If you’ve been eyeing to build your own gaming or workstation PC, you may have asked yourself where in the world all of the graphics cards have gone. If you look up GPUs in Amazon or Newegg, you’ll be greeted with hundreds of listings that are almost all sold out. The few that are in stock have had their prices hike up by hundreds of dollars. The reason for this is none other than the fact that the industry is currently facing the largest GPU shortage in history.
In a completely unprecedented sequence of events, the world— which underwent a harrowing series of trials and tribulations last year— is facing extreme supply issues in many industries. When it comes to graphics cards (or lack thereof), the situation has only gotten worse since. Even low end and midrange GPUs like the GTX 1650 has seen inflated prices that are up to 300 to 400 percent of its MSRP.
Industry analysts and insiders have come forward and said that the graphics card shortage boils down to consumers’ demand exceeding the current supply. Both Nvidia and AMD have stated that the current demand for GPUs has exceeded their expectations, mostly due to the generational leaps in performance that both Ampere and Navi cards brought along with their releases.
However, demand exceeding supply is not unusual for the PC hardware industry. It’s the fact that manufacturers are unable to produce new graphics cards in order to match the exceeding demand that has got everybody in a rut. Thus, the question on everyone’s mind is: why are supplies so low?
There’s more than one answer to this question. Its mostly due to the triple threat of scalpers, cryptocurrency miners and the global silicon shortage that has affected the electronics industry’s need for semiconductors.
Whenever there’s a highly anticipated product launch, you can expect to find scalpers prowling at the front of the line. A scalper is a term given to people who buy freshly launched products and sell them on eBay or StockX at highly inflated prices to make a profit. Its usually not much of a threat to face one scalper who works as a lone wolf by snagging a few RTX 3080s to sell at 200 percent of its MSRP. However, the last few months of 2020 brought out scalpers by the droves out of the woodwork. Many often work as groups to buy thousands of products in bulk in order to sell them at ungodly markups.
Scalpers were especially notorious during the launch of the long-awaited PS5 and Xbox Series X/S.
In an article written by PCMag in January, it was reported that scalpers had sold nearly fifty thousand RTX 3000 series graphics card since their launch on eBay and StockX. In a report submitted by Michael Driscoll, the total in sales amounted up to $61.5 million. He reported that scalpers made off with an estimated $15.2 million in profits during this time. The fear of missing out on new product launches run rampant among consumers, causing them to spend copious amounts of money to buy these products from scalpers.
To add to the problem, the launch of the RTX 3000 and AMD RX 6000 series of graphics cards saw markups on their MSRP by the manufacturers and AIB partners as well. In late 2020, the Trump administration—as part of their trade war with China— imposed tariffs of up to 25 percent on motherboards and GPUs that were being shipped from mainland China. Notable board partners such as EVGA and Zotac were shown to have increased the MSRP of their graphics cards by $70-$100. AMD CEO Dr. Lisa Su claimed that the company is trying their level best in order to keep prices of their cards down. In a quote transcribed by AnandTech, she claimed:
“We knew about the expiration of some tariff policies, and in advance worked towards a more flexible supply chain as it relates to AMD. We are committed to keeping GPU pricing as close to our suggested retail pricing as much as possible, because it’s the only way to be fair to the users. Normally when we have GPU launches, our own branded cards are available initially but then fade away for our partners to pick up. This time around we’re not phasing out our RX 6000 series, enabling us to sell direct to customers as low as possible. We’re encouraging partners to do the same. Not only tariffs, but the COVID environment has increased shipping and freight costs, which are hard to avoid. As we get into a more normal environment, this should improve. This also matters for our planned graphics updates through the first half of the year, as we have a lot of product coming to market.”
2. Crypto Miners
On the other side of the GPU shortage coin exist the cryptocurrency miners. 2020 saw a huge boom in crypto prices; notably Bitcoin and Ethereum, which prompted miners to dust off their mining rigs and start making money. The situation was similar back in 2017 when Bitcoin prices surged and miners caused a mass graphics card shortage. Towards the end of last year, Bitcoin prices exploded upwards of $35,000, a record high for Bitcoin that was never seen before. Similarly, Ethereum also jumped to $400 during 2020, and even managed to spike over $1000.
The previous crypto rush ended in 2018 when the market inevitably crashed. This resulted in the GPU market normalizing with demand dying down and the majority of miners flooding the second-hand market with graphics cards used for mining in order to recoup any operational costs. Consumers are hoping for a similar sense of normalcy during the current mining boom, but we would be hard pressed to have faith in such sentiments due to the state of things as they are now.
While many gamers and other consumers were ticked off that crypto miners seemed to have dibs on the new GPUs, Nvidia thinks otherwise. At the Raymond James Institutional Investors Broker Conference call held on March 1st, Nvidia CFO Colette Kress said that she does not believe that the current graphics card shortage is caused by miners. She went on to say that the supply constraints on Ampere along with record numbers of demand for the cards are there main driving factors. 2020 brought along the “work from home” lifestyle and new gamers and other users suddenly needed new PCs. Kress also said that gaming popularity has skyrocketed by Q1 2021, and thus the supply issues would have still persisted even without the impact of cryptocurrency miners.
