When will GPU Prices Return to Normal?

GPU prices are expected to normalize in mid to late 2022. This is supposedly when the global semiconductor manufacturing shortage will start to subside and the GPU market can finally adjust itself reasonably to demand. Additionally, this is also when a possible crypto bear market will begin. The combination of these two factors should result in increased GPU production and reduced demand from miners.

The development of this extended GPU supply nightmare from the perspective of PC enthusiasts has been quite interesting, especially when compared to the first crypto-mining boom a few years back. Although this time around, A whirlwind of numerous factors and the overall world situation have made this GPU supply crisis much worse than anyone could have expected.

Why Are GPU Prices So High?

Starting the middle of the year 2020, an avalanche of cascading events (some already beginning to occur earlier) overlapped with one another, which eventually caused a supply bottleneck to chip manufacturers and distributors all around the world. Long story short, a combination of all of these factors listed below have caused high GPU prices:

A global semiconductor manufacturing shortage

Following the decreased number of working employees is the cutting down of various huge industrial activities. Combined with the sudden boom in demand for semiconductor chips in almost any modern system (including cars), companies like TSMC were eventually unable to properly supply all required sectors which lead to less GPU production resulting in higher prices.

Crypto mining taking advantage of the huge performance gains of recent GPUs

While mining on other altcoins like Ethereum and Ravencoin was already progressing steadily since Bitcoin went ASIC, it is the appearance of RDNA1 (notably the RX 5700 XT) and the Ampere architectures (notably the RTX 3060 Ti and 3070) from AMD and Nvidia respectively that significantly boosted crypto mining activities over the last two years. This effectively created an infinite demand for the new and shiny GPUs, further bottlenecking the already strained supply line.

Scalpers just overall making the situation worse

To make things even uglier for gamers, scalpers saw the opportunity to strangle the remaining GPU supplies, snatched all of them up, and sold them at ridiculously marked-up prices. It is a losing game for regular PC consumers because even with the use of notification bots, scalpers would often make use of much more advanced purchasing bots, in order to instantly drain dry the slow trickle of supplies that came at official retailers. Crypto miners don’t care about scalped prices, by the way, since GPUs are an investment for them. This results in a vicious supply cycle that drastically transformed the GPU market today.

Tariffs on certain items, like GPUs, returning in the middle of the pandemic

At least in the United States, another factor that contributed to the increased base prices of GPUs was the expiration of the tariff exemptions by electronic hardware such as GPUs by the year 2020. Plans are already underway to enact another exemption in the near future. But until then, a percentage of the cost of GPUs in the US will be attributed directly to this.

Manufacturers saw the profit potential of this GPU “crisis” and cashed on it themselves

AiB partners, in particular, announced increased base prices for their GPUs starting the latter half of 2020. And even without prior notifications to consumers, retailing directly to companies such as EVGA still had a significant amount of pre-added markup that is much higher than the paper MSRP of that particular GPU.

Nvidia and AMD eventually gave MSRPs directly reflecting default price increases

Of course, the chip manufacturers themselves would eventually move to exploit the current situation. This is most evident with the release of the RX 6600 XT and RX 6600 for AMD, the RTX 3070 Ti, 3080 Ti, 2060 12GB, and the mind-boggling RTX 2050 mobile for Nvidia. All given a paper MSRP that is already marked up for the AiB partners, distributors, retailers, and scalpers to mark up even more.

Distributors and retailers also wanted a piece of the price mark-up pie

Distributors and retailers have also contributed to higher GPU prices at each step of the marketing layer due to factors such as the increased cost of shipping worldwide.

Analysis of GPU Prices

In a nutshell, as much as crypto mining enthusiasts want to deny it, price changes for graphics cards over the last two years have been largely affected by fluctuations in the value of various cryptocurrencies, most specifically Ethereum. This is a piece of information that has been consistently confirmed by YouTube channels such as Greg Salazar and Hardware Unboxed over their regular assessment of the GPU market and is also corroborated by other websites looking into the matter.

