Prices and demand for graphics cards are at an all-time high owing to a number of factors, and it doesn’t look like they’ll decrease anytime soon.
As a result, all the fun tech gadgets that depend on these cards to function have become overpriced. Even if you could afford to shell out top dollar for your favorite graphics card, you’re still not guaranteed to get the product right now!
The primary reason behind the soaring price of graphics cards is the unbalanced equilibrium between demand and supply. Other factors contributing to this price hike include chip shortages, government imposed customs tariffs, and the well-documented crypto boom.
Simply put, the number of GPUs that are currently being produced is not enough to go around.
At some point in 2020, purchasing premium models of GPUs became so difficult that customers had to join a virtual queue just to hope for a chance of to get one.
With that said, gamers, computer users, and tech fanatics are wondering: “Will prices will come back down to something reasonable anytime soon?”
It’s a complicated answer that’s both yes and no, and even a “maybe” thrown in for good measure.
We understand that you might have even more questions such as:
Why is there a shortage of GPUs?
Why are graphics cards expensive?
Will prices ever revert to normal?
Dealing with these price increases is a complicated question, so let’s unpack everything you need to know about why graphics cards are so expensive right now in the rest of this article and answer all your questions.
Real quick: before we get too far along here, if you want to get more great ideas for your gaming room or home office and connect with other home office hackers to make your space the best join my free private Facebook group, Battle Station Setup here.
Why Are Graphics Cards Expensive Right Now?
The graphics card market is at an all-time high right now.
There’s more demand than ever and when demand increases as it has, you can count on prices for these devices increasing too.
To unravel the mystery behind why graphics cards have become an expensive commodity, we have to refer to the good old Economics principle of demand and supply and other factors. Let’s examine them.
Coronavirus Induced Demand
The worldwide pandemic cause by the outbreak of COVID-19 and all its multiple variants has sparked a remarkable rise in the number of remote jobs and remote workers alike.
This has, in turn, triggered an increase in demand for personal electronic devices such as computers, workstations, mobile phones, and embedded systems.
But at the same time, there is less labor available to manufacture the cards, which compounds the problem.
Not to mention the ever-present demand from gaming enthusiasts to own the latest gaming rigs. It’s this domino effect that has sent the prices of video cards over the roof.
In summary, customers are demanding more graphics cards than Nvidia, Intel, Asus, and other GPU manufacturers are able to produce.
Silicon-based semiconductor chips are the literal brains behind all the high-tech futuristic innovations introduced to us by the day.
From graphics cards to Smart TVs to mobile phones to refrigerators, microwaves, washing machines, cars, and even Elon Musk’s space rockets – all are efficiently powered by these tiny giants called chips.
And manufacturing costs have increases just like everything else has too.
For instance, an average passenger vehicle will require around 1,000 semiconductor chips to function properly.
The chip shortage we’re experiencing is so severe that General Motors, one of the world’s biggest car manufacturing companies, reportedly lost $2 billion as a result.
AlixPartners, a renowned financial advisory and global consulting firm predicted last year that the semiconductor shortage would cost the automotive industry $210 billion as a whole.
And that’s just the automotive industry.
That doesn’t have anything to do with any other electronic device like a gaming PC, a mobile tablet, or any other electronic gizmo.
As expected, all the world’s biggest chip plants are working overtime to fix this issue, but it’s safe to say their efforts are not enough just yet.
US Government Tariffs
Former US President Donald Trump introduced new tariffs on all the goods imported from China, which has lead to a surge in the price of many electronics products including graphics cards, because for the most part, all that stuff (including graphics cards) are manufactured in China.
In return, China retaliated against those trade actions by imposing tariffs on American exports like soybeans, pork, and other agricultural products.
Even though it was implemented by Trump, who was wildly unpopular for many people, the much more popular new president, Joe Biden, has kept those tariffs in place.
Unfortunately, it’s not presidents who have to pay those bills.
