Performance cards in short supply since 2020, others since 2021
In the fall of last year, Nvidia launched the top models in its new GeForce RTX 3000 series and AMD followed shortly after with the Radeon RX 6000 contenders. In both cases, all cards disappeared from store shelves within minutes of going on sale. Many expectant gamers were left without or had to wait weeks and months for delivery of cards they had in many cases already paid for.
Since then, the situation has worsened, and at the time of writing (May 2021) it is still almost impossible to find a new graphics card with decent gaming performance – especially if you want to pay the normal price and get the card delivered in the near future. The shortage is no longer limited to the latest generation flagships, but also extends to the mid-range of previous generations.
What are the reasons for the price increases?
As is usually the case, high demand for a scarce good leads to higher prices. That is why we are currently seeing record-high prices for graphics cards, both for the small number of cards reaching the shops and on the second-hand market. In all likelihood, we will have to live with the current price situation until the market order is restored.
What are the reasons for the GPU shortage?
Over the past six months, the semiconductor industry as a whole has been struggling to meet demand. For example, car manufacturers have had to cut back on production due to a lack of supply of the circuits needed in new cars. And in the production of graphics circuits, “almost everything is missing”, according to industry expert Igor Wallossek.
More broadly, the reasons for the limited production rate are not least:
- The pandemic – The most obvious cause of the current situation is of course the coronavirus pandemic. As you know, many workplaces around the world have been completely or partially shut down for long periods of time since the spread of the virus began, creating pent-up demand and shortages of all kinds of products.
- Few manufacturers of high-end circuits – It is no easy matter to manufacture GPUs and similar circuits containing billions of transistors on a few square centimeters of surface. Today, only TSMC in Taiwan and Samsung in South Korea produce graphics chips for AMD and Nvidia’s partner manufacturers (e.g. MSI, Asus, Gigabyte and others). And unfortunately, they are not alone in buying capacity from these producers. For example, TSMC also has to build circuits for many of Apple’s products.
At the same time, demand is higher than ever due to:
- Mining – Ethereum and other cryptocurrencies still mined with graphics cards have set new price records recently, making the cards profitable despite today’s high prices. Desktop graphics cards perform best and are most sought after, but even laptops with RTX graphics cards have been bought up to mine cryptocurrency on an industrial scale.
- Major performance leaps – Both AMD’s and Nvidia’s latest graphics chips outperform previous generations by a wide margin. As a result, more people than ever are motivated to upgrade, putting further pressure on the market. The fact that more people have been forced to stay home from work and school due to the pandemic has added another gear to the demand for entertainment, preferably in the form of new graphics card killers like Cyberpunk 2077. For example, gaming increased by 50.7% on the Steam platform last year, with 21.4% more games sold.
- New game consoles – Both the Xbox Series X/S and Playstation 5 were launched recently and, like PC graphics cards, have had major supply issues. The reason is that these also use the latest generation of graphics chips from AMD, so both console and PC gamers are indirectly competing for the same type of components.
In other words, the market situation for graphics cards is extremely tight from several sides. So when can we expect production to increase and prices to normalize again?
The forecast: Graphics cards in short supply for the rest of 2021 – at least
At the moment, no one in the industry is willing to put a date on when production will be sufficient to meet demand again. However, most agree that the situation will remain relatively grim throughout 2021. For example, Nvidia has recently announced that it expects demand to continue to exceed supply for the rest of 2021.
Major circuit manufacturers such as TSMC and Intel have already warned that we will have to live with shortages next year and perhaps even longer. TSMC’s CEO hopes that supply chains and production capacity can catch up only in 2023.
So while the industry’s capacity problems are slowly but surely easing along the way, it looks like a full return to normal is a long way off.
Buying used graphics cards is a solution for the time being
Right now, it is very difficult to find stores that have graphics cards in stock and even more difficult to find graphics cards in stock that are cheap or even close to normal price. The tight market has resulted in higher than usual prices even for used graphics cards, but it is still a good opportunity to consider. Auction prices can still be lower than retail prices and you don’t have to wait months for a pre-order.
Another tip to get a used graphics card a little cheaper is to aim for cards with 4GB or less graphics memory (VRAM). The reason is that you then don’t have to compete with miners who push up the price, as Ethereum mining requires more memory. Examples of slightly older cards that still deliver acceptable gaming performance in 1080p are 4GB versions of the Radeon RX 580/570 or the 3GB version of the GeForce GTX 1060.