We won’t be making a long essay into the nitty-gritty of this disaster. But instead, we shall enumerate a set of important facts and figures distilled from all of these sources of information:

  • GPU prices were at their highest during May this 2021. This coincided with an Ethereum value of $3546.02 per coin, almost double its value during the last 30 days that it was checked (and turning out to be the highest that it was for the rest of the year). Price rapidly dropped briefly during the following July, although it balanced off the month after and for the rest of the year.
  • Among the newly released GPUs over the last two years, RTX 30-series cards remain the most overpriced. As of December 2021, the RTX 3080 and the RTX 3060 Ti have average retail eBay (U.S.) prices of $1,700 (242% MSRP) and $970 (241% MSRP) respectively.
  • Closely following the RTX 3080 and 3060 Ti is AMD’s RX 6800, which still maintains its $1400 average price (238% MSRP) at eBay even during the last month of 2021.
  • The supposed RTX 3060 Ti “competitor” RX 6600 XT, sits at around $670 average during the same time, roughly 75% higher than its original MSRP (which by itself is already marked up by AMD).
  • If you want to play upper entry-level 1080p using a fresh new GPU, you’ll have to shell out at least $500 for either a GTX 1660 Super or GTX 1660 Ti. MSRP for these were originally $280 and $230 respectively in 2019.
  • The non-Ampere/non-RDNA2 card with the highest demand for crypto mining at the moment remains to be the RX 5700 XT. It currently sits at an average of $900 in eBay, more than double its original MSRP of $400.
  • Those looking for acceptable triple-A gaming should at least look into AMD GCN 2.0 or Nvidia GTX 900 series (Maxwell 2.0) cards. The R9 290X and GTX 970, in particular, can perform reasonably well enough for the latest titles (except for Cyberpunk 2077, of course) while still being somewhat reasonably priced in the used market.
  • Additionally, you may also look for the GTX 1070 Ti, a very capable Pascal card that surprisingly isn’t offered at significantly marked-up prices at all. Though, you still have to buy it at somewhat near the original MSRP even when used. (hint: look for cards bought as late as at least 2018)

Possibility that GPU Prices Will Never Become Be Normal Again

While hopeful people still speak of the current GPU crisis as just another phase, much like the regular peaks and lows of memory modules year after year, there is an actual probability that this will be our “new normal”.

The main argument is rampant consumerism. AMD, Nvidia, Intel, and their AiB partners now know that consumers will gobble up anything that they offer, given no other alternative choice. All they need to do is to squeeze the market long enough for non-tech-savvy people to accept.

Indeed, this has been the case when we observe the absurdly high-profit margins for GPUs during 2020 and 2021. Nvidia in particular was super proud to have increased its overall revenue at a whopping and unprecedented 68 percent in just a single year. Pretty sketchy figures for a company that was supposed to be “struggling” from the so-called global chip shortage.

Further supporting the observation that Nvidia and AMD can just control prices willy-nilly at this point is the complete lack of attention for the entry-level discrete GPU market over the past two years. Instead of releasing a 50/500-tier card by the end of an 8-month release stint for a new architecture like they always do, GPU chip-makers opted to introduce increasingly higher and higher tiers of cards.

And even if the RTX 3060 and RX 6600 XT were eventually released, the price mark-ups were already in place that you would effectively still be paying the same amount as the equivalent-performance GTX 1080 Ti in this day and age. Pretty wild considering that previously, economies of scale have already driven down the price of a “GTX 1070” (GTX 1660 Super/1660 Ti) to just $200+ dollars using an updated architecture in just two short years.

The final coffin on the nail for this particularly grim assessment is that GPU chip makers and AiB partners no longer look at gamers and graphics professionals as their primary customer base. An MSI subsidiary has been caught red-handed offloading scalped RTX 3080s and 3090s on eBay. Sapphire, Powercolor, and XFX deals tons of GPUs in bulk to crypto mining farms. Nvidia themselves tried to market the exorbitantly expensive and architecturally outdated RTX 2060 12GB to “relieve supply issues”, despite not even being optimized for either gaming or mining.

Final Thoughts

And that, my friends, is just the tip of the iceberg. If you have been monitoring the situation as often as some disillusioned enthusiasts did, you are bound to see tons more news related to this very depressing period in PC building history. We haven’t even mentioned the content creation circles that have also been badly affected by this GPU price inflation.

On the bright side, you still have options. First, if you absolutely need to buy a GPU for something relatively important, such as work or content creation, then you have no other option than to buy at current retail prices. Second, if you want to buy somewhere near MSRP, stake out your local PC store or online on the first day of a GPU’s release.

Finally, as many of us continue to do, just wait. Triple-A gaming is not as glamorous as it used to be anyway. Enjoy life’s other pleasures… or let’s just have fun playing Jump King.

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