Why are GPU Prices so high in 2022?

Why are GPU Prices so high in 2022?

Since the pandemic started, it hit every aspect of living fairly hard. Of course, one might think this would not affect an activity like gaming. After all, why would a pandemic impact video game consoles, computer components such as graphics cards, etc.?

However, you would be sorely mistaken.

Due to the pandemic, there was an increased demand for computer systems and advanced technology. More people wanted to buy or build personal electronics and gaming PCs – subsequently online retailers struggled to meet the increased demand – and the already high prices of GPUs rose.

And you might see even more expensive graphics cards in the foreseeable future due to increased manufacturing costs, broken supply chains, global chip shortage, etc. This article will go over the various reasons why GPU prices have become so unrealistically expensive.

Not Only Graphics cards have unprecedented demand on the market.

This sudden inflation has affected many gamers’ lives regarding their favorite hobby. Whether it comes to upgrading or replacing graphics cards and other electronics as well – and when you can not meet the requirements for your favorite game – gaming has become less affordable than it was.

The concern everyone has is quite valid. After all, cards at $700 now cost twice that on secondary markets. Such a sharp increase is not only unprecedented but also unheard of.

Let’s start with the most simple and understandable reason: Demand. Now nobody is a stranger to demand and how it works. It’s one of the most basic economic principles of all time. Without turning this into an economics lesson, prices increase when there’s more demand than a company can reliably supply.

Supply Chain and high demand for graphics cards

So why is supply so limited? This is due to a global lack of semiconductors. Semiconductors are a key component of many kinds of electronics. This also includes graphics cards.

Now, you might think that Corona brought on this shortage.

What made graphics cards so expensive pre-pandemic

The truth of the matter, however, is a bit more complicated. The semiconductors shortage was discussed at least before 2010; because it is such a key part of so many electronics that since global electronics demand rose so much, the supply of this key component eventually ran dry. The cover has a part to play in this; however, any pre-existing issues before the pandemic were made significantly worse. Gaming was no exception.

In 2021, Taiwan experienced a severe drought, leaving a water shortage in the country. How would this impact the GPU chip shortage in multiple countries? Or, you might be wondering what water has to do with semiconductors. It takes around 150,000 tonnes of water to clean the wafers that will, later on, become semiconductors. This meant that many chipmakers could not get any clean water, and as a result, chips became extremely expensive – because they became a lot more scarce.

GPU shortage impacted crypto mining rigs

Graphics cards were and are also heavily used in Cryptomining. In 2020, when cryptocurrency exploded in popularity, demand rocketed up into the sky for graphics cards – Nvidia had just released their latest line by then.

Crypto is ever-steadily gaining more and more popularity. A lack of clean water, and a shortage that spans two decades, all came together in recent years to double and even triple the prices of graphics cards.

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