China Economic Weekly: Graphics cards are experiencing a crazy price increase, is buying a graphics card better than buying Maotai?

Reporter Zhang Yan | Beijing report

Zhao Jianfei didn't expect that his hesitation over a few hundred yuan a few months ago would make him unable to afford a new graphics card now. Seeing the price of RTX 3080 rising from 7,000 yuan before the New Year to 15,000 yuan now, Zhao Jianfei began to wonder whether he should upgrade his two-year-old computer.

RTX 3080 is a core graphics card released by NVIDIA in June 2020. When it was officially launched in China in September, the official selling price was 5,499 yuan. In December last year, Zhao Jianfei planned to upgrade the RTX 2070 graphics card in his computer. He clearly remembered that he had asked three or four offline sellers at the time, and the unit price of RTX 3080 was close to 6,000 yuan. Before the Spring Festival this year, the unit price of RTX 3080 had risen to 7,500 yuan.

Zhao Jianfei told the reporter of China Economic Weekly that he felt the price was not reasonable at the time and wanted to wait and see, but he did not expect that the price would drop, but it would be nearly double the price at that time. What Zhao Jianfei did not expect was that it was not just the new graphics card that increased in price, the RTX 2070 in his computer, which used to cost less than 5,000 yuan, can now be sold for nearly 6,000 yuan in the second-hand market.

In March 2021, due to the hot sales of graphics cards, a computer store placed its main graphics card in a prominent position in the store.

As prices skyrocket, Xianyu will set up a "graphics card cooling-off period"

The graphics card is mainly responsible for the computer's graphics calculation processing. For professionals engaged in visual design and editing and game players, it is particularly important to have a graphics card with excellent performance. In layman's terms, a graphics card with good performance can improve image and video processing capabilities, and can also make the game run more smoothly.

A reporter from China Economic Weekly recently visited offline digital stores in Beijing, Shanxi and other places. When asked to buy RTX 30 series graphics cards, most dealers said they had no stock and would have to wait a week at the earliest. The price would depend on the market conditions at that time. One dealer told the reporter that the current price was too outrageous. If it was not urgent, they could wait until the second half of the year to see if the price would drop.

Offline out of stock, online shopping platforms are also hard to find. On JD.com, in the official stores of Nvidia's AIC (close partners) ASUS, GIGABYTE, and MSI, the price of RTX 3080 is around 15,000 yuan, and it can only be reserved, not in stock. In some third-party dealer stores, reporters found stocks on sale, but the price is much more expensive than the official store, ranging from 18,000 to 20,000 yuan.

On April 9, data from the second-hand e-commerce platform Xianyu showed that the average price of graphics cards has risen by nearly 1,060 yuan recently, nearly doubling compared to the same period last year. At the same time, the transaction volume of graphics cards on Xianyu has risen for five consecutive months, and it has soared in March. In response, Xianyu will set up a "cooling-off period" to cool down and call on users to buy rationally.

The reporter found that in less than half a year, the price of RTX 30 series graphics cards has at least doubled since its official release in September last year. At the same time, the price of RTX 20 series graphics cards has also increased by about 50%. Even the discontinued RTX 10 series has a recycling price of nearly 2,000 yuan per piece in the second-hand market, which gamers jokingly said: "The value retention is comparable to Maotai, and the increase is catching up with financial management."

In addition to NVIDIA, graphics cards released by another development giant AMD are also in short supply in the market. Its RTX 6700xt, which was released in January this year, was priced at 3,999 yuan per unit, but the current market price is around 7,000 yuan, which has nearly doubled.

Despite such a high price, graphics cards are still in short supply. Many gamers said that they only saw the price increase but could not see the actual graphics cards. Graphics cards are jokingly called "air cards" by gamers, which cannot be seen or touched.

Along with graphics card prices, memory, power supplies and computer cases have also risen. In the DIY game market, these components are indispensable for a high-performance computer. Reporters learned from some computer customization merchants that the price of a complete assembled host has risen by nearly 30% since the Spring Festival this year.

The above-mentioned merchants said that the complete consoles currently sold in the store are completely "living off the past", and the only way to keep the price down is to rely on the graphics card inventory purchased in the past. If players want to DIY a computer by themselves, with a limited budget, the configuration and performance of the computer will undoubtedly be greatly reduced.

It’s hard to get a card. Is it because of the chip shortage or the fierce mining?

Graphics cards are in short supply. Is it due to limited production capacity or excessive demand? Recently, AMD publicly stated that the global demand for PC and game console graphics chips continues to expand, and many graphics card markets will face supply shortages in the first half of this year. Analysts believe that the severe shortage of some material components for graphics card OEM is the main reason for the insufficient production capacity of graphics cards.

