When it comes to AMD, potential customers look towards it for one main reason. The pricing. AMD prices their processors and GPUs very reasonably. There are no two ways around this. Intel & Nvidia, unfortunately, have had a monopoly in the high end segment for a long time. That was until AMD outed the Vega and Ryzen series of CPUs and GPUs. The first generation Ryzen shook Intel and got not only the core race back, but it also threatened Nvidia to bring a solid mid-range card for the masses.

Vega 7

Now, AMD is challenging the market champions with the latest Ryzen Threadripper & Radeon Vega 7. The latter, which is going head to head with team green’s RTX 2080 has a lot of expectations to fulfill at a price that surprisingly isn’t much lesser than Nvidia’s offering. But there’s a lot more to the Vega 7 than meets the eye. Here’s how much the card costs when it comes to sheer hardware.

AMD Radeon Vega Vs NVIDIA GeForce RTX 2080 Benchmarks Leak Out

The BOM number that Fudzilla dug out is somewhere in the ballpark of $650 and $700. AMD confirmed at CES that the Radeon VII will be priced at $699 

HBM 2 memory is the most expensive part of the card as it costs as much as $320 per card. Assuming that the $650 is the bill of materials, the GPU’S memory costs nearly half of the whole card. 8GB would significantly bring down the cost, but for that AMD would have to repackage the Vega 20 and create one with 8GB (2x4GB HBM2) chips instead of the existing 4x4GB HBM2.

When AMD sells the Instinct MI50 / Mi60 (which is what the Radeon VII is based on) for $8,000 to $10,000 there is plenty of room for profit, but the company knows that gamers need something more affordable. The money spent on memory is a bit hard to justify for a gaming card.

Vega 7
The heart of the Radeon 7: a Vega 20 GPU with 16GB HBM2 memory on top of the GPU die.

Due to the complexity of interposer, the package is nearly a $100 while the cooler plus the PCB end up at about to $75. The rest of the cost is split between the Vega 20 design and the 7nm cost. We know that 7nm high performance is dramatically more expensive compared to 16nm TSMC that Nvidia or 14nm FinFET that AMD used for the original Vega in 2017.

The Radeon 7 is based on the Radeon Instinct MI50

The rest of the cost is split between TSMC 7nm manufacturing cost and AMD’s engineering bill to make the card. 7nm in early 2019 and late 2018 is reserved for some rock star customers that include Apple with its A12, Huawei with the Kirin 980 as well as Qualcomm with the Snapdragon 855. All these chips are tiny compared to AMD’s huge 331 mm2 GPU and AMD is a high performance part versus all the mobile chips that usually operate in under 3W TDP. AMD GPUs are usually in 100s of watts TDP. We call these three companies rock stars as they order millions of chips, and Apple even 10s of millions of chips per quarter.

This is good news for consumers as they aren’t overcharging the Radeon Vega 7. Based on what’s been found out, AMD is technically undercharging. They can’t cross $699 as the Vega 7 competes directly against Nvidia’s GeForce RTX 2080 which features Ray Tracing. Currently, the latter sells for $699 in the US and this is the same price AMD is looking to charge for its latest GPU.

Good competition drives prices down but Nvidia is a tough company to go against. Things will only get hotter when Intel debuts their first gaming oriented GPU next year and hopefully gives AMD & Nvidia a run for their money.

February 7 is the day when the Radeon Vega 7 goes on sale.

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