So the tariffs, along with the international shipping costs, and a variety of other expenses incurred by doing business overseas, are paid by American importers who have no choice but to pass along that cost of doing business to end consumers who purchase the product.
The Crypto Rush
2021 brought about some incredible new levels of crypto adoption across the world. Consequently, the number of crypto miners surged astronomically.
But what is one of the key components of a crypto-mining rig?
If you guessed graphics cards, you’d be right.
In order to mine crypto, you need first to own a mining rig. These mining rigs are also powered by GPUs, meaning a massive number of crypto miners who entered the already crowded graphic card market to shop for graphics cards started buying up cards at an alarming rate.
But that’s not all; crypto miners tend to always want the best available GPUs in the market because the better graphics cards, the better their mining speed owing to an increase hash rate.
When it comes to configuring a crypto-mining rig, crypto miners appear to be already using next-gen card technology, like Nvidia GeForce cards.
These cards, which are cutting edge and brand new, is also extremely popular with with gamers because the create an unbelievable gaming experience for their users.
This further contributed to making graphics cards the hot commodity that it is today.
Profit Hunting Scalpers
On top of the legitimate increased demands by consumers to buy graphics cards, scalpers have also squeezed their way into the heavily congested market with hopes of emerging with financial rewards.
It’s not uncommon to see people buy up the stock of a high in-demand product, then resell it online at a place like eBay.
Think about the Christmas rush that comes annually with the latest toy craze that parents are fighting with each other to buy for their kids.
Same kind of scenario is what’s going on here.
Someone clears the shelves of all the graphics cards available for sale, wherever they can find them. Then it’s off to resell those same cards at a huge mark-up, because it’s that person becomes the only place you can get them.
As you would imagine, this is one of the biggest reasons for the price hike that has bedeviled the graphical card market in recent months.
Why Are Graphics Cards So Expensive In 2022?
The new year didn’t bring with it a bunch of hope that the skyrocketing price and scarce availability of graphics cards would come back down to earth.
Even though it’s a new year, we’re still dealing with the same inflated price problems that plague the graphics card industry.
And it’s not just the graphics card industry.
Want to know why?
In addition to the the supply and demand bottlenecks we have already talked about, you can add to that the drought catastrophe that gripped Taiwan in late 2021 the effects of which still linger into 2022, and the devastating fire at Japan’s Renesas Electronics chips manufacturing plant.
Taiwan and Japan are both world leaders in chip manufacturing and these two instances alone have done substantial harm to supply chain for powerful graphics cards and hampered the ability to produce them.
So as you can see, there are many factors contributing to the current state of affairs in the graphics card market.
Will Graphics Cards Prices Revert Back To Normal?
Nowadays, it doesn’t matter whether you’re in the market for old GPUs or the next-gen card cutting edge variants – as long as the product you’re looking to buy is called a graphics cards, you’ll likely continue to pay top dollar for some time.
The bad news is the situation doesn’t seem like it will ease off anytime soon. In February 2021, President Joe Biden signed an executive order to launch a 100-day investigation and review into the supply chains of key products including semiconductors, and advanced batteries, with the hopes of finding a lasting solution.
“We need to stop playing catch up after the supply-chain crisis hit. We need to prevent the supply chain crisis from hitting in the first place,” President Biden said.
These processes are supposed to ease off the situation. However, experts warn that the siege is set to continue for the foreseeable future.
According to DigiTimes, an Asian daily newspaper for semiconductors, electronics, and computers, graphics card prices are set to rise even further in 2022.
Are There Any Alternatives To These Graphics Cards?
The graphics card is the heart of your computer. It’s what makes it run, and it’s also responsible for rendering all those pretty pictures you see on websites like this one. But there are a lot of different types of graphics cards out there, each with their own strengths and weaknesses.
The bottom line is that the demand for a high performance graphics card is uniform across the market these days, and the price for graphics cards doesn’t look to be coming down anytime soon.
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