It’s hard to get a graphics card. When can I buy a graphics card at the original price?

In the early morning of September 2, 2020, Nvidia founder and CEO Jensen Huang took out the RTX 3080 from the kitchen behind him and officially announced the launch of the "GeForce RTX 30 series" graphics cards based on the Ampere architecture.

After the price was announced, countless graphics card enthusiasts cheered. The official price of RTX 3070 is 40% of the previous generation flagship card RTX 2080 Ti, but the performance is almost the same. RTX 3080 performance is improved by 40% on the basis of RTX 2080 Ti, while the price is only 55% of the latter.

Influenced by the press conference, Nvidia's stock price rose 3.37% on the day and continued to jump 3.8% the next day, setting a record high.

No one would have thought that such a high-performance graphics card could not be purchased at the original price. This series of graphics cards was nicknamed "air graphics cards" a few months later.

AMD, Nvidia's old rival, also released its new generation "Radeon RX 6000 series" graphics cards on October 29 of the same year as the RTX 30 series was released.

However, the shortage of RX 6000 series graphics cards is even worse than that of RTX 30 series graphics cards. The number of graphics cards used in media reviews even exceeds the number sold on the entire network, so they are also ridiculed by netizens as "void graphics cards."

It is hard for people who don't know the graphics card market to imagine that the RTX 2080 non-official version sold two years ago was priced at 6,499 yuan, and now, two years later, this graphics card can still be sold for 8,000 yuan in the second-hand market. This is simply giving away money.

The graphics cards of 2020 are like the coconut shoes of 2019. They were sold out as soon as they went on sale and became an excellent financial product.

Why can't you buy a graphics card?

The shortage of graphics cards seems to have spread from a niche issue. Even when you watch a video on B station, you can see discussions about the shortage of graphics cards pop up in the comments.

Many people blame the shortage of graphics cards on mining.

When it comes to mining, most people think of Bitcoin mining. In fact, Bitcoin mining with graphics cards was eliminated many years ago. Currently, the mining machine using application-specific integrated circuits is called ASIC mining machine.

Nowadays, when people talk about GPU mining, they are basically talking about Ethereum (ETH). Of course, many other currencies are also using GPU mining, but considering factors such as liquidity, market value, and yield, most GPUs are used for Ethereum mining.

In addition to desktop graphics cards being used for mining, a large number of laptops are also being bought by miners for mining because of the strong computing power of their mobile graphics cards.

Image source network

Ethereum's computing power increased by 1.3 million Nvidia RTX 3080s in the past six months

In the past year, Ethereum's computing power has increased by 130.46% to 361 Thash/s, equivalent to 6 million Nvidia RTX 3070 graphics cards.

ETH computing power growth trend in the past year, source: BitinfoCharts

Since the official release date of Nvidia RTX 3080 on September 17, the computing power of the entire Ethereum network has increased by about 130 Thash/s. If all of them are converted to Nvidia RTX 3080 (calculated at 100 Mhash/s), it will increase by about 1.3 million.

Of course, this does not mean that the main source of the increase in Ethereum computing power during this period is graphics cards. For example, the computing power of the Innosilicon A10 Pro+ mining machine launched by Innosilicon Technology is equivalent to 7 Nvidia RTX 3080 graphics cards. Previously, Linzhi, a mining machine company founded by Chen Min, the former CTO of Canaan Technology, a US-listed company, has launched the Ethereum ASIC chip mining machine Linzhi Phoenix. It is reported that the computing power of this mining machine is equivalent to 27 Nvidia RTX 3080s. However, BlockBeats asked the miners for the details of the mining machine, and many miners said that they had not seen the mining machine in person.

Insufficient production capacity is the main factor for graphics card shortages

The fact that a large number of graphics cards are used for mining is a market factor rather than the main factor that actually causes the shortage of graphics cards. The sooner miners buy graphics cards, the sooner they can benefit from mining. For miners, graphics cards are their productivity tools, so they are willing to buy graphics cards within a certain range higher than the official price. This results in ordinary users (such as gamers or scientific researchers, etc.) not being able to buy graphics cards at a reasonable price (what is a reasonable price is not within the scope of this article).

If manufacturers can increase the supply, then miners and ordinary users can get graphics cards at reasonable prices. Therefore, the imbalance between supply and demand is the main reason for the shortage of graphics cards.

