump on the market. When you have a Monopoly as Intel basically still has. (Though slightly waning) You cannot artificially lower prices to drive a competitor out of business. However if you have a minor share of the market, a company can sell at artificial low discounts to at least reach parity.

There are some major exceptions to this. Government or state owned companies as well as shell companies, but IMO AMD is still in a position to get away with such an endeavor.

In karma land it would be a good response to Intel's past transgressions.

 

[maddie]

You are the one making misleading statements.

We have been talking about box processors, NOT sells to OEMs.

Have we been only talking about box CPUs? Do you think they will settle for this market alone? Can AMD even survive long term on servers and Box CPUs only?

Intel has much lower prices for OEMs and charges much higher for retail because they can, and also, when you have the overwhelming majority of the market, that is the only way to get a higher share price, besides creating new markets, which I might add is what a board is supposed to do. Maximise shareholder value.

Those who argue for lower prices in AMDs case realize that with a minuscule marketshare, AMD can increase the share price quicker by increasing marketshare and keeping margins reasonable, versus chasing margins solely.

 

[OTG]

Let's say the Zen 2 8-core launches at $329, with performance similar to the 9900k (currently $529 at Newegg). The price of the 9900k will fall to something more reasonable, but still a bit higher, say $350.
This gives us two pretty good options for a powerful 8-core. Intel loses some margins, but they're still making money, and AMD can price their 12 and 16-core parts wherever makes sense above that.

If, on the other hand, AMD goes HAM and prices their 12-core part at $329, their 8-core part at $199, and 6-cores starting at $99, they completely eliminate Intel as a viable option!
The bottom falls out of their product stack.
Try to sell a 140+ watt 9900k against a 65 watt R5 with the same performance?
For twice as much money?
Against a 105-watt, 12-core part for $329?
GTFO.
Intel can lower prices to a point, but unless they get better margins on a monolithic 8-core than AMD gets using chiplets...

No more "I'll buy Intel because it's only a few bucks more, and I know they make good parts".
It's "I can buy AMD, for half the price, get more performance, less heat and noise, cheaper system costs, and an upgrade path".
If it's about taking back market share, why pass up an opportunity to make the 9900k as much of a joke as the 9590, with sales to match?

 

[Mockingbird]

Here's a unique situation. This is a time where AMD could dump on the market. When you have a Monopoly as Intel basically still has. (Though slightly waning) You cannot artificially lower prices to drive a competitor out of business. However if you have a minor share of the market, a company can sell at artificial low discounts to at least reach parity.

There are some major exceptions to this. Government or state owned companies as well as shell companies, but IMO AMD is still in a position to get away with such an endeavor.

In karma land it would be a good response to Intel's past transgressions.

AMD already dominate the ~$200 and under market.

AMD can't take marketshare from itself, but AMD sure can take market share from Intel.

Intel dominate the $300+ market (with products such as the Core i7-8700K, Core i7-9700K and Core i9-9900K) and that's where AMD need to compete.

$329 8C/16T Ryzen 7 3700X with similar performance to Core i9-9900K

$499 12C/24T Ryzen 9 3800 with 50% more cores/threads than Core i9-9900K

Those are the products that would let AMD take market share from Intel.

 

[Mockingbird]

Have we been only talking about box CPUs? Do you think they will settle for this market alone? Can AMD even survive long term on servers and Box CPUs only?

Intel has much lower prices for OEMs and charges much higher for retail because they can, and also, when you have the overwhelming majority of the market, that is the only way to get a higher share price, besides creating new markets, which I might add is what a board is supposed to do. Maximise shareholder value.

Those who argue for lower prices in AMDs case realize that with a minuscule marketshare, AMD can increase the share price quicker by increasing marketshare and keeping margins reasonable, versus chasing margins solely.

You argument is a straw man

We have been talking about retail prices and OEMs don't pay retail prices.

I never said that OEM sales don't matter, but that is NOT what we have been talking about.

 

[Schmide]

AMD already dominate the ~$200 and under market.

AMD can't take marketshare from itself, but AMD sure can take market share from Intel.

Intel dominate the $300+ market (with products such as the Core i7-8700K, Core i7-9700K and Core i9-9900K) and that's where AMD need to compete.

$329 8C/16T Ryzen 7 3700X with similar performance to Core i9-9900K

$499 12C/24T Ryzen 9 3800 with 50% more cores/threads than Core i9-9900K

Those are the products that would let AMD take market share from Intel.

AMD has at most 30% of the market. OEM it prob has less than 10%.

Any market share AMD can take regardless of price would pay for itself in long term contracts.

Looking at things with such myopic lens will probably not convince many.

 

[OTG]

AMD already dominate the ~$200 and under market.


$329 8C/16T Ryzen 7 3700X with similar performance to Core i9-9900K

$499 12C/24T Ryzen 9 3800 with 50% more cores/threads than Core i9-9900K

Those are the products that would let AMD take market share from Intel.

