If this information is true, we would be facing a situation that has not happened for many years, curiously since the start of the cryptocurrency mining boom with GPUs, and this would represent the first significant indicator of the first REAL price reduction in the graphics card market. .since 2020.
NVIDIA is reducing the cost of its graphics, will this affect its price?
The price of graphics cards has been on a kind of roller coaster for months but it always ends up going higher, although it is true that in recent weeks we have seen real price drops and even stock increases thanks to the capitalization of most cryptocurrencies -especially Ethereum- is in freefall, which, combined with the increase in the price of electricity, is causing many miners to lose interest.
Recall that in recent months, these graphics card price drops had more to do with the law of supply and demand than anything else, since the shortage of chips has continued to torment manufacturers. However, if it is true that now NVIDIA has informed its partners of a drop in manufacturing costs, it can become something truly representative that will finally stabilize the market.
The issue is as follows: Nvidia would have indicated to its AICs that they would benefit from an 8 to 12% reduction in the cost of their products, provided that this affects the IS (system integrators). Now that leaves it up to those system integrators (the assemblers) to decide if this cost reduction will end up being a higher profit margin for them, or if it will instead become a drop in selling price end of consumer graphics cards.
A lower price does not equal a higher stock
An additional factor to consider in this equation, and that is that the fact that the cost of graphics cards is reduced and even if that ends up having an impact on their final sale price, does not mean that the supply of these improves significantly.simultaneously. In other words, while this news might be very good because graphics cards might end up being cheaper, it doesn’t mean there’s an improvement in stock, so ultimately the law of supply and demand could end up causing, again, stores to run out of stock and prices to soar accordingly.
It’s still pretty hard to find new graphics cards in stores today, and the few that do exist usually have prices that have little or nothing to do with the manufacturer’s suggested prices at launch. Let’s not talk about the second-hand market, plagued by speculators looking to make money by selling above cost.
However, certain factors could favor that, effectively, the price of graphics cards continues to decline throughout this year and next: for starters, for cryptocurrencies, since the Ethereum merger is scheduled for the second quarter of the year, a fact that will potentially end Ethereum mining with GPUs (although another cryptocurrency could still emerge as a successor) and, with it, the GPU demand will be reduced.
On the other hand, we have Intel bet big with their GPUs Alchemist, which will be launched this year. As you know, Intel has its own factories and won’t have any inventory issues in principle, although it remains to be seen if they can hold their own against NVIDIA and AMD in gaming. Samsung’s returns are improving noticeably and NVIDIA has already indicated that it is investigating the possibility of using TSMC and Samsung simultaneously to increase its stock. If they choose this path, it is likely that when the RTX 40 Series no inventory problem.
The final consideration to be made regarding cost, stock, and other eventualities in the graphics card market is the current war between russia and ukraine, which could end up producing unforeseen increases in the prices of raw materials and logistics. In the source they talk about the stock of the Neon functions, but apparently they must have a lot of stock and that shouldn’t be a problem in the short to medium term.
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