Why and how much have video cards become more expensive?
As noted>
And although these data are given for the American market, nevertheless, they generally reflect the current state of the industry (including in Russia, Belarus or Ukraine). Some sources report that new arrivals of video cards to stores are “closing” orders for the fall. You may be lucky if the buyer does not pick up your order within 2 days - then it will go on sale. There is also an opinion that some batches do not even arrive in stores, as they are intercepted by “well-connected” miners and outbids.
What are the reasons for this situation?
Bitcoin growth
The second half of last year turned out to be incredibly successful for the first cryptocurrency. Yes, and for the second one too. The update of the historical highs of Bitcoin and Ethereum could not pass without a trace. The sharp increase in assets led to both an increase in the popularity of mining and an increase in the capacity of those who were already in the know.
Graphics cards have become a convenient target for scalpers and miners. The former began to buy goods en masse at a low price in order to resell them at a higher price, while the latter simply needed new hardware to develop mining.
The graph above shows that particular activity in the growth of value appeared in February 2022. Then Elon Musk said his weighty word (and more than one) in the crypto world. Bitcoin marked even higher levels and continued its growth.
By the way, the shortage of video cards for private buyers has also appeared because large miners are becoming more and more interested in purchasing mining equipment. In 2022, we have written more than once about similar large deliveries of miners from Bitmain.
New Year holidays
Another likely reason for the delays is the Chinese New Year, which is celebrated on February 12. Traditionally, everyone returns home and celebrates the holiday together, so almost all production stops during this period. Taiwan also celebrates Chinese New Year, so TSMC is also stopping production for a while.
In Korea, there is a similar tradition, however, the Korean New Year ends on February 12, and therefore the downtime periods here are slightly different, but they still exist.
As soon as the holidays are over, employees return to their jobs, and production returns to previous volumes of work.
Supply problems due to coronavirus
The coronavirus seems to have hit every industry like a hurricane. China was one of the first to bear the brunt of the new pandemic. However, manufacturers did not postpone the release of the announced models. As a result, many productions slowed down and stopped altogether, and supply and order stories experienced disruptions and downtime.
There was so little equipment produced that even a 100% advance payment could not guarantee that in the near future you would become the owner of new hardware.
The coronavirus also affected gamers, whose demands increased sharply during lockdowns. Many of those who had not played before even began to play. In turn, those who played earlier began to play more. It is precisely this area that was able to profit from self-isolation, lockdowns and remote work.
Why are video cards shaking so much in 2021?
There is only one reason for the rise in price - shortage. But its occurrence was influenced by several factors at once.
Initially, the shortage of video cards was associated with stagnation among leading manufacturers - Samsung and TSMC. Over time, production problems gradually improved. Samsung has already returned to its usual course, and TSMC is still moving in this direction, since the deficit has already formed, and it is impossible to fill it immediately.
The second factor was mining. Thus, modern cryptocurrency traders are buying up graphics accelerators at an unprecedented speed. Moreover, in whole batches and directly from suppliers, not allowing them to even reach store shelves. All that gets there is a GeForce GT 710 or GTX 1030, etc.
Mining on video cards is more than profitable. Take, for example, the GeForce RTX 3080. Now you can buy it for 160 thousand rubles, and you can earn yours in just a couple of months.
Therefore, it is not surprising that miners create entire mining farms, and there are practically no high-quality new generation accelerators on the market. And this is how things are not only in Russia. Mining on video cards is a common practice worldwide.
Have all video cards become more expensive?
The current “crypto fever” seems to have affected every video card. Representatives of the crypto community joke that today they have begun to mine even on things they have never mined on before. In times of shortage, this happens in many areas.
GeForce
Since mid-September, scalpers have been reselling the RTX 3080 on eBay for between $1,300 and $1,500, nearly double the original price of $699 to $869, depending on the model. But in recent weeks, prices for in-demand graphics cards have skyrocketed.