In 2020, the global demand for the chip industry as a whole has increased due to the epidemic. As Bloomberg recently reported, the global semiconductor industry is facing a chip shortage crisis. According to public information, Nvidia's RTX 30 series graphics cards are manufactured by Samsung and use an 8nm process. The only foundry that currently meets this manufacturing process is the S1 factory in Giheung, South Korea, which is a production line built in 2005. In March 2020, an employee of the factory was infected with the new coronavirus, but officials said that the factory's operations were not affected.

Image source: Samsung

The reason for AMD's shortage is the same. AMD's RX 6000 series graphics cards are all manufactured by TSMC and use 7nm technology. However, TSMC's production capacity is only about 150,000 wafers, of which AMD's CPU Ryzen 5000 series and graphics card RX 6000 series only have a production capacity of about 30,000 wafers. The remaining production capacity is allocated to Microsoft and Sony's game consoles.

When can I buy the graphics card at full price?

Based on previous experience, there are only two possibilities for ordinary users to buy graphics cards at the original price. One is that the price of the tokens used for mining with graphics cards plummets, miners are unprofitable, and they sell their graphics cards and stop buying new graphics cards in large quantities from the market; the other is that graphics card manufacturers expand their production capacity to meet the needs of miners and ordinary users at the same time.

Even if a mining disaster occurs, you may not be able to buy a graphics card at the original price

Since October 2018, the computing power of the Ethereum network has begun to decline dramatically. In less than half a year, the computing power of the entire network has dropped by 50%.

Referring to the price of Ethereum, we can find that the rise in Ethereum price drives the growth of computing power, but the impact of the fall in Ethereum price on computing power has a serious lag. As the price of Ethereum falls step by step, miners will shut down their mining machines and sell their graphics cards after reaching a certain threshold. Miners selling their mining machines regardless of cost is also called "mining disaster".

Assuming that the difficulty and computing power of the entire Ethereum network remain unchanged, the electricity fee is calculated at 0.34 yuan per kilowatt-hour, and the price of Nvidia RTX 3080 is 8,500 yuan, without considering the sale of second-hand graphics cards, the current payback period for this graphics card is 99 days.

BlockBeats produced the impact of Ethereum price changes on the payback period of using RTX 3080 under the above hypothetical conditions:

Increase production or launch mining-specific cards

Increasing production is obviously the best solution at present. However, as mentioned above, the global demand for chips in various industries currently exceeds their production capacity, and it is obviously unlikely to increase the production of graphics cards in a short period of time. In a recent interview, both Nvidia and AMD said that inventory will be extremely tight in the first quarter of 2021, and it is expected that graphics card shipments will be further delayed than expected in the coming months.

In addition to increasing production capacity, providing graphics cards specifically for mining is another solution, which Nvidia also used in 2017.

For Nvidia and AMD, they don't like a large number of miners rushing in to buy their graphics cards. Because as consumer electronics products, miners, a specific group, hold a large number of graphics cards, which may undermine the strategy and product price positioning previously planned by the manufacturer. Take the "sweet-level" graphics card GTX 1060 6G launched by Nvidia in 2016 as an example. Its non-public version is officially priced at 1,999 yuan. However, when the Ethereum mining boom came, the card was priced at more than 3,000 yuan for a long time, exceeding the price of 3,499 yuan for Nvidia's sub-flagship graphics card GTX 3070 Ti. When the mining disaster came, the market was flooded with a large number of GTX 1060s priced at three digits.

The most direct result is that the most popular graphics card in the hands of gamers on the market today is the GTX 1060. According to the latest data from Steam, the gaming platform with the most users, in January 2021, 9.75% of users on the entire platform currently use the GTX 1060. It should be noted that Steam has 120 million monthly active users.

In order to alleviate the situation, NVIDIA cut off the video output port, modified it with the core of GTX 1060, 1070, and 1080, and launched the P106, P104, and GP102 graphics cards dedicated to mining. However, this business was suspended in August 2018 before the mining disaster.

Recently, Nvidia's Chief Financial Officer Colette Kress publicly stated at the 19th JPMorgan Technology/Automotive Forum that if there is a strong demand for graphics cards dedicated to cryptocurrency mining, Nvidia may restart this product line.

However, the prerequisite for Nvidia to launch graphics cards dedicated to mining is that it still needs sufficient production capacity to manufacture chips.

Of course, everything has to wait until the epidemic is over. Perhaps, in a few months, the graphics card market will return to normal.