Advanced Micro Devices, Inc. (NYSE:AMD) Likely to Drop GPU Prices Ahead of ‘Tonga’ Launch

According to rumors the next mid-range discrete GPU offering of Advanced Micro Devices, Inc. (NYSE:AMD) may hit the market as early as next month. AMD stock logged its fifth green day in a row on Wednesday, closing 0.7% up, having put 28 cents in this green run.

Yesterday multiple news outlets informed that the chipmaker is gearing up to launch its new ‘Tonga’ GPU, with PC Gamer informing of ‘rumors’ that this may happen as early as next month. The GPU that the Tonga is supposed to succeed is the Tahiti architecture R9 280 – a fairly powerful mid-range GPU that was announced back in early 2014.

Despite its impressive performance in the mid-range market segment, outperforming NVidia Corp. (NASDAQ:NVDA)’s GTX 760 in a few areas, the R9 280 runs much hotter and draws nearly 50% more power. Both the standard and X version of the R9 280 are still using Tahiti architecture which hit the market in January 2012. As a WCCF Tech article stated, it’s likely time for AMD to move forward. AMD will probably introduce a mid-field Tonga GPU that can beat the 760 by a sizable margin and still remain competitively priced when compared against NVDA‘s GTX 770. Price cuts to existing R9 280 variants are expected to be in the $20 – $30 range.

Speculation concerning the actual specs of the Tonga card focuses mostly on improvements of the performance per watt and lower load temperatures, with no expectations of anything dramatically different in terms of clock speeds and processing units.

The discrete GPU segment has slowed down for both AMD and NVDA, with shipments down in the first quarter and expected to take another hit in the second. Whether further turmoil in this field will have an impact on AMD‘s share price remains to be seen.

AMD is currently trading another 1.3% up in the early session.