Graphics Cards Suppliers Accuse ATI, Nvidia of Creating Shortage on the GPU Market

From X-bit Labs: Taiwan-based suppliers of graphics cards have accused ATI, graphics business unit of Advanced Micro Devices, and Nvidia Corp. of creating shortages on the market of discrete desktop graphics processing units (GPU). Meanwhile, both ATI and Nvidia have shifted their inventory policies, which does not allow their partners to receive huge discounts when buying graphics chips in large quantities on the last day of a quarter.

A number of recent media publications suggest that ATI and Nvidia have started to reduce supplies of previous-generation high-end offerings, e.g., ATI Radeon HD 4870 X2 or Nvidia GeForce GTX 285, as well as previous-generation 55nm graphics chips in general. Due to short supply of GPUs, graphics board vendors are reportedly even considering to increase pricing of graphics boards in order to fulfill the demand. Some claim that shortages will persist till Q1 2010.

Even though the two designers of graphics chips are streamlining their businesses at the moment, shortage of graphics cards may not be completely their fault. At a recent meeting with financial analysts, Mike Hara, vice president of investor relations at Nvidia, explained that the company’s goal is to have inventory for 30 days of sales, which allows the firm to respond to competitive challenges in a timely manner. ATI’s goal seems to be generally similar: to keep as few chips in stock as possible.

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