The latest GeForce RTX 4000 model is said to not be selling as well as Nvidia had planned, so in addition to the discounts, the production of these GPUs is also supposed to be limited.
On Wednesday, we had a report that Nvidia is already preparing to discount the newly released GeForce RTX 4070 graphics. Within a week of the release, the cards were in stock and there was no usual shortage or price increase (on the contrary, they are already appearing at a price below the recommended price). From this it can be concluded that the sales are apparently not as big as Nvidia would like. Allegedly, it could therefore also limit the production of this card, so that the excess cards do not remain stuck in the warehouses.
Reports surfaced on the Chinese Board Channel Forums that Nvidia has agreed with card manufacturers to temporarily suspend production to reduce the total volume of GeForce RTX 4070s shipped to the market so that there is no surplus. Nvidia is reportedly suspending the supply of the AD104 chip (in the configuration intended for this model, the higher GeForce RTX 4070 Ti will probably not be affected) for one month, which will also suspend the production of complete RTX 4070 cards.
According to WCCFtech, who reported on this, sales of the GeForce RTX 4070 were relatively strong immediately after launch, but fell in the following days as the accumulated demand from gamers who were directly waiting for the card was satisfied. But if the reports of lean unsalted sales are true, then it is possible that this model, unlike the higher models of the new generation of Nvidia, is not so attractive to gamers. Perhaps, among other things, because this segment is already more sensitive to price and interested parties are discouraged by a 20% price increase compared to the previous generation (the RTX 4070 costs $599, while the RTX 3070 started at $499).
Founders Edition cards and those models from partner manufacturers that sold at suggested retail price were said to be the most successful, while sales of premium editions were weak. It is possible that the production limitation mainly reflects these more expensive cards. In theory, the output of cheaper graphics could be limited in order to sell more expensive versions. However, the data on how well certain RTX 4070 models are selling can probably be very anecdotal, so the question is how exactly this information presented by WCCFtech reflects reality.
In any case, the reduction in production, contrary to the original plan, is to align card stocks with market demand, so that surpluses do not arise in warehouses, which are sometimes difficult to get rid of. Companies then have to limit production anyway and sometimes resort to drastic discounts.
This decision to produce less thus in a sense prevents downward pressure on prices, but in this context it should not be said that it is some kind of unfair artificial price screwing up (see the recent ill-conceived controversy in this vein around AMD). When the market is not buying, production cuts are quite natural. In addition, Nvidia is not averse to some price cuts (according to reports of discounts the company gives to card manufacturers).
Others are also limiting production
It should probably be added that the limitation of graphics production is not some kind of sensation that would mean serious problems for Nvidia. This is not unusual in the current economic climate. Computer sales have deteriorated year-on-year by tens of percent, and a number of hardware manufacturers had to reduce previously planned production volumes. This information also appeared in connection with Apple, which is said to have also announced the restriction or suspension of MacBook production to Asian suppliers. The current Nvidia news may be more or less just part of a global trend.
Source: WCCFtech
