The world graphics card crisis and its relationship to cryptocurrencies and COVID-19

The computer market has fallen into a “price storm” due to the skyrocketing price of many components, of which the shortage of graphics cards is one of the main reasons.

Graphics card (GPU – Graphic processing unit) is a type of device that specializes in processing information about images in a computer, such as color, resolution details, contrast of images… Price Graphics cards often fluctuate according to demand, while the price of RAM goes up and down like a roller coaster that makes owning a computer very difficult for many people.

Volatility in retail prices of some lines of graphics cards

Crisis from a few years ago

Since a few years ago, the graphics card market entered a crisis. For those who are “nostalgic”, looking back at the price of graphics cards in the past compared to today’s prices is like a nightmare. Although there was a time when the price cooled down, after China tightened the mining operation, causing the old GPU to be fully sold in the market, helping the price of new GPU also cool down.

However, the heat soon returned, and industry insiders predicted the market’s “problems” were far from over.

GPU prices in China are rapidly increasing again due to reduced supply. A similar situation occurs in other countries.

According to MyDrivers, the price increase in China is due to a decrease in GPU imports. The problem is particularly acute with Nvidia’s RTX 3060, which has a 50% drop in supply and is not expected to improve in the short term.

MyDrivers tracked component prices from several AIB partners, including Asus, Gigabyte, and MSI. Some of the gains aren’t too significant — the Gigabyte GTX 1050 Ti is up just $12 — but others are huge: the Asus RTX 3070 Ti is being quoted as $92, or a 15% increase in a short period of time. , but also not in stock.

Price of graphics cards sold on Ebay from June to August 2021

The used GPU market is also experiencing a similar situation, as prices on eBay in August simultaneously increased, although the increase was lower than the price of new cards.

Follow the full story of the graphics card market below to understand why and how the state of the market is especially important in this modern life.

Usually, the price of a particular graphics card is affected by the quantity supplied more than the other components. The two famous companies that produce graphics cards in the world, Nvidia and AMD, only produce a small part of GPUs globally themselves, in fact they only produce their main line of cards at the time of launch, while the original version of the card is only produced by the company itself. GPU designs will be sold to partner companies to create more options for buyers, and that’s why GPU prices are lower than when they first came out. This approach gives users many options, but makes the price of the GPU inconsistent, and is one of the reasons for the current GPU shortage.

In 2015, Asia experienced a shortage of Nvidia GTX 980 and GTX 980Ti cards. The main reason was due to the limitation in the supply chain, while the demand increased in this area, pushed the price up 15%, but then the market quickly stabilized again.

By 2017, the market fell into another shortage, especially the Nvidia GTX 10th generation and AMD RX 500 series cards. This was caused by the anticipation of the price of the Ethereum virtual currency increasing. That was one of the reasons for the GPU shortage at that time, which lasted for many years, until today.

Past figures show that GPU shortages are inevitable. However, until now, when the market for gaming computers has grown at an alarming rate, because the COVID-19 pandemic has forced everyone to stay at home, making the GPU shortage even more serious.

On March 11, 2020, the World Health Organization (WHO) declared a COVID-19 pandemic, with everyone having to leave the office to stay at home, causing the need to use computers to increase. In 2020, the global PC market grew 13.1%, the highest since 2010, when the market grew 13.7%. The demand for computer users is increasing, creating opportunities for the expansion of the computer business market.

At the same time, a shortage of semiconductors began to arise, which is causing many sectors, such as automobiles, to fall into a deadlock from which there is currently no way out.

Supply chain disruption

Normally, component companies such as AMD and Nvidia would need a large amount of raw materials before they could start production, but the pandemic has disrupted supply chains and led to shortages of semiconductor materials. when component manufacturing companies still have to work at full capacity, causing prices to be pushed up.

On September 17, 2020, Nvidia launched the RTX 3080 series of cards to the market in a state of extremely high GPU prices. The series of products offered for sale were quickly sold out, leaving many people only able to buy them in the form of used goods. There are many profiteers taking advantage of the high price of the card and strong demand, so as soon as the new GPU line was put on sale, they started looking for ways to buy and hoard GPUs, in ways such as through virtual accounts. , automatic trading account.

On September 26, 2020, the US Department of Commerce imposed a limit order on SMIC – China’s leading semiconductor manufacturing company. That forced American semiconductor manufacturers to switch to other companies such as TSMC in Taiwan and Samsung in South Korea.

The trade war between the US and China began in 2018, from restricting technology products such as solar panels and household products, then adding other sanctions, but requiring restrictions on The limitation on SMIC was considered the biggest problem at that time when the GPU supply was already in a tight situation.

On October 28, 2020, AMD began to announce the GPU line using RDNA 2 technology with the RX 6800XT, 6800 and 6900XT series, to compete with Nvidia in performance and Ray tracing technology for the first time. first appeared with AMD products, hoping to be a solution to the shortage of graphics cards.

However, like Nvidia, the number of products in stock immediately sold out in just a few minutes. Before that, AMD itself announced that there would be enough supplies for at least a week. However, the majority of the cards are still in reseller inventory, and can only be purchased as used GPUs, similar to Nvidia’s a month ago.

At the end of 2020, the virtual currency market exploded with skyrocketing prices, contributing to the shortage of GPUs even more serious. This boom started in October 2020, but in fact, the demand for miners has been around since the beginning of the shortage of GPUs.

The fact at that time reminds that the GPU market has happened many times in the past, associated with the fluctuations of the virtual currency market, when in 2018 the price of Ethereum skyrocketed, by 2020 the value of Ethererum and Bitcoin sudden increase (in October 2020), attracting a lot of investors to jump into the virtual currency market.

By early 2021, the GPU market is still in a tight spot, with supply still falling and demand still rising. Companies started to come up with solutions to improve this situation. Many rumors for Nvidia began to allow the production of old cards, such as RTX2060, MSI re-manufactured the GT730 series of cards, to compensate for the supply shortage chain.

Companies that manufacture under AIB, considered the main market for GPU production, began to update their prices accordingly, in late 2020 and early 2021, prices of AIB units were pushed to unprecedented heights, causing the graphics card to be sold at double the price listed at the dealer, which coincides with the sale price in the used market.

By the end of February 2021, Nvidia has had a solution to combat the shortage of GPUs by reducing the ability to mine virtual currency through the LHR line of cards, and announced the CMP card line, specialized for mining virtual currency and without. image rendering function, to ensure the Geforce line of cards reaches the hands of gamers.

In March 2021, Nvidia announced the RTX 3080Ti and RTX 3070Ti lines of cards, but the sale plan will be different than usual, Nvidia announced the RTX3080Ti series of cards will be sold exclusively through Bestbuy, to solve the problem of buying and selling via virtual and automated accounts.

At the same time, the founder of Ethereum announced that it would switch from proof of work to proof of stake to reduce power consumption, which could eliminate the need to use GPUs to mine virtual currency, reducing the need with new series of GPUs. In addition, the price of Bitcoin and Ethereum showed signs of decline, in which China, the country considered a virtual currency mining center, began to issue orders to limit mining virtual currency, contributing to making the market less dry. rare.

However, the appearance of the Delta variant virus, the Covid-19 pandemic continuously entered new outbreaks, causing the supply chain to tighten once again, while the demand was still constantly increasing, which is the reason. causing graphics card prices to go up again.

With the current situation, the graphics card crisis is not expected to end anytime soon.

References: Digitaltrends, Techspot, Techradar