A PERFECT STORM: WHY GRAPHICS CARDS COST SO MUCH NOW
PCWorld|May 2021
IT’S COMPLICATED.
BRAD CHACOS

It’s a bleak time to be a PC gamer. Nvidia’s new GeForce RTX 30–series and AMD’s new Radeon RX 6000–series graphics cards (go.pcworld.com/nwgf) blaze new performance trails compared to last generation’s disappointing offerings—but most people have no chance of getting their hands on either, especially not at a sane price. New graphics card stock drops disappear in minutes, if not seconds, at online retailers, often at crazily high prices. Many of those cards reappear shortly thereafter on resale sites like Ebay and Craiglist for twice their suggested price, or more.

Here’s a very tangible recent example. AMD’s Radeon RX 6700 XT (go.pcworld. com/67xt) launched at $480 in mid-March. We said that in a sane GPU market, the price was about $100 too high for the performance offered. Sapphire said it would charge $580—an additional $100 premium—for its fantastic, custom-designed Nitro+ variant (go.pcworld.com/ntrp). When the Nitro+ 6700 XT actually hit the streets at Newegg, however, it cost a whopping $730 and still sold out in no time. The card is currently going for over $1,000 on Ebay (go.pcworld. com/ov1t). Most people have had more success claiming a vaccine shot than a new GPU this year, unbelievably enough.

So why do graphics cards cost so much right now? It’s more than just the scalpers and cryptocurrency geeks that everyone likes to blame. Let’s dig into this perfect (s***)storm.

1. DEMAND IS WILD RIGHT NOW

Demand for gaming hardware blew up during the pandemic, with everyone bored and stuck at home. In the early days of the lockdowns in the U.S. and China, Nintendo’s awesome Switch console was red-hot. Even replacement controllers and some games became hard to find.

Nintendo’s Switch supply was much more available as time wore on, but when the new graphics cards and next-gen PlayStation 5 and Xbox Series X consoles were released last fall, they also suffered from overwhelming demand (and still do). PC gaming boomed during the pandemic, with Steam setting fresh concurrent user milestones (go.pcworld.com/mile) seemingly every other week.

People just want to play. Lots of people—even ones who weren’t gamers before.

2. SUPPLY WOES

Even though both Nvidia and AMD have said they’ve been shipping as many graphics cards as in prior launches—or even more—it hasn’t been enough to keep up with the overwhelming demand, for a few different reasons.

On the AMD side of things, the company launched not only the Radeon RX 6000–series last fall, but also the best-in class Ryzen 5000 desktop (go.pcworld.com/50dk) and laptop processors (go. pcworld.com/50lp) and those next-gen consoles, which both feature AMD chips that marry Ryzen and Radeon on a single die. The company also plans on launching mobile Radeon RX 6000–series GPUs for laptops soon, too.

Every one of those products is fabricated by the TSMC foundry in Taiwan on the same 7nm process. They’re all fighting for the same 7nm chip wafers. AMD likely needed to prioritize wafers for the next-gen consoles during the crucial holiday sales period as part of its agreements with Microsoft and Sony. Ryzen CPUs—which have also been in short supply (go.pcworld.com/sply)—not only best Intel’s champions for the first time in a long time, but use much smaller dies than the large Radeon chips, so they’re likely to remain higher priority than graphics cards until the 7nm crunch dissipates a bit. That said, TSMC doesn’t expect its “supply chain tightness” to fully relax until new fabrication facilities boot up in 2023 (go.pcworld.com/un23). Sigh.

The introduction of Radeon GPUs with smaller dies (like the aforementioned Radeon RX 6700 XT) could also make it more economical for AMD to focus on churning out graphics cards. The smaller the die, the more chips you can get from a single wafer.

Beyond the AMD-specific TSMC logjam, the chip industry in general has been suffering from supply woes. Even automakers and Samsung have warned that they’re struggling to keep up with demand. We’ve heard whispers that the components used to manufacture chips—from the GDDR6 memory used in modern GPUs to the substrate material fundamentally used to construct chips—have been in short supply as well. Seemingly every industry is seeing vast demand for chips of all sorts right now.

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