Sunday, July 18, 2021

What Affects GPU Prices?

If you’ve wanted to build a PC in the past year, then you definitely know how hard it is to purchase a GPU and, at the same time, find a budget even to buy one. GPU prices skyrocketed the past year, and you couldn’t even get your hands on one. Whether you are looking for the newest RTX card or even an older one, all of the cards on stock lately have inflated prices and limited availability.

In simple terms, though, the current demand for graphics cards is more than the supply available. Why did this happen? Let’s find out.

Global Chip Shortage

There is a shortage of chips in the entire world, not just for graphic cards but also for all semiconductor chip devices. Chips are used in all sorts of things, from washing machines to airplanes and of course your computer. So there is a huge demand for anything with chips in it that the supply can’t keep up.

Some experts believe that the global chip shortage will reach 2022 and beyond. Others are more positive about the current situation, but they all agree that this won’t end anytime soon. As a result, companies like Intel are planning to open new chip factories to keep up with the demand.

COVID-19 Pandemic

The demand for chips is also due to the pandemic. In addition, more people need electronics as they evolve into work-from-home setups.

People suddenly require products not just for work but also for entertainment. From devices like computers, smartphones, tablets, webcams, TVs, and many more, this has increased the demand for chips.

This leads to the demand for graphics cards, as manufacturers scramble to find supplies for their graphics cards and the like.

Another effect of the pandemic is broken supply chains. The lockdowns in many countries and cities worldwide have halted the number of imports and exports allowed to come through. As a result, many suppliers cannot fulfill their orders or have completely avoided certain countries or cities that are risky or in lockdown.

This causes consumers to find sources for their graphic cards elsewhere. They turn to online sites where, of course, sellers hike up the prices as they too can’t get enough supply to sell at a lower cost.

Cryptocurrency Miners

If you were to ask someone why graphic card prices are so high right now, one of the first things they will tell you is that it is because of miners.

Crypto miners need graphic cards for their mining rigs, which are computers used for mining Bitcoins or other cryptocurrencies. Crypto miners hoard these graphic cards, too, especially the high-end ones. Mining rigs are also not just one computer alone, as there are farms built to house hundreds, if not thousands, of rigs used for mining cryptocurrency. The demand for graphics cards for these mining rigs also contributes greatly to the shortage of graphic cards in the market as these miners hoard these cards.

You may also want to avoid people selling their mining rigs or, specifically, the graphic cards that come from these rigs, as these are cards that are overworked or overused. Many of those GPUs might already be damaged, so buy at your own risk.

Scalpers Selling Overpriced GPUs

Scalpers are around in any market. Specifically, in the graphics card market, many sellers use bots and wait in line when graphics cards come out at lower prices and buy them immediately and then sell them at exorbitant prices. These scalpers also contribute to the crowded demand for GPUs.

Should you buy a GPU today?

There’s a silver lining as currently, GPU prices are going down. So there might be a chance for you to snag a graphics card at a reasonable price today. Let’s first talk about the reasons why GPU prices are going down.

First, cryptocurrency isn’t as bullish as it once was a few months ago. When the current generation of GPUs was released last year, it coincided with the rising crypto market. As a result, prices for cryptocurrencies were going to an all-time high in that time period. Now, the crypto market isn’t as high anymore, and prices, especially Bitcoin, have come down to lower levels, and people have been hesitant to invest once again. So miners aren’t taking advantage of the market anymore, so the demand for GPUs isn’t as high as it once was.

Mining profits are down, so there are more GPUs available now in the market at lower prices.

NVIDIA is also doing its part in helping curb the mining craze. They’re releasing LHR GPUs meaning Light Hash Rate. These GPUs cut mining rates, specifically Ethereum hash rates, by half. So these GPUs are more readily available than the previous generation.

Lastly, production is already ramping up post-pandemic. Chip production and manufacturing facilities are starting to open fully once again. In addition, workers are now going back to work after being stuck at home for most of 2021.

In the end, if you’re in the market to build a PC for work or gaming, you can probably find the latest graphics cards in the coming weeks or months at a reasonable price. Don’t expect them to be at SRP, though; graphic cards will still be in high demand and will still be priced higher.

Hopefully, the trend continues, but as of now, we don’t know. It might be a good time to gauge the market and see if you can snag one for a good deal while the prices are going down. You never know, another shortage may be on the horizon, and GPU prices will once again be back up.

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