In an attempt to reduce the crypto miners’ demand on consumer GPUs, Nvidia unveiled a new line-up of CMP HX mining graphics cards. These have no display outputs and serve solely to mine cryptocurrency. Moreover, Nvidia took steps to ensure that their midrange RTX 3060 was not enticing to miners. According to Nvidia, the RTX 3060 contains a BIOS and hardware level lock that halves the hashrate of the graphics card so that it won’t be efficient in mining crypto. An Nvidia spokesperson called the BIOS “unhackable” and stated that they were confident that miners will look elsewhere for a mining focused card. However, this was short-lived as an allegedly leaked driver update re-enabled the RTX 3060’s mining capabilities, and that solution fell dead almost as soon as it was implemented. However, reports still suggest that Nvidia’s upcoming RTX 3080Ti will also have the mining limiter installed.
There were concerns raised by enthusiasts on the effect the CMP cards would have on the resale market of GPUs. One of the main contributing factors that allowed the market to return to normalcy after the 2017 crypto boom was that miners ended up selling hundreds of GPUs that ended up in the hands of gamers. With the CMP HX line-up of cards only being able to mine, without being able to game on them, the second-hand market would dry up, leaving consumers with no choice but to wait until Nvidia themselves release enough graphics cards to sustain demand.
AMD on the other hand, went on record to say that there will be no such limits on any of their RX 6000 GPUs.
3. The Great Global Semiconductor Shortage
Even if the scalpers and crypto miners disappear back where they came from, the final hindrance to the world’s GPU supplies still persists— which is the global silicon shortage. The availability of semiconductors has been steadily worsening during the latter half of 2020. During the initial days of the pandemic, supply constraints were only seen as a temporary setback as factories and supply chains had to close due to COVID regulations.
But when the cogs of the silicon industry began turning again, the world was in a completely different state from when they left. The sudden changes in lifestyle brought on by the global pandemic meant that people were reliant on electronics and computers to a far greater degree than before. The sudden surge in demand for semiconductors took the industry by surprise. Even tech behemoths like Apple were not prepared for the oncoming shortages, and had to postpone the launch of the iPhone 12 by two whole months.
The global silicon shortage also dealt a giant blow to the automotive industry. Ford reported that their loss in profits will be an estimated $2.5 billion. The inability to obtain enough semiconductors meant Nissan had to hold off on the opening of new plants. General Motors also reported a hit to profits upwards of $2 billion US Dollars.
This sudden shortage in silicon occurred during a transition phase and launch of a new generation of game consoles. Sony and Microsoft came forward and revealed that their profit targets will not be met due to the lack of availability of the PS5 and the Xbox Series X and Series S.
Even Samsung, one of the largest semiconductor manufacturing powerhouses of the world, is considering having to delay the launches of their next flagship smartphone. This is quite possibly the biggest piece of evidence of how dire the situation currently is. Not to mention the fact that Samsung is in charge of producing semiconductors for Nvidia’s new Ampere line-up of graphics cards.
The numbers are there to back up these claims too. According to the Semiconductor Industry Association (SIA), the sales figures for semiconductors in January 2021 was $40 billion, which was 13.2 percent higher than that of the previous year.
Industry analysts who have been observing the developing situation has noted that the demand for silicon will continue to exceed supply at least until end of the Summer. If things take a turn for the worse however, they estimate that the shortage could last well into 2022.
In attempts to mitigate the lack of silicon and boost the rates of production, the SIA has urged the Biden administration to pave way for the opening of semiconductor plants within the US. Following this, President Biden announced that an allocation of $37 billion US Dollars will be put towards achieving that goal. Once these plans have come into fruition, the current semiconductor shortage is projected to improve and even normalize. But these are all long-term goals that will at best take between two to three years to be fully implemented. Can the electronics industry hold on till then? Or will the situation truly get worse before it can even hope to get better?
4. The State of the World As it is Now
So, what’s the bottom line in regards to the availability of graphics cards (or lack thereof)?
In January, Nvidia CFO Colette Kress announced that the current shortage would last until the end of the first quarter of 2021; which ends in April. Evidently, there seems to be no end in sight to the lack of GPU supplies just yet. AMD also reported in January that their RX 6000 series of cards will be readily available to purchase through their own website. This statement was almost instantly invalidated as each card went out of stock seconds after they were made accessible for purchase. AMD in particular has been called out for making empty promises on the availability of their new products, with fans even calling them out for having “paper launches” without any actual stock available.
In an updated statement by Kress, she revealed that the shortage of RTX 3000 cards will persist throughout the rest of the year. She went on to say that the unprecedented demand for the Ampere line-up of GPUs meant that they sold out twice as fast as Turing did during the same timeframe. However, Kress did say that Nvidia expects availability of RTX 3000 cards to gradually rise throughout the year; but it still would not exceed or meet demand. If Nvidia’s projections hold true, you might be able to see Ampere cards in stock more often than before. But we won’t be expecting the situation to return to normal any time soon.
As it stands now, you would be extremely fortunate to be able to snag a graphics card at MSRP. If you’re in the middle of building your PC, and every component minus the GPU is already in your hands; you’re in for some tough luck. And for those of you who want to upgrade from your old GTX 1080 to a RTX 3080, consider yourselves very lucky to even have a functional GPU in your hands.
However, if you’re in dire need of a gaming or workstation PC at the moment, you will be better off going the prebuilt route (yes, we said it). Check out some of our prebuilt PC guides below to find yourself a computer during these stormy times.
- Best Pre-Built Gaming PCs under $1500
- Best Prebuilt Gaming PCs under $800
- Best Prebuilt Gaming PCs for Call of Duty: Warzone
- 7 Best Gaming PCs for Fortnite in 2021