WEBVTT 00:00:00.000 --> 00:00:03.560 Man, you know what really melts my popsicle? 00:00:03.560 --> 00:00:07.760 Paper launches. You know, when a much anticipated piece of tech 00:00:07.760 --> 00:00:11.240 finally arrives, but you can't even buy it anywhere. 00:00:11.240 --> 00:00:17.080 And it's not even like these big tech companies like NVIDIA and Sony don't know how much stock they'll have. 00:00:17.080 --> 00:00:20.680 So why do paper launches even happen? 00:00:20.680 --> 00:00:25.080 Well, even though a company might be aware it's facing a stock shortage at launch time, 00:00:25.080 --> 00:00:31.400 they often go through with the planned launch date anyway to build up hype for a product by way of comparison. 00:00:31.400 --> 00:00:37.440 You see the term paper launch comes from the fact that the product's release is only talked about on paper. 00:00:37.440 --> 00:00:42.880 That is, review samples are sent out to select reviewers who can then write about how awesome the product is, 00:00:42.880 --> 00:00:47.680 especially compared to the competition. And the favorable reviews will help drive demand 00:00:47.680 --> 00:00:51.520 before the product actually hits store shelves en masse. 00:00:51.520 --> 00:00:57.640 For example, in 2003 when AMD released their groundbreaking Athlon 64 CPU, 00:00:57.640 --> 00:01:02.480 which was the first consumer x86 CPU to feature 64-bit processing, 00:01:02.480 --> 00:01:07.680 Intel quickly responded with a paper launch of their Pentium 4 Extreme Edition. 00:01:07.680 --> 00:01:12.880 The new Pentium 4 was given to tech reviewers months before you or I could buy one. 00:01:12.880 --> 00:01:16.880 And while it did beat out the Athlon 64 in many benchmarks, 00:01:16.880 --> 00:01:22.840 the timing made it seem like Intel was desperate to get a product out to steal AMD's thunder 00:01:22.840 --> 00:01:28.040 as well as the performance crown, rather than getting chips in gamers' hands, 00:01:28.040 --> 00:01:31.200 people who want them. 00:01:31.200 --> 00:01:34.840 And to make matters worse, some paper launches are never followed 00:01:34.840 --> 00:01:39.400 by a real large-scale launch at all, which can happen if the company encounters 00:01:39.400 --> 00:01:43.720 manufacturing problems that they hope they can fix before the launch window closes. 00:01:43.720 --> 00:01:48.280 One example of this is Intel's Canon Lake CPUs, which came out in 2018. 00:01:48.280 --> 00:01:52.120 Canon Lake was a 10-nanometer chip, and by the time it launched, 00:01:52.120 --> 00:01:57.320 Intel's issues with getting its 10-nanometer process to work were well-documented. 00:01:57.320 --> 00:02:00.560 Despite Intel's ambitions, Canon Lake processors only appeared 00:02:00.560 --> 00:02:05.720 in a very limited number of laptops and Nux before being discontinued completely. 00:02:05.720 --> 00:02:11.280 In the end, the launch was mostly just for Intel to show that they could get a 10-nanometer chip to market, 00:02:11.280 --> 00:02:14.840 even though we didn't see a large-scale release of 10-nanometer processors 00:02:14.840 --> 00:02:18.320 until the later Ice Lake and Tiger Lake generations. 00:02:18.320 --> 00:02:21.640 All right, so many consumers understandably frustrated 00:02:21.680 --> 00:02:25.120 with short supply and high prices for new consoles and GPUs, 00:02:25.120 --> 00:02:30.760 labeled the launches of items like the RTX 3080 and the Xbox Series X as paper launches, 00:02:30.760 --> 00:02:34.800 but this isn't really accurate. After all, it wasn't just reviewers 00:02:34.800 --> 00:02:39.720 that got their hands on these products. There was enough supply for regular people to buy them. 00:02:39.720 --> 00:02:43.600 It was just the demand significantly outstripped supply. 00:02:43.600 --> 00:02:47.960 Of course, this doesn't mean that the NVIDIAs and Microsofts of the world are without fault here. 00:02:47.960 --> 00:02:53.080 It just means that the situation didn't meet the strict definition of paper launch. 00:02:53.080 --> 00:02:57.240 But the shortages did come at a really inopportune time for both companies 00:02:57.240 --> 00:03:01.440 and consumers alike. The pandemic resulted in a surge of interest 00:03:01.440 --> 00:03:06.840 NVIDIA games since we were all stuck at home, and once one company rolled their product out, 00:03:06.840 --> 00:03:11.600 their competitor couldn't just sit around and do nothing. I mean, imagine how bad it would look for Sony 00:03:11.600 --> 00:03:17.500 if they were still using the PS4 to compete with the new Xbox Series's lineup. 00:03:17.500 --> 00:03:21.380 And on top of that, fab capacity worldwide has been running out 00:03:21.380 --> 00:03:24.980 for a few years now. Demand just keeps on going up for chips, 00:03:24.980 --> 00:03:30.820 not just for consoles and gaming PCs, but for phones, IOT devices, cars, you name it. 00:03:30.820 --> 00:03:36.260 And all this demand has meant that many fabs have been operating at close to 100% capacity. 00:03:36.260 --> 00:03:41.140 The good news though, is that several large chip makers have big expansion plans in the works 00:03:41.140 --> 00:03:44.700 that should result in a 20% or even higher increase 00:03:44.700 --> 00:03:50.620 in worldwide fab capacity in about five years time for chips built on a 10 nanometer or smaller node. 00:03:50.620 --> 00:03:55.020 So hopefully, paper launches and other shortages won't be as common in the near future, 00:03:55.020 --> 00:03:59.420 and you won't get ripped off on your PC and your Yeezys. 00:03:59.420 --> 00:04:04.060 Do one or the other, you gotta pick one, scalpers! 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