The shortage of graphics cards seems well and truly over. As cryptocurrency miners resell their hardware, the price of GPUs continues to crash.
The price of graphics cards continues to fall. As shown by the data collected by our colleagues from The Verge, the price of most GPUs collapsed in the retail and second-hand market.
On eBay, the price of the majority of graphics cards has halved since January 2022. Between April and June, the rate contracted by 30%. After months of chronic shortages, the price of GPUs has finally moved closer to the manufacturer’s suggested retail price. Note that some AMD and Nvidia cards even sell below the suggested retail price.
For example, the RTX 3090 is priced at $466 less than Nvidia’s recommended price, down 60% from January. AMD’s RX 6900 XT has a $316 discount on eBay, down 55% since the start of the year.
A year ago, the price of components had already started to drop. The cost of certain models had been greatly reduced in the space of a few weeks. For example, the price of an RTX 3070 card had dropped by 500 euros in one month. Nevertheless, the prices displayed remained well above Nvidia’s suggested retail price. Despite better general availability, many AMD and Nvidia SKUs were still untraceable.
Read also: $15 billion worth of graphics cards, the splurge of crypto miners since 2021
Towards an explosion in GPU demand?
In this context, we can estimate that the shortage of graphics cards is finally behind us. According to Colette Kress, chief financial officer of Nvidia, the group’s supply chain has also “almost normalized”. The company expects the balance between supply and demand is maintained during the second half of the year.
According to Anshel Sag, financial analyst at Moor Insights & Strategy, demand for graphics cards is now likely to explode. “There is a lot of pent-up demand coming from gamers and consumers who have held on for the past couple of years,” explains Anshel Sag, interviewed by The Verge. The expert believes that inflation and the imminent arrival of new generations of cards, like the RTX 4090, 4080 and 4070, won’t dampen the interest of gamers. For the record, Nvidia will present its new cards in October.
“You have to remember that for many of these consumers, this is their primary source of entertainment and socializing”underlines the analyst.
Nevertheless, it could be that Nvidia and AMD have overestimated the demand for the next few months. According to a report from Digitimes, the two groups have reduced their graphics card orders from TSMC. In particular, AMD has asked TSMC to produce 20,000 fewer discs of semiconductor material in the first quarter of 2023. AMD and Nvidia currently have a large inventory of components in anticipation of the next few months. Both firms would suffer from second-hand market competition and the disinterest of mining farms.
The sharp drop in the cost of GPUs is in fact essentially due to the crash of cryptocurrencies. In June, the crypto-asset market suddenly crashed. As Bitcoin’s price slipped below $20,000, a slew of ecosystem firms are meeting liquidity problems. Some companies, such as Celsius Network, are on the verge of bankruptcy.
Under these conditions, cryptocurrency miners record a sharp decline in profitability. In an attempt to recover their costs, many of them sell their equipment on the second-hand market. In China, some sites are inundated with ads for used GPUs.