Why are Graphics Cards so Expensive- If there is anything a gaming PC builder is worried about is to fit the GPU price in the budget. Taking up the majority value of the build, graphics cards otherwise called GPU has always been maintained to be the most expensive component of any build.
Although with latest stats indicate a drop of 15% in the prices of GPU as of May. The drop is not enough to clear out the performance against cost calculations for mid-range PC builders.
The prices may have been on a gradual drop since the post-pandemic market. However, several elements and issues determine these chips’ prices. We will dive deeper into what factors influence the GPU industry?
The Demand-Supply Curve
The pandemic market brought major changes to the demand-supply curve. The beginning Coronavirus pandemic is perhaps the most significant factor in the late 2020 graphics card scarcity.
Since the world took a halt several industries reduced the demand for semiconductors eventually leading the manufacturers to decrease their production.
Workers moving their homes resulted in a shortage of specialized workers resulting in an increased production cost.
The shortage of semiconductors created a backlog of required GPUs. Combined with the increased cost of production and demand surpassing the supply, hiked the prices of these chipsets holistically.
Miner’s Enchanted Gold Apple
The world of crypto is the world at present. The world took mainstream public attention during the pandemic when online businesses boomed.
The major contribution of demand comes from the crypto miners that need high-end performance GPU to meet their requirements of mining these cryptocurrencies such as bitcoin.
Several GPUs can be used at once in large cryptocurrency mining operations.
More users are mining cryptocurrencies themselves for revenue as a result of the rise in demand.
This change has an issue since mining cryptocurrencies requires a lot of computer power, which is provided by GPUs.
For any cryptocurrency miner, it is ideal to mine more coins in less time. In the world of cryptocurrencies, profits are made on performance. Creating an ever needing demand for high-performance GPU.
Tiny Transistor Trail
The semiconductor industry sustains on performance. The constant need for performance with cost-effective production has been the aim of GPU makers.
Years of R&D and experience of people with years of developing these high-end performance chips. The more advance the world is becoming smaller the chips are getting.
Throughout time, there is a significant increase in the computing capacity of processors per dollar. From what is understood, the significant rise in semiconductors per unit of area is the key driving force behind this.
Although expected to increase performance and decrease the price, however deploying the machinery that advances in dealing with nanoscopic components requires a hefty amount of money.
Eventually, the deployment cost forces the company to increase the price to balance the investment and profits for a certain period.
Not only do production costs result in hiking the price, but the GPU industry has also faced issues in delivering the supply needed.
The cost of shipping has gone up as a result of the higher taxes on Chinese goods. Shipping container ships that are not stocked with goods across the ocean costs more as fewer items come from China.
The products that do make the journey must raise shipping prices to maintain up for a loss in product availability. The air cargo sector has been exactly impacted by rising operational prices.
Travels and shipping both are affected due to the pandemic increasing price of shipped products. With this hike, the cost of a GPU is increased by 25% on average in the US.
Breaking the Barrier
Apart from all the problems caused by COVID, there is also the simple reason that GPUs are expensive. With greater investments comes greater performance.
The graphics card industry runs with a mission of making a semi-permeable membrane between fiction and reality, by deploying high-end tech and development and providing an unforgettable, addictive user experience.
The new generation of GPUs uses better technology and high-end materials to deliver better performance.
It borders on breaking the barrier between computer-generated graphics and reality.
There is a price to pay for this kind of definition and performance. The new GPU uses materials that provide better performance. These materials come at a high cost.
GPUs are better than their predecessors and use more of these materials, which increases manufacturing costs.
As a result, the final price of the GPU will also be higher.
Certainly, the graphics card price has always been high, but the factors such as the Covid-19 pandemic, the boom in cryptocurrency mining, scarcity, shipping cost, and the constant enhancement of better-performing hardware. It will be a challenge to reduce the prices to a level that is not frowned upon.