Generally speaking, graphics cards are usually composed of bus interface, PCB board, GPU (display chip), video memory, etc. Among them, the most critical chip is currently in short supply worldwide.

Take NVIDIA as an example. Its GPUs are mainly manufactured by Samsung, and its latest graphics cards use the 8nm manufacturing process. Since last year, Samsung has repeatedly reported insufficient production capacity and low yield of the 8nm process. The insufficient chip supply has also caused NVIDIA's GPU production to be lower than expected.

According to reports, NVIDIA has been working hard to increase production since the second half of last year. In the fourth quarter of 2020, it provided about 9.1 million GPUs for desktops, and its shipments increased by about 1 million year-on-year, but it still could not meet market demand. Last October, NVIDIA CEO Huang Renxun revealed at the GTC conference that the RTX 3080 and RTX 3090 graphics cards are expected to continue to be in short supply throughout the year. Huang Renxun emphasized that the two graphics cards did not encounter "supply problems", but the market demand was "far beyond expectations."

The reporter learned that the reason why the current market demand is so strong is that, on the one hand, newly released games such as the currently popular "Cyberpunk 2077" have put forward higher requirements on graphics card performance; on the other hand, as the market value of cryptocurrencies has repeatedly set new highs, stimulated by the gold rush, many "miners" have begun to purchase graphics cards on the market.

The rising price of graphics cards cannot stop the enthusiasm of "miners" to buy them

"Miners" refer to investors who provide the environment, equipment and other conditions for mining. The so-called "mining" refers to using computers equipped with high-performance graphics cards to obtain digital currency according to specific algorithm programs. Through a large number of calculations, the right to create new blocks and the cryptocurrency rewards of the blocks can be obtained. The earliest cryptocurrency was mined using computer CPUs. As the difficulty increased, mining machines (computer equipment used for mining) gradually evolved to use GPU mining, which is the core component of graphics cards.

The reporter learned that due to the continuous improvement of Bitcoin's total network computing power, Bitcoin mining can now use dedicated mining machines. At present, the main target of miners using GPU mining in the market is Ethereum.

Currently, the price of Ethereum has soared from $700 at the beginning of the year to nearly $2,000. Driven by huge profits, miners began to snap up graphics cards in large quantities. A mining machine needs to be installed with 8 to 10 graphics cards. The demand of miners has obviously exceeded the normal market demand, and even second-hand graphics cards discarded by Internet cafes have become their targets.

Even when the price of graphics cards has nearly doubled, mining is still profitable for miners as long as the computing power is appropriate. A miner told the reporter of China Economic Weekly that taking a mining machine with 8 RTX 3080 as an example, based on the current market price of 15,000 yuan per unit, after deducting the electricity price consumption, based on the current price of Ethereum, it will take less than 100 days to recover the investment. If Ethereum continues to maintain its current upward trend, the recovery time will be even shorter. Even if the price falls in the later period, the used graphics cards can still be sold in the second-hand market. "For miners, unless they encounter a 'mining disaster', mining will definitely be profitable," said the miner.

"You can't ignore cryptocurrency. It's a global social and economic phenomenon. I pay close attention to it and don't mind talking about it... The era of GPU computing is coming, and it's a very strong trend." NVIDIA CEO Jensen Huang said earlier, "Some people buy GPUs for deep learning, some buy them to play games, and some buy them for mining. For the mining market, we must also pay attention to its existence and ensure sufficient inventory to cope with it."

In order to maintain the normal order of the graphics card market, NVIDIA and AMD are also trying to make some efforts. At present, NVIDIA has launched a series of processors CMP dedicated to mining the cryptocurrency Ethereum, including CMP 30HX, 40HX, 50HX and 90HX. These graphics cards are specially designed for large-scale mining, do not do graphics processing, and have no display output. In addition, NVIDIA has also launched the RTX 3060 with limited mining performance. According to NVIDIA's settings, once Ethereum mining calculations are detected through this graphics card, the mining performance will be limited to about 50%, thereby curbing miners from rushing to buy products.

The miner mentioned in the previous article told the reporter that NVIDIA's ideals are great, but the reality is cruel. In fact, the miners don't really care about the performance restrictions on the RTX 3060. "If one doesn't work, I'll install two, and there are cracked versions on the market now." As for CMPs designed specifically for mining, the miner said he would not consider them because these graphics cards can only be used for mining, and "the second-hand circulation value is too poor."