Is the day of "one card hard to find" finally over?
With the decline in the price of Bitcoin and the standardized governance of virtual currency mining projects by regulatory authorities in various countries, the price of graphics cards in domestic and foreign markets has declined to varying degrees, and the current price of some graphics cards has dropped by more than 20% compared with February.
Just as the graphics card market is declining, the main player Nvidia also released a signal of a decline in supply-side costs. Due to multiple factors, the price of the graphics card may gradually return to the official suggested retail price.
The graphics card's high premium gradually cools
It has fallen 25% since December last year.
According to the Science and Technology Innovation Board Daily, the high-end graphics card quotations of dealers have plummeted recently. Asus's high-end graphics card "RTX3080 TUF GAMING OC" price fell 35% in one day in the Australian market, the largest decline in history, and the recent average decline in the price of other specification graphics cards also reached 10%; in the German market, NVIDIA's "RTX3090" graphics card is currently only 1999 euros, the lowest price since August 2021, and the product was once speculated to 3199 euros in May last year, almost double the original price; in addition, the industry reported that ASUS and GIGABYTE will cut the price of each graphics card by 100 yuan in China, and MSI will follow suit.
In fact, except for some high-end graphics cards, all graphics cards have had different degrees of price reductions since December last year. After counting the price trends of all the graphics cards sold on the well-known e-commerce platform eBay, foreign media found that since December last year, the overall average decline has reached 25%, and the price in February has dropped by 11% compared with January. Some products fell by more than 20%, and the average price also fell by 8.8%.
AMD graphics card. Image source: Visual China
Consumers have the opportunity to feel a further drop in graphics card prices within a few weeks. According to the news on March 17, NVIDIA has pushed downstream manufacturers to reduce the cost of graphics cards by 10%, and it will take several weeks to transmit to the retail side.
Graphics cards are mainly responsible for the graphics computing processing of computers, and the consumer group is gamers, video and animation designers. In the past two years, due to the strong demand for mining, the price of graphics cards in the market has risen sharply, and the global chip production capacity is insufficient, and graphics card manufacturers have embraced the era of high premium products. Leading companies such as Nvidia and AMD reported in the fourth quarter of last year that game graphics chips were the main driving force behind their record revenue.
However, with the decline in the price of bitcoin and the standardized governance of virtual currency mining projects by regulatory authorities in various countries, the industry has gradually returned to rationality, and the demand for graphics cards used for mining has continued to decline, and many second-hand graphics cards have flowed to the market.
On the other hand, GPU display chips are the most critical components of graphics cards, and their prices are currently in a downward trend, and the GPUs of Nvidia and AMD are at the lowest price in more than a year, further reducing the production cost of graphics cards.
According to the statistics agency 3DCenter tracking the situation in the German and Austrian markets, there were two significant declines in graphics card prices in January, and it is expected that price declines will become the norm in 2022.
Why are graphics cards rising? Why the fall?
The so-called "mining" refers to the use of computers equipped with high-performance graphics cards to obtain digital currency according to specific algorithmic programs. After installing the graphics card, just open the program, so that the graphics card of a machine will be transferred to mine the digital currency, which is called mining in the industry, and the factory with a large number of machines is also called the mine. These mines require thousands of graphics cards, more than tens of thousands, the scale of investment is hundreds of millions of yuan, and the number of graphics cards on the market is how much the mine owner collects.
According to CCTV Finance reported in March 2021, starting from December 2020, various models of computer graphics cards have begun to significantly increase prices. Take the 3070 model, which performs slightly less than the 3080 graphics card, for example. At that time, no matter what kind of brand the major shopping websites, the price of the 3070 graphics card was mostly more than 8000 yuan, and when it was first launched in September 2020, the official sales price of each brand was only 3899 yuan. Four months after the launch, the price more than doubled.
Image source: CCTV Finance
However, following China's ban on virtual currency "mining" last year, state regulators, including Russia and the European Union, are also calling for a ban on energy-intensive crypto mining models.
According to Bloomberg, the Russian central bank said in a report released on January 20 this year that cryptocurrencies have the characteristics of pyramid schemes, undermine the sovereignty of monetary policy, and pose a threat to the Russian financial system. According to the Financial Times, the EU's top financial regulator has once again called for a ban on major models of bitcoin mining across the EU. On January 10, the Kosovo government announced that it would work to ban cryptocurrency mining to address the energy crisis.
With the gradual cooling and standardization of cryptocurrency mining activities, the price of graphics cards in domestic and foreign markets has declined to varying degrees, and the current price of some graphics cards has dropped by more than 20% compared with February. According to the Observer Network quoted by foreign technology media Tom's Hardware, if the current trend continues, the second half of the year is expected to see graphics card prices generally close to the official suggested retail price, especially with the new RTX 40 series, RX 7000 series released in the autumn, graphics card price reduction will be the trend of the times.
Nvidia graphics card costs have declined
But now may not be a good time to start
According to the Observer Network, on March 16, foreign technology media wccftech said that the US graphics card giant Nvidia has notified AIC partners that the production cost of its graphics card chips has dropped by 8%-12%. This cost reduction will then be gradually passed on to the AIC vendor, who will then pass on the cost to the system integrator, and eventually the consumer will feel the price drop.
wccftech noted that graphics card prices have fallen sequentially for three consecutive months as cryptocurrency market capitalization slumps and Ethereum considers shifting from Proof of Work (PoW) to Proof of Stake (PoS) later this year. NVIDIA's latest notice means that the supply side will also cool the market price. In WCCFTECH's view, this is something that has never happened since the emergence of the cryptocurrency boom, and it is also an important indicator of price easing in the graphics card market for the first time since 2020.
From the perspective of specific models, the graphics card with the largest price decline is the RX 5500 XT 8GB, the average price in mid-March fell by 20.2% compared with February, the RX 5500 XT 4GB fell by 19.0%, and the RX 5700 (16.6%), RX 6700 XT (12.2%), RX 5700 XT (12.1%), all AMD graphics cards. In Nvidia, those that fell by more than 10% included GTX 1660, GTX 1660 Ti, RTX 3070 and so on.
However, wccftech also reminded that the decline in graphics card costs does not mean that the supply will necessarily improve at the same time. As cryptocurrency mining remains profitable and will continue to be profitable, graphics cards are still likely to outstrip supply, but there will be several factors that will continue to drive down graphics card prices this year.
Statistics agency 3DCenter also reminded consumers that now may not be a good time to buy graphics cards, and graphics card prices are still too high. Marketing data compiled by 3DCenter shows that Nvidia's RTX3000 GPU is still 41% higher than the manufacturer's suggested retail price, while AMD's RX6000 graphics card is 35% higher than its manufacturer's suggested price.
Edited | Wang Yuelong Du Bo
Proofreading | He Xiaotao
Daily economic news is synthesized from the Science and Technology Innovation Board Daily, CCTV Finance, National Defense Times, Observer Network, etc