Average prices for all RTX 3000 cards on eBay began to rise in February. In the case of the RTX 3080, the cost has risen to around $2,400. The RTX 3070, on the other hand, has surpassed $1,200.
The numbers only started to drop towards the beginning of March, at the same time that Nvidia released its most affordable version of the RTX 3000 series, the 3060, which starts at $329.
“Prices stopped going up right around the time the 3060 launched, so it can't be a coincidence,” says Driscoll. – Not a very big drop, but significant. As for the increase, I have no way of confirming this, but I do know that many employers are paying out year-end bonuses in February and people are starting to file and receive tax returns, which may be causing some of the price increases.”
Radeon
The madness, according to Driscoll, has also spread to the latest AMD Radeon graphics cards. Scalpers on eBay are now selling them for around double the price.
At the end of February, hardwaretimes analysts conducted a study and noted that the Radeon RX 5600 XT was selling close to $700 at that time, which is more than 2.5 times the original recommended price of $269.
When looking at the once-cheap Radeon RX 5500 XT GPU, researchers found that it's no longer all that affordable. Now, in most cases, its cost is $370, which is more than 2 times more than the original price of $169–$179.
The top model RX 5700 XT sells for more than $750, starting from $450-$500. And such a 50% markup does not look so terrible compared to the 2.5 times markup on more “budget” video cards.
Where did the shortage of video cards come from?
The rise in prices for video chips for PCs is just the tip of the iceberg, which affects everyone. The iceberg is called the “semiconductor crisis.” And he jacked up the prices of everything from RAM to cars.
In the CIS, a “shortage” for people is when prices in stores are low, but there is no product. Here the situation is a little different - there is a product, but at very high prices, and even at these prices they are sold out in seconds
The main reason for the shortage was the pandemic - but in a sense that is unusual for us. Yes, at the beginning of 2022, production fell slightly, but by the fall it reached the pre-crisis level and exceeded it. Trouble came from the other side...
Because of Covid, everyone switched to remote work - people worked, studied and had fun mostly online. And if before this one computer and a couple of smartphones were enough for a family, now the needs have increased sharply. Parents are present at the planning meeting on Zoom, the child is sitting in class at the same time, and you also need to buy a tablet for your grandmother so that she can communicate with her friend via Skype...
The demand for any electronic devices, primarily laptops and tablets, has increased sharply. For example, Nvidia's profits grew by 60% in the fourth quarter of 2020! The figures for other electronics manufacturers are less impressive - but there is also growth there. As it turns out, when people are locked inside four walls, they are willing to spend a lot of money on communication and entertainment online.
Don’t forget that every PC/smartphone in the house is also an additional load on the servers of dozens of companies. This means an additional shortage of chips.
Let me remind you that we are only looking at the tip of the iceberg: the shortage of microprocessors and video chips. This is only 15% of the total microelectronics market. More than 50% of companies' revenue comes from other components: memory (from the one installed in your computer to the flash card from the cameras), modems and adapters, interfaces for microwaves and electronic key fobs... And all of them have also risen sharply in price. At the beginning of 2021, Ford suffered heavy losses due to production shutdowns. Do you know what part shortage led to this? One (!!!) simplest microcircuit, the cost of which is a few cents.
Alternatives for miners and gamers
What can all those who did not get the coveted video cards do in the current situation? There are several options.
- Lay low and wait for hardware prices to go down. At the same time, while waiting, you can gradually put aside a certain amount so that at the moment when affordable options do appear on the shelves, you can purchase the best model.
- Flea market. You will have to look for a worthwhile offer on such services, and the risk seems to be great. It's up to you to make a choice. If you decide to take this step, look for an option with a valid warranty.
- When there is no fish (when you really need at least some kind of video card), gamers can purchase the most budget-friendly and out-of-date model, which will not provide comfort, but will allow them to survive in difficult times. Taking what you have is an option for the desperate and those who really need it here and now.
- Gamers can also expect AMD's new crypto mining GPU and CMP line of professional ETH mining chips to somewhat satisfy the needs of crypto enthusiasts. Perhaps then they can look forward to updating their systems.