All that does is give them competitive pricing, once intel cuts theirs.
They don't want competitive pricing, because that means Intel will continue to outsell AMD, through inertia and marketing, if nothing else.

They want (need, IMO) to make buying Intel an indisputably bad idea, like buying an 8350 instead of an i7.
THAT is how they'll win back marketshare.
No putzing around with a tit-for-tat price war, straight to "We have better products, at better prices, full stop, end of argument. Buying Intel is throwing your money away."

 

[Mockingbird]

Let's say the Zen 2 8-core launches at $329, with performance similar to the 9900k (currently $529 at Newegg). The price of the 9900k will fall to something more reasonable, but still a bit higher, say $350.
This gives us two pretty good options for a powerful 8-core. Intel loses some margins, but they're still making money, and AMD can price their 12 and 16-core parts wherever makes sense above that.

If, on the other hand, AMD goes HAM and prices their 12-core part at $329, their 8-core part at $199, and 6-cores starting at $99, they completely eliminate Intel as a viable option!
The bottom falls out of their product stack.
Try to sell a 140+ watt 9900k against a 65 watt R5 with the same performance?
For twice as much money?
Against a 105-watt, 12-core part for $329?
GTFO.
Intel can lower prices to a point, but unless they get better margins on a monolithic 8-core than AMD gets using chiplets...

No more "I'll buy Intel because it's only a few bucks more, and I know they make good parts".
It's "I can buy AMD, for half the price, get more performance, less heat and noise, cheaper system costs, and an upgrade path".
If it's about taking back market share, why pass up an opportunity to make the 9900k as much of a joke as the 9590, with sales to match?

A price war is a loser for AMD.

AMD cannot win a pricing war against Intel.

Intel has much higher profit margins than AMD.

Intel can sell 8-cores processors for $50 until AMD goes bankrupt if it wants to.

 

[PeterScott]

AMD has at most 30% of the market. OEM it prob has less than 10%.

Any market share AMD can take regardless of price would pay for itself in long term contracts.

Looking at things with such myopic lens will probably not convince many.

Which is why AMD should play hardball behind the scenes on OEM contracts, not drop retail pricing.

 

[Mockingbird]

AMD has at most 30% of the market. OEM it prob has less than 10%.

Any market share AMD can take regardless of price would pay for itself in long term contracts.

Looking at things with such myopic lens will probably not convince many.

Which market? Retail market? OEM market? Server market?

 

[Kocicak]

Market price is the price that people are willing to pay (for the product).

No, it is not. One could first educate himself if he wants to speak about some topic. Absolvent of undergrad basic course of economics would not say this.

 

[PeterScott]

Intel can lower prices to a point, but unless they get better margins on a monolithic 8-core than AMD gets using chiplets...

Actually Intels 8 core parts probably will cost less to produce than dual chip 7nm/12nm hybrid.

 

[OTG]

Intel can sell 8-cores processors for $50 until AMD goes bankrupt if it wants to.

[citation needed]
You keep pointing out that AMD has bills to pay, as a reason they can't go too low on pricing.
Well, so does Intel. Much higher bills, since they own foundries, shareholders to keep happy, and regulators to avoid.

Actually Intels 8 core parts probably will cost less to produce than dual chip 7nm/12nm hybrid.

IF that's true, it's exactly why AMD can't afford to fool around with "competitive" pricing.
They need to offer a LOT more, for a LOT less.

And they need to do it quickly, to get as many AM4 boards into new PCs as possible, before Intel can launch a truly competitive product.

 

[maddie]

You argument is a straw man

We have been talking about retail prices and OEMs don't pay retail prices.

I never said that OEM sales don't matter, but that is NOT what we have been talking about.

It's not a strawman. You are the one making assumptions about AMD's Box CPU marketshare based on a sole source. This is very misleading, unless you know the worldwide share of sales regarding Intel vs AMD. We do have worldwide competition between the two after all.

Even if we restrict this to Box CPU sales. Do you actually know this percentage worldwide or are you assuming parity with mindfactory.de?

 

[Schmide]

Which is why AMD should play hardball behind the scenes on OEM contracts, not drop retail pricing.

Who cares where they play hardball? If AMD has the means by design they should do whatever it takes to become a bigger player while they can.

Here's something to think about. If they, lets say artificially, set the value of a 6 core near $100, they change the perceived value of a processor.

Long ago an economist Thorstein Veblen coined a term conspicuous consumption. Which the long and short of it is, it's not the value of the product, it's the feeling of social status one receives from owning a product. This perceived value often dictates markets more than the actual value of a product. The Gigahertz race could be seen as such a situation. The core race could resemble it as well.

 

[Mockingbird]

I can't believe people on this forum don't know this, SO I WILL SAY IT NOW:

Retail prices (of processors) are the prices you pay for the processors at the store.

OEM prices (of processors) are the prices original equipment manufactures (Lenovo, Dell, HP) pay for the processors.

Original equipment manufactures (OEMs) pay OEM prices not retail prices.

We are currently talking about retail prices, not OEM prices.

Do not conflate the two.