Ten years ago, graphics card prices were stable and relatively low. At $649.99, you can buy the high-end Nvidia GeForce GTX 980 Ti model. Today, graphics card prices have skyrocketed.
Purchasing the current high-end graphics card of Nvidia costs a whopping $1,500. So what happened?
The demand for graphics cards has increased as more people use graphics-intensive processes such as gaming, video editing, crypto mining and work-from-home jobs. Additionally, there is a global semiconductor shortage and this increased demand has caused the prices of graphics cards to go up.
The price of graphics cards has gone up significantly in the last few years. If you go back to 2015, they only cost around $529 on average.
Nowadays, that same amount will barely get you one single card. Compare this to the current average price of $1,000, and you can see how prices have nearly doubled.
The cost of graphics cards has soared over the past year and is unlikely to come down anytime soon.
The table below shows how prices for popular graphics cards have increased dramatically from August to November this year.
|Popular Brands||August 2021||November 2021||Price Increase|
|NVIDIA GeForce RTX 3090||$1,500||$2,936||+51%|
|NVIDIA GeForce RTX 3080 Ti||$1,200||$1,895||+63%|
|NVIDIA GeForce RTX 3080||$700||$1,720||+41%|
|NVIDIA GeForce RTX 3070 Ti||$600||$1,201||+50%|
|AMD Radeon 6900 XT||$1,000||$1,599||+63%|
|AMD Radeon 6800 XT||$650||$1,384||+47%|
|AMD Radeon 6800||$580||$1,332||+44%|
|AMD Radeon 6700 XT||$480||$945||+51%|
Additional Reasons for Graphics Cards Price Surge
There are many reasons why graphics cards have become so expensive recently. Aside from the increase in demand, there is also a global semiconductor shortage. This means that the manufacturers of graphics cards are having a hard time keeping up with the demand.
The COVID-19 pandemic started the rise in demand because of the work-from-home jobs. This has caused an increased demand for gadgets and personal electronics, including laptops, PCs, and graphics cards.
Additionally, cryptocurrency mining has become a trendy way to make money. And as the value of cryptocurrencies continues to rise, more and more people are getting into mining.
For the past year, Bitcoin and Ethereum prices have soared. As a result, many people are now buying graphics cards to mine cryptocurrencies.
Tariffs on China
The government’s move of imposing tariffs on Chinese imports has also contributed to the increase in graphics card prices.
This is because most of the components used in graphics cards are from China, including GPUs.
Increased Costs for Manufactures
Companies like NVIDIA and AMD have also been using improved technology to make their cards more powerful. The high manufacturing costs are also why graphics cards are more expensive than ever before.
Overall, there are many reasons why graphics card prices have skyrocketed recently.
Between the increased demand for gaming PCs and laptops, cryptocurrency mining, work-from-home jobs, and improved technology, it’s no wonder graphics cards have become so expensive.
Generally, graphics cards have been getting more expensive since March 2020, when the pandemic hit. The price for graphics cards has been steadily increasing these past few months, averaging about $1000. The price doesn’t look like it will be dropping anytime soon.
For example, GeForce RTX 3090, one of NVIDIA’s most powerful graphics cards, was released in September 2020 and retailed for $1,499.
A quick search on the internet now shows that some sellers ask as much as $2,936 for the same card.
In March 2020, it started with COVID-19 and its high demand for powerful graphics cards, especially those who have to work from home. The graphics card manufacturers couldn’t keep up with the global demand, so the prices for graphics cards kept going higher and higher.
There has also been a supply chain issue because of border controls, temporary closure of factories, and other similar disruptions.
Seven months later, scalpers took advantage of this high demand and began to set up bots on leading online markets to buy as many graphics cards as possible.
These were sold at a much higher price, which caused an even more significant increase in prices.
A few months later, Bitcoin and Ethereum’s value surged, and demand for graphics cards used to mine cryptocurrencies also increased. This caused the prices of graphics cards to reach an all-time high, with some costing over $2000 each.
As we move further into January 2021, tariffs have been placed on Chinese imports at 25% and caused the prices of graphics cards to increase even more.
It is also important to mention that there has been a global semiconductor shortage going on for several years and continues to worsen as we move further into 2021, with no end in sight.
The leading graphics card manufacturer NVIDIA has announced that the company is expecting to improve its production of graphics cards in the second half of 2022 because the supplies are expected to be much better by then.
NVIDIA also disclosed its strategic move of entering into longer-term supply agreements to improve its production capacity.
AMD is also expecting a much better graphics cards supply situation in the second half of 2022 and plans to enhance production capacity further to meet the demand for graphics cards.
They have already taken steps to open new factories this year and next year to improve their production capabilities.
This means that the production of graphics cards will most likely not improve until later in 2022 and will continue to stay high in the meantime, resulting in even higher prices for the consumer.
As of now, there is no slowing down in sight as graphics cards prices continue to rise steeply due to increased consumer demand and low-level inventory supplies.
Manufacturers are working to increase production, but it will take some time before the market sees any significant changes.
As we move closer to 2022, I don’t see any chances of the prices going down in the near future as it is currently a seller’s market.
With the current market conditions, graphics cards will only become more expensive as we move forward. Graphics card prices will still be high by the end of 2021 and potentially beyond that.
Benjamin is a certified financial advisor, with over 10 years of experience in the industry. He is knowledgeable about various business and financial topics, such as retirement planning and investment management. Ben has been recognized for his work in the financial planning industry. He has also been featured in various publications.