Why Is There A Graphics Card Shortage?
If you have tried to upgrade your computer since the beginning of 2020, you may have noticed the sometimes-obscene price of graphics cards and in this, you would not be alone. For some time to come, expect to pay a premium price for almost all graphics cards, especially those at the higher tier. Below, we will discuss why this has happened and more importantly, when we can hope for prices to stabilize for good.
Global Chip Shortage
While there is no one problem that has caused this, the global chip shortage is definitely the biggest roadblock we have faced. A few things combined to make the global chip shortage as severe as we have seen since the start of 2020
- Forecast – The first big problem was the forecast of how many chips would have been needed in 2020. Global chip manufacturers catered for a small increase in chip demand, some not changing production rates at all going into 2020. While this would have been perfectly fine for any other year, going into 2020, it was not.
- Pandemic demand – The pandemic has caused many issues and it’s a double-sided sword effect for chip manufacturing. With many people being forced to work from home, they needed equipment with which to do their work. Laptop sales alone saw more than a 40% increase in the first half of 2020, the surge in demand was unprecedented, putting massive strains on the factories that there are.
- Pandemic supply – With the ever increased demand, one would hope that the factories were all operating at 100%, unfortunately this is not the case. Many of the factories were forced to temporarily close unexpectedly with lockdown restrictions. The factories that were able to continue production faced extreme difficulties in sourcing material, conducting maintenance and delivering the product. Every step of the process was made more difficult, resulting in a lower number of chips being produced.
The global chip shortage did not only hurt the manufacturing of chips, but all aspects of the business.
While there is still some contention as to how much of an effect crypto mining had on the supply of new graphics cards, it did definitely have an effect. Cryptocurrencies, specifically bitcoin, seeing a large spike in price in early 2020 and quadrupling in value during 2020, caused a large amount of new and existing cryptocurrency miners to buy nearly all the graphics cards that were available. Mining became as popular an online hobby as when you visit blacklotuscasino.com.
With the ever-increasing demand for graphics cards from miners, gamers and people needing them for home workflow, many people saw an opportunity to buy up any stock they could find and sell this stock at a hugely marked up price. Scalpers became a large issue to the graphics card industry as a whole. When Nvidia launched the new 30 series in late 2020, it took less than five minutes for Nvidia to reach capacity on the first wave of orders. Many scalpers used bots to buy up cards as quickly as they could to resell on eBay, Amazon and similar reselling sites. While the scalping has calmed down, it is still on going for the flagship Nvidia cards.
Demand has calmed down but is not at a point we can call it stable yet. From expert’s best estimates, the chip shortages should be completely over during 2023. To aid in this, TSMC has already started construction of a new manufacturing plant in the USA, along with Intel, who are proposing two new plants to be built in the near future.