ZD Tech: Why the price of graphics cards will (finally) come down

Hi everyone and welcome to ZD Tech, ZDNet’s daily editorial podcast. My name is Guillaume seriesand today I’ll explain it to you why the price of graphics cards will finally drop.

After five years of continuous increase in the price of GPUs, the “Graphic Processing Unit”, it may not be affordable yet, but it is definitely possible to afford a graphics card.

But before I understand the reasons for this decline, I need to explain to you why the price of graphics cards has steadily increased over the past five years.

Graphics cards for mining

First, because graphics cards are used to mine cryptocurrency, and cryptocurrency, starting with Bitcoin, has been pretty hot lately. This new use of graphics cards, which is evolving rapidly, has resulted in a real shortage of GPUs in certain recent periods.

Add to that a new, new shortage of electronic components needed to make graphics cards. Supply difficulties directly related to the Covid-19 pandemic hitting Asian countries that manufacture these essential elements for computer equipment.

Result: a price explosion. The average price of a graphics card between 2011 and 2014 was $260. The surge in cryptocurrencies pushed this threshold above $400 between 2015 and 2019, and then to $770 in 2021.

Why are prices falling now?

The new chips

Even now, because the factories are running at full speed. In 2021, 50 million cards were sold, compared to 42 million in 2020. Production capacities are therefore increasing despite the economic difficulties.

GPU prices have fallen as new dedicated chips enable cryptocurrency mining or even artificial intelligence, all specific tasks previously entrusted to graphics cards. For example, Intel recently announced that its next ASIC chip, dubbed Bonanza, will be dedicated to cryptocurrency mining.

And on the artificial intelligence side, the emergence of a new category of processors, the NPU – for Neural Processing Unit – is now increasingly relieving graphics cards of this task.

Intel goes into battle

Finally, a third factor explains the drop in graphics card prices. Intel starts the battle for dedicated GPUs against AMD and Nvidia this year. And that while Intel was hardly or not at all present in this segment.

Intel estimates that around four million GPUs will hit the market this year, enough to seriously drive up graphics card prices.

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