This holiday season gamers are faced with something they’ve rarely faced before. Both the next-gen consoles, as well as the latest graphics cards from AMD and NVIDIA are facing severe shortages. In addition to that, even the newly launched Ryzen 5000 processors are either out of stock or being sold at outrageous prices.
Update: It’s wafers, not chips, thanks to Reddit for pointing it out.
According to a report from CT, AMD had to increase its 7nm capacity by 15% and it’s still not able to meet demand. In the last quarter of 2020, AMD supplied a total of 120K wafers to the console-makers: 80K for the PS5 and 40K for the Xbox Series X|S.
This put a significant strain on TSMC’s 7nm capacity, limiting the amount of the PC chips it could produce, explaining the shortages of the Zen 3 based Ryzen 5000 chips, despite the fact that AMD promised steady supply.
The reasons behind this are two-fold. It costs AMD less to produce the Zen 2 dies compared to the newer Zen 3 dies, and the total revenue margins from the consoles as indicated in the last earnings report is also somewhat higher. This is partly because there’s no Infinity Cache (SRAM) on the consoles (which is pricey) and secondly, the overall market for the consoles is much larger than the DIY PC space, promising higher revenue.
This is just a rough estimate but from what I’ve heard, at present, 65-70% of AMD’s total shipments consist of console parts, while the remaining 25-30% are meant for the Ryzen 5000 processors and the Big Navi GPUs. The latter gets the smallest allocation as it’s a monolithic design with low profit margins and the inclusion of the Infinity Cache reduces it even further.