AMD Radeon VII rumored to cost over $650 to manufacture

Earlier this month, rumors hit the web about AMD's Radeon VII being a limited edition run. According to the rumor, the Radeon VII is basically a marketing stunt because AMD is not able to turn a profit on this card. Now there's news from FUD Zilla that AMD is indeed not going to make any meaningful money on this model.

A calculation of the bill of materials (BOM) of the Radeon VII reveals the card has a production cost between $650 and $700, which is extremely high considering the MSRP is only $699. The site suggests the Radeon VII was launched to show AMD is still a player in the high-end video card, and not as an economically viable solution.

A big part of the problem is the HBM2, this stacked memory reportedly costs as much as $320 per card:

As previously stated, the 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 BOM number, the memory costs almost half of the whole card. Having a card with 8GB would significantly reduce the bill of material cost, but it would involve new engineering costs to design such a card and AMD would have to repackage the Vega 20 and create a package with 8GB (2x4GB HBM2) chips instead of the existing 4x4GB HBM2. When AMD sells Instinct MI50 / Mi60 card for $8,000 to $10,000 there is plenty of margin to make on the card, but the company knows that not too many people will buy an AI card. This is a totally different market compared to gamers. The memory spending is hard to justify for the gaming card.

Take it with a grain of salt, but it looks like this is Radeon RX Vega all over.