Why Are GPUs So Expensive? 07 Secret Reasons!

Why are GPUs so expensive

A graphics processing unit (GPU) is an integral part of modern-day multimedia systems. It has brought a brilliant change in the storage capacity of personal computers for unlimited graphical optimizations.  But this much-needed microprocessor is still beyond the price range.

Furthermore, over the last two years, the price of GPU is hiking in the world tech market.  You have probably noticed that the graphical process unit is even more expensive than other components. Therefore, the users are in trouble purchasing the graphical unit.

Tech analysts are trying to find the real solutions to the uncomfortable price rise of GPU. In this article, we will talk about why are GPUs so expensive in the market. And we will never forget to find the present price quotes too.

GPUs Price Updates and Availability

You might not be happy with the current price of GPUs in the market. The retailers cannot give any good news to the users with an affordable price update. Furthermore, the price graph is going higher than earlier. The manufacturers are claiming different unavoidable reasons behind the price hike.

GPUs price updates and availability

Both of the dominating brands in the market NVIDIA and AMD are facing a common question why the GPUs prices are so high. And their valued customers are in discomfort with the increasing price updates.

For example, the latest price of NVIDIA GeForce RTX 3090 is 10% higher than the previous month. Now it is available at $1500. And it is happening with all versions of the NVIDIA GPUs like GeForce RTX 3080 and GeForce RTX 3070.

You will find the same price inflation with AMD’s graphical processing cards. Its latest Radeon 6800XT is available at $650 which is almost 11% more than the previous month. And the Radeon 6800 and the Radeon 6700XT are available in the market with 16% and 11% more price respectively.

Why Are GPUs So Expensive?

Now it is time to find the real reasons behind the unexpected price hike of the graphical processing units in the market. Here are the facts to find from current market researches and expert analyses. Let’s find the answers.

  • COVID-19 Pandemic

The unavoidable COVID-19 pandemic has drastically changed the world system. Most of the big cities are under lockdown. People are inside their homes and managing their job online on devices. Therefore, there is a substantial gap between the production and demand of GPUs across the world.

During pandemic the sale of smartphones, tablets, personal computers, and other devices has increased, the production of GPU has remarkably decreased at the same time. Which has directly affected the market price of GPUs.

The COVID-19 lockdown situation has broken global tech supply chains. Both the importer and exporters have slashed their shipments down to the big cities. As graphics cards are luxury tech components, the local governments are rigid to the global shipments.

  • Microchip Shortage

Microchip shortage

You know that a semiconductor chip is the heart of a graphical processing unit. And it has a wide range of use in the modern tech world. In modern digital manufacturing, we cannot think of anything except the use of microchips.

For example, the use of semiconductor chips is inevitable in manufacturing computers, tablets, smartphones, computing devices, odometers, airplane black boxes, and so on. Thus, the overwhelming use has caused a market shortage against the production of microchips.

As a result, the world’s giant graphics card manufacturers have drawn back to produce the required number of GPUs. And this is making GPU so expensive at the retail level of the global market. We are being bit bound to buy at the unbeatable price.

  • Global inflation

According to International Monetary Fund (IMF), the current global inflation rate is 2.8% that has an enormous effect on consumer price. When we have to cost more to purchase a particular product than the previous rate, it is an inflationary economic status.

Like any other commodity market, the tech industry is also under the bad effect of inflation. The GPU manufacturers, exporters, importers, and retailers are paying more to their respective positions. Thus, we are also costing more to purchase it.

As a consumer, we are only the silent victim of this economic crisis. We have no such big role to change this situation overnight. So, we have to run into this inflexible market condition for an uncertain future. Certainly, this is a bit disappointing!

  • Trump Tariff

The