I said more or less exactly this:
https://www.tomshardware.com/news/why-nvidias-4080-4090-cost-so-damn-much
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What was the thought process behind calling the 12GB chip a 4080 instead of a 4070, especially since it's a different chip?
Nvidia's Justin Walker, Senior Director of Product Management, said, "The 4080 12GB is a really high performance GPU. It delivers performance considerably faster than a 3080 12GB... it's faster than a 3090 Ti, and we really think it's deserving of an 80-class product."
Frankly, that's a crap answer. Of course it's faster! It's a new chip and a new architecture; it's supposed to be faster. Remember when the GTX 1070 came out and it was faster than a 980 Ti? I guess that wasn't "deserving" of an 80-class product name. Neither was the RTX 2070 when it matched the 1080 Ti, or the 3070 when it matched the 2080 Ti.
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Here's the things we don't know:
- How much has Nvidia spent on R&D just for the past two years that could be directly pointed at Ada?
- What is the real BOM for a 40-series card?
If we had those two things, we could make better informed estimates of how much Nvidia could charge on RTX 4080 / 4090 and still make a modest profit. But of course Nvidia would never reveal those factors. What we do know is that Nvidia is a
large corporation with thousands of employees working on graphics cards. With a lot of them in California, we could reasonably estimate that they're all earning six figures minimum on the engineering and software side.
7,500 people at $100K each would be $750 million. $100K might be low, so let's call that a billion. (Realistically, only half are in gaming directly, but probably average salaries are way higher than $100K.) Nvidia grossed $26 billion in 2021, of which $12.1 billion was from the gaming sector. $1 billion in salaries could easily be covered... but then buildings, manufacturing, equipment, etc. all adds up.
I'm not saying Nvidia didn't make a lot of money in 2021. Obviously it did. But hypothetically let's say it sold 15 million GPUs in 2021 at an average price of $810. That would be $12.1 billion. Even if we go with a BOM of $600 (very generous toward Nvidia not being greedy), that would be $9 billion and leave $3.1 billion for other stuff. $1 billion for employee salaries drops that to $2.1 billion. Buildings and equipment could easily be $1 billion, maybe more. You eventually get down to the point where Nvidia makes billions and spends billions.
Nvidia also has 30-series inventory to "protect." Whether you like that approach or not, it's a business decision. When you have excess inventory on hand, launching new, faster GPUs at a price that would undercut them would rapidly cut into profits. Maybe Nvidia will eventually need to drop prices, but pre-emptively doing so? It was never going to happen. It's in the lead, it will charge a lot. That's a key reason for these prices.
Don't like them? Don't pay for them! That's the only thing anyone really can do. But having seen the past couple of decades, I can absolutely guarantee there will be people lining up to pay $900 or more for the 4080, and $1600 or more for the 4090. Until or unless that doesn't happen, we're not going to see prices come down.
Intel meanwhile has spent billions on Arc Graphics, and so far has lost nearly everything it put into the division. Arc A770 even at $349 is not going to make massive profits; it's barely going to break even on the hardware cost. But Intel
can't charge more if it doesn't offer a superior product. All indication are that the best Arc can do is maybe to match RTX 3060 Ti, and often not even that, plus you still have driver concerns. Intel has a sunk cost now so it's recovering as much of it as possible. Hopefully it can also stay in the GPU business and deliver better products in the future — Intel has the ability to lose money in GPUs while gaining market share in the short term, and that seems to be the plan right now.
TL;DR: Nvidia absolutely can sell RTX 3060 at under $300 if it feels the need. It could likely sell RTX 4080 12GB for $500 at a profit, just not a very large one. That would in turn kill sales of existing 30-series. So prices will be set as high as Nvidia wants and will stay there until or unless there's competition and/or lack of demand to force prices down. AMD might do that, Intel is trying to do that. We'll see how things play out in the coming months. Feigning anger on behalf of gamers, though? I'm not going to do it, because the justification for Nvidia's actions is... justified. Not by me, but by the markets of the world. Again, if you don't like it and don't like Nvidia, I'm totally fine with that and it won't bother me in the least if people don't pay the high prices Nvidia is asking.