GPU prices plummet: Has the graphics card bubble finally dissipated?

GPU prices plummet: Has the graphics card bubble finally dissipated?

GPU prices plummet: Has the graphics card bubble finally dissipated?

We built two PCs last year. First, in March, we bought a GeForce GTX 1060 (6GB VRAM) graphics card in the second-hand market, which cost about 400 dollar . How outrageous is this thing? The GeForce GTX 1060 is a GPU released by Nvidia in 2016, 5 years after we bought it.

The suggested retail price for the card when it was released in 2016 was $299. In other words, we bought a 5-year-old “dessert-grade” GPU at a price that was more expensive than the original launch price.

Buying a GeForce RTX 3060 in November cost about 1000 dollar, which is about double the suggested retail price of the GPU when it was released at the end of 2020.

However, this seems to be a very common thing in the PC graphics card market.

The high price of GPUs in the past two years has really made it impossible for ordinary people to start.

GPU manufacturers such as AMD and Nvidia are not without efforts.

Nvidia, in particular, has used every means you can think of in the past year or so in order to increase supply and stabilize prices.

For example, start selling old models of GPUs to try to stabilize the market, such as selling special mining cards separately – to ease the price pressure on GPUs in the gaming market.

Nvidia even released a driver patch that deliberately greatly reduced the mining power of Geforce GPU graphics cards in the hope that digital currency miners would give up buying these GPUs.

It seems that all the series of operations aimed at the market are in vain in the face of soaring GPU prices. At GTC last year, when we interviewed Jensen Huang, most of the questions asked by reporters around the world were about “when will the price of graphics cards come down?”  Mr. Huang is probably also helpless in his heart.

But at the same time, the soaring performance also made many participants in the industry chain carnival collectively.

Intel also announced a month ago to launch the Bitcoin mining chip Bonanza Mine ASIC, which shows that this business is still quite good.

GPU price 1 year ago

The price of GPU has been soaring, and the supply-demand relationship must be because the supply is in short supply.

It is generally believed that this wave of GPU price increases stems from the mining boom—that is, the price of digital currencies including Bitcoin is running wildly, causing a large number of miners to invest in GPU hardware to mine at full power.

These “miners” have taken away a large number of GPUs on the market, making it difficult for ordinary users and regular PC OEMs to buy GPUs, so GPU prices have changed dramatically.

In the first quarter of 2021, analysts from Jon Peddie Research gave data: this quarter, “mine bosses” purchased about 700,000 mid-to-high-end graphics cards, accounting for 25% of the graphics card purchases in the quarter, with a market value of about 5%.

One hundred million U.S. dollars. While we don’t know the JPR’s statistical range, this statistic is staggering by any means.

This mining boom will be staged periodically after the emergence of digital currency, although we know that one day the price will return to stability.

Of course, in addition to the mining boom, there is naturally a “core shortage tide” that has fanned the flames of GPU prices – but this factor can only be ranked second in the face of the mining boom.

At the same time, the PC market itself has rebounded due to the epidemic, which is also related to the increase in GPU prices.

In January 2021, foreign data analysis agencies began to more seriously count the price trend of PC-oriented GPUs.

In May last year, the actual price of the latest GeForce RTX 30 series graphics cards reached 318% of Nvidia’s original suggested retail price; AMD’s situation is slightly better, after all, the market share is significantly lower than that of Nvidia, but it also reached 216% in the same period. 

At that time, every time Nvidia released a new GPU, it would eventually announce a retail price, and buyers generally laughed: just look at this price.

That’s because when buyers actually go to the market to buy a graphics card, they will find that they may need to pay 3 times the price to get the desired product.

At that time, a dessert card for the entry-level market had a Geely price figure of 1400 dollar.

The GPU is expensive in Luoyang, and even temporarily makes the game console next door particularly attractive.

Even the media are ridiculing the market: “Today we are going to experience an air graphics card, because you can’t buy (and can’t afford it) anyway.” The two CPU experiences we have done before have advertised building an “affordable PC” , but a graphics card costs about 1000 dollar, which makes such an “affordable PC” seem ridiculous (but we can’t help it).

Even after hitting a 3x price peak, the GPU market had a notable correction. But since then, the inflated price of graphics cards has remained at a stable level.

But GPU has entered the price reduction channel

However, students who are concerned about the graphics card market should find that the GPU market in recent months has not been as tense as it used to be. While still a lot higher than Nvidia’s price guide, GPU prices for PCs seem to have entered a price cut channel.

Graphics card prices for PCs have been falling for about 3-4 months. 3D Center sheds some light on market monitoring data from Australia and Germany.