- A gaming console may be the answer for gamers. Any console is designed specifically for games and is ideally optimized for virtual entertainment.
When will this all end?
I think that after reading this article you already understand that video cards and consoles will definitely not become cheaper this year. Small drops in prices can happen - for example, when in the spring of 2022 China began to actively fight against miners, the prices for video cards decreased slightly, although not for long. But globally the situation will not change for several years.
All semiconductor companies are inundated with orders and operating at near capacity. New factories are just being built - and will begin operation only by 2023-24.
However, the exact answer will be different: no one knows anything. Even analysts strongly disagree in their forecasts of what will happen to the microelectronics market next. Therefore, you can safely write your predictions in the comments - perhaps you will be right.
Don't expect miracles
The names of all three video cards indicate that these are absolutely basic solutions, so you shouldn’t expect achievements in video games and graphics processing from them. According to information provided by Nvidia, the GeForce RTX 2050 and MX570 models are built on a GA107 graphics processor with Ampere architecture, while the younger MX550 accelerator has a TU117 with Turing architecture.
GeForce RTX 2050 carries 2048 CUDA cores, and the GPU frequency ranges from 1155 MHz to 1477 MHz. The card comes with 4 GB of GDDR6 video memory on a 64-bit bus with a bandwidth of 14 GB/s, and its chip thermal dissipation level (TDP) ranges from 30 to 45 W. In addition, the RTX index in the name is an indicator of the presence of support for hardware acceleration of ray tracing. This technology is necessary for rendering realistic graphics in games.
In the MX550 card, the GA107 chip operates at a frequency not exceeding 1155 MHz. It has the same 2048 CUDA cores, 64 Tensor cores and 16 RT cores. The card comes with the same GDDR6 memory on a 64-bit bus, but its capacity is only 2 GB, and the bandwidth is reduced to 12 GB/s. The TDP of the chip does not exceed 25 W.
Key specifications of the new Nvidia cards
Finally, the most budget Nvidia GeForce MX550 card has only 1024 CUDA cores and a clock speed of no higher than 1.32 GHz. The memory parameters and TDP level here are identical to the MX570, and Nvidia does not disclose the number of tensor and RT cores.
Compared to the RTX 3050, the most affordable card in the 3000 series of Nvidia accelerators, all three new products turned out to be noticeably weaker. Only the 2050 came closest in terms of basic parameters, lagging behind in peak GPU frequency and memory bus. On the other hand, its TDP is significantly lower.
GeForce MX550 and MX570 cards received support for DirectX 12 and PCIe 4.0 interface.
Causes
The reasons are actually quite simple.
The first is a weak ruble
. It is the weakness and low reliability of the currency, and not the current exchange rate. Here, for example, is a screenshot from the NVIDIA website for the USA:
699 US dollars is 52,776.25 rubles (at the Moscow Exchange exchange rate as of 02/04/2021 - 14:02 Moscow time). And in Russia, the same card should be sold from 63,490 rubles. Here we have a 20.30% markup. Although, this can be explained by 20% VAT. But the weakness of the ruble still affects prices, and we will never see the recommended ones.
The second is demand due to mining
. You can read more about mining here -. In short, mining is the use of the power of video cards for calculations that make it possible to obtain cryptocurrency, that is, a type of electronic money. But you can’t earn much from one video card, so some people create entire mining farms, which are a system with many video cards. Such farms allow you to make impressive profits, so miners (people who do mining) buy all the video cards suitable for this type of activity, and now there are quite a lot of them. And they say that some miners buy video cards on the way from the factory to the point of sale, and perhaps even from the factory.
Given the huge demand and extremely weak supply (many stores do not have video cards even at very inflated prices), prices have gone up. Ordinary gamers, for whom 30-80 thousand is a lot of money, do not strive to buy video cards 50-100% more expensive, but this does not stop miners, so prices continue to rise, and miners continue to buy them.
