Why are graphics cards so expensive?

However, this is not always the case. What exactly happened to the GPU market? Why are consumers today forced to spend up to several tens of millions of dong for a flagship graphics card?

In today's article, let's find out the reasons why graphics cards are so expensive. Many of these factors are obvious. However, other causes may surprise you.

1. Lack of competition

Why are graphics cards so expensive? Picture 1

The lack of competition in the mid-2010s and early 2020s, especially from AMD, was one of the factors driving the increasing price of GPUs. When NVIDIA launched its Pascal-based GeForce 10-series graphics cards in 2016, the company followed an aggressive pricing strategy as it faced heat from AMD with its RX 300 series of GPUs.

But after this release, AMD failed with the launch of RX Vega in 2017, as none of its GPUs could match NVIDIA's flagship 1080 Ti. And because of this lack of competition, NVIDIA was confident enough to launch the newer RTX 2080 Ti at $1299 in 2018 - at a price significantly lower than its predecessor. Again, AMD doesn't have any cards to compete in the high-end market and is instead focusing on mid-range GPUs.

Two years later, NVIDIA launched the Ampere-based RTX 30 series of graphics cards, with the RTX 3090 at the top of the table with prices up to $1500. And if that wasn't enough, NVIDIA has launched the more powerful RTX 3090 Ti for $2000 in 2022. Although AMD has begun to compete again in the high-end GPU market this time with Radeon RX 6000 graphics cards, NVIDIA still holds the crown in terms of performance.

2. Global Chip Shortage

Why are graphics cards so expensive? Picture 2

Why are GPUs so expensive? Supply, demand, and the allocation of resources all determine the availability or price of a good or service, especially with regard to what the public sees and has access to.

We are currently in the midst of a global chip shortage that may continue indefinitely. Semiconductor chips are used in everything from computers to airplanes; Manufacturers from all over the world have had to downsize or limit production due to shortages.

The chip shortage has affected not only graphics cards but also other sectors, including laptops, phones and game consoles.

3. Inflation and the COVID-19 pandemic

Why are graphics cards so expensive? Picture 3

The COVID-19 pandemic has subsided globally, but you can't deny the fact that it has drastically changed the way people and businesses choose to work. Many people have started working from home, leading to an increasing demand for personal electronics. GPU prices are currently high because the market is scarcer than ever.

Whether it is for work or play, a lot of people are looking to buy electronic devices such as computers, smartphones or tablets. This has greatly increased the demand for graphics cards, which is why graphics cards are so expensive.

Another consequence of the pandemic is broken supply chains. While COVID-19 is no longer the main reason for this, other factors such as the Russia-Ukraine war have disrupted global supply chains by 2022.

This means that people living in different parts of the world may not have access to the graphics cards they need, forcing them to find ways to import from overseas markets. These external markets, attracting new business for one reason or another, then become overcrowded; leads to inflation, corruption and other indicators of imbalance.

4. US Tariffs on Imports

Why are graphics cards so expensive? Picture 4

During Mr. Trump's presidency, new tariffs were imposed on imports from abroad on a weekly basis, including an additional 25% duty on top of the asking price for graphics cards. import from China. The Biden administration has not announced any plans to end this policy toward China. The new administration intends to reassess its existing trade arrangements before proceeding with any new strategy.

5. Cryptocurrency Mining

Why are graphics cards so expensive? Picture 5

Crypto miners need a good graphics card and software to mine cryptocurrencies like Ethereum efficiently. They often have high requirements on what kind of graphics card they need for their setup; The faster the cards, the faster they can mine, so the demand for high-end graphics cards is increasing day by day.

Although cryptocurrency miners have avoided hoarding graphics cards in 2022, thanks to the Bear crypto market, the situation could change at any time. Bull markets often lead to miners buying as many graphics cards as possible, disrupting supply and demand.

Cryptocurrency miners are usually knowledgeable, well-connected, financially able to buy a graphics card and get the best of the best before anyone else has a chance to step in. Thankfully, NVIDIA has solved this problem with its LHR graphics cards, which halve the hash rate when mining.

6. Surfing speculators sell hardware for profit

Cryptocurrency miners aren't the only ones dominating the graphics card market; Speculators have also been affecting the graphics card market, although they use different tactics to achieve their goals.

Surfing speculators resell commodities for a quick (and often large) profit. While scaling is not limited to graphics cards, they are hot items at the moment due to increased demand. Therefore, they are used to resell at a high price to consumers in need.

Sometimes, scalpers can get their goods through dubious sources. However, in many parts of the world, surfing investing in any form is still a legal activity. There is no federal law that prohibits surfing investing in the US, although some states have adopted laws to discourage it.

During the 2021 holiday season, US politicians announced a new bill aimed at preventing speculators from using bots to secure online goods. At the time of writing, this bill is still a proposal and has not officially become law.

7. Better specs and performance

Why are graphics cards so expensive? Picture 6

Unlike the graphics cards of the early 2010s, modern GPUs use cutting-edge materials and leading-edge design. In general, they are of higher quality and more difficult to manufacture than previous generations. Simply put, you can consider the higher cost of production as one of the main reasons why modern GPU prices are so high.

The producer can only create what is within his power. As production costs increase, manufacturers have to be creative to maximize their profits without compromising the quality or quantity of their products.

The shift of current graphics cards from NVIDIA and AMD is pushing the boundaries of computer graphics in many ways, not just frame rates. With advanced technologies like ray tracing and FSR (DLSS), these state-of-the-art GPUs are designed to deliver the best possible gaming experience at higher resolutions like QHD and 4K.

In many ways, you're technically getting what you paid for, but that's simply another factor to consider when determining your range of options the next time you're ready. upgrade your graphics card.

The article has listed all the reasons why graphics cards are so expensive, but unfortunately, GPU prices are not under our direct control. If demand is still higher than supply, graphics cards will continue to be expensive.

Taking inflation into account, you shouldn't expect high-end graphics cards to cost less than $500 like they did five or six years ago. Times have changed and technology continues to evolve to bring new and better experiences to consumers - of course prices will fluctuate too!

David Pac

Update 21 August 2023