Global Graphics Card Shortage
By: Jacob Jiang
Have you wondered why Graphics Cards recently are so expensive compared to how much they cost months ago? Here’s an example, the NVIDIA RTX 3080, which is a really high-end graphics card, as a reference, the RTX 3080 could get up to 500fps on Valorant. It cost around $700 at the initial release for the Founders Edition, now, it costs more than $1,300 dollars. This problem is the Global GPU Shortage, which is not only present in the U.S. but is a worldwide problem where Graphics Cards are extremely low in stock. Usually, if you can find a good Graphics Card such as the NVIDIA RTX 3000 series or the Ryzen RX 5000 series at a retailer such as Amazon or Newegg, they’re usually sold out straight away.
Photo credit: Amazon.com
This has to do with the Pandemic going on with everybody working from home, and also comes as a lot of people are trying to mine cryptocurrencies such as Bitcoin or Ethereum. Over the pandemic, a lot of people have been purchasing high-end graphics cards such as the RTX 3080, 3080 Ti, and 3090s for crypto-mining, some people have mining rigs as expensive as $100,000 because they’ve got more than 75 RTX 3080/3080 TIs.
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Because of COVID, the increase of crypto miners in the U.S. has gone up by a huge chunk, to be more specific, in July of 2020, only 4.2 percent of crypto miners are from the U.S, now, there are more than 25% (https://www.statista.com/). And according to wepc.com, hungry miners are buying mid-to-high-end GPUs as soon as they become available, rapidly emptying stocks and driving up prices as far as two times MSRP. Mining can often be torture for a GPU as well, running it at full capacity 24/7, often resulting in these GPUs being burnt out much more quickly than they would in a normal gaming PC. Now overclocking the rig, could decrease the GPU lifespan even more, only lasting around 3-5 years compared to a non-overclocked GPU which could last around 5-7 years. Cryptocurrency mining has been going on for several years now, but 2020 saw the demand for miners reach critical levels, exacerbated by the COVID-19 pandemic as people saw alternative income streams and were drawn in by the rising price of Bitcoin.
The number of gamers and active PC users has also increased by a significant amount since the pandemic began, an increase of 400 million gamers (https://financesonline.com/) making the supply of GPUs even thinner. A lot of people have pre-ordered the GPUs by NVIDIA in their RTX series when the pandemic struck, and it doesn’t seem to end there either. According to NVIDIA’s CFO Colette Kress, the NVIDIA GPUs are going to ‘Bottom out in the second half [of 2022], it will take another one to two years before the industry is able to completely catch up with the demand. NVIDIA is about to release 4000s Graphics Cards and a lot of people are definitely going to pre-order a lot of them as the price should be a bit lower. Unfortunately, this will only make the GPU market worse because NVIDIA is going to sell out really quickly.
But you still might wonder, what is the root cause of all this, well it's quite simple, there aren’t enough silicon chips and silicon. Pure silicon is the basis for integrated circuit boards, semiconductors, chips, graphics cards, computers, and video game consoles. This was present even before the pandemic, but not on a scale as large as this. As COVID has put a snowball effect on the issue. Because there are fewer workers in the factory, and with online/distance work/learning, the demand for computers and graphics cards is spiking while the supply is plateauing. According to TechRadar, NVIDIA’s CEO Jensen Huang came in an interview with Yahoo Finance, in which he observed: “I think that through the next year, demand is going to far exceed supply. We don’t have any magic bullets in navigating the supply chain.”
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Now, with the Ukraine-Russia war going on hot, the supply of neon is also dropping, which experts say could potentially worsen the situation. According to Wikipedia, Ukraine produces about half of the global neon supply as a byproduct of the Russian steel industry and 90% of the semiconductor-grade neon used in the United States. Semiconductor manufacturers have searched for alternative suppliers, such as noble-gas manufacturers in China, but any new supplier would take at least nine months to increase production. The supply of krypton and xenon, of which Ukraine is also a major exporter, was affected as well.
However, there’s still hope for people out there, because a lot of people don’t need a high-end graphics card just to code or attend meetings. They could buy lower-end, older, or used graphics cards, which do not cost a billion. There are also ways that people could resolve the problem. For instance buying a prebuilt PC, instead of custom ones that gamers, streamers, and video editors crave. Specialist prebuilt PC retailers such as iBuyPower, CyberPowerPC, and Origin will give you the best performance for the money.