Although the current price is still a bit higher than the suggested retail price of GPU manufacturers, it is really much better than last year. According to data from February this year, the current median AMD graphics card price is about 145% of the suggested retail price of these GPUs when they are released; Nvidia GPU prices are slightly higher at 157%.

Tom’s Hardware monitors eBay’s GPU price trend every month. Their data shows that the price of Nvidia GPUs has fallen by more than 30% since December – when the price was 187% of the suggested retail price; 2 percentage points on Jan. 2 and 8 on Jan. 23 Percentage points, on February 13, it fell sharply by 20%. AMD’s GPU price trend for the PC market is similar, with price declines of 5%, 15% and 18% at these three points, respectively.

At the end of January, the price of the highest-end GeForce RTX 3090 in the PC market fell by 9.8% compared with December, and the price of the RTX 3080 (10GB VRAM) fell by 11.6%; AMD’s RX 6600, which fell the most, fell by 11.6% this month. Other mainstream graphics cards have experienced price drops to varying degrees, which may be large or small.

Judging from the price trend at the end of February, the overall price of GPUs seems to have dropped by about 12% – such a decline is not only due to the decline in the price of digital currency, but also the supply of GPUs has also increased significantly.

Although the price of graphics cards is far from “low” at present, the price of digital currency and the supply level of graphics cards in the above picture are more reasonable than before.

There are still differences in the price drop for different models of GPUs. The average retail price of all GPUs on eBay in February was $1,094, compared to $1,248 in January.

The market is relatively special and deviates from the median value: the GeForce RTX 3050, which was released soon, was priced at $539 in January this year, and dropped to $455 in February; At $365, it fell to $272 in February.

Aside from this generation (GeForce RTX 30 series and Radeon RX 6000 series), Nvidia’s and AMD’s earlier GPU price declines are similar. For example, the price of AMD Radeon RX 5500XT dropped by 20% at the end of February; Nvidia GeForce GTX 1660 also dropped by 10-14%.

It’s important to note, though, that even the previous-generation GPU is currently priced 66% above its market guide when it was originally released. So anyway, if you’re just a regular buyer, it’s still far from a good time to sell.

Mixed price and supply factors

In fact, it is not just the prices of these PC-oriented GPUs that are falling, the prices of dedicated GPU mining cards have also begun to fall. Nvidia said its mining card revenue plunged 77% last quarter, which is already a huge signal.

On AMD’s side, Sapphire Technology released the GPRO series of mining graphics cards (based on AMD Navi architecture) in November last year.

Previously, it was hard to find a single card, and now they have been listed on price comparison websites. The price of sapphire GPRO has fallen by nearly 40% in the past month.

Since December last year, the entire digital currency mining market has been declining. Mining bosses in this market have been struggling to make money if they invest in GPUs recently.

The decisive factor for the decline in the price of GPUs is the decline in the market prices of digital currencies such as Bitcoin and Ethereum.

Both Bitcoin and Ethereum prices hit new lows in January this year, reaching $30,000 and $2,200 respectively, a 50% drop from their peaks.

Of course, the follow-up price is actually still fluctuating. In February, the price of Bitcoin fluctuated at 38,500, 45,000, 35,000, and 41,000; Ethereum also had a similar fluctuation pattern.

In fact, its volatility has become smaller, and the opening of the GPU’s price drop channel is also due to the profit that can be obtained from digital currency mining. Now it is far lower than the first half of 2021, and the price needs to seek a new balance.

And although the price fluctuation of GPU is greatly driven by the price change of digital currency, its response time and dynamic changes are much slower.

Tom’s Hardware believes that the downward trend in GPU prices will continue. It is also necessary to consider that the supply level of graphics cards in the full price segment is also increasing, which will further help drive down the price of graphics cards.

At the same time, the market has a very important variable. That is, Intel will soon release graphics card products for the PC market in the next 1-2 months, although its positioning and price are still unclear. However, the entry of new forces into the battle will actually put a certain degree of pressure on the current graphics card prices.

However, there is still an important reverse force in the market, that is, the lack of cores in the general environment of the semiconductor industry has no signs of easing in the short term.

Prices from silicon wafer factories to wafer factories are still increasing, including cutting-edge and mature processes; downstream prices are also forced to increase.

The supply chain news mentioned that Nvidia’s future graphics cards (RTX 40 series) are likely to use TSMC’s 5nm process, and even have given advance payment.

This part of the increase should be Nvidia’s market guide price – the price fluctuations caused by the semiconductor supply chain should not have as much impact as the mining boom and mining disaster.