Profit of video card manufacturers up 370% due to inflated prices

Profit of video card manufacturers up 370% due to inflated prices

Whether from Nvidia or AMD, graphics cards (GPUs) have seen an exponential price increase since the beginning of the pandemic. The shutdown of factories in Asian countries, the lack of semiconductors in the market and, in the case of Brazil, the rise in the dollar are the main factors behind such growth.

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A study conducted by Jon Peddie Research highlighted that Add-In Board (AIB) graphics card batches increased 24.4% year-over-year, generating about $12.5 billion in the first quarter, a significant increase of 370 % year on year. Some products in the GeForce RTX 3000 series, for example, sell for almost four times their value, effectively turning an entry-level model like the RTX 3060 into a premium priced product.

Why are video cards more expensive?

Analysts who developed the survey believe that people at home were one of the main factors in the increase in demand for video cards in 2020 and in the first half of 2021. To combine business with pleasure, these people invested in computers for work and also for entertainment in moments of rest.

This factor, together with the scarcity of silicon and other components necessary for the manufacture of GPUs, their greater search for bitcoin mining and the purchase of money changers for resale generated an avalanche of demand for the market’s limited supply.

Overall, prices were stable between 2018 and the end of 2019, but from the first two months of 2020 they started to inflate and impact even more expensive models, such as Nvidia’s GeForce RTX 3080 and AMD’s Radeon 6800 XT.

Comparison of GPU price increase between 2018 and 2021 (Image: Playback/Techradar/Jon Peddie Research)

With prices so high, gamers who want to enjoy the latest AAA games may find it more cost-effective in already built notebooks and PCs, as these machines suffer less from low distribution, even though the final price is still affected by the factors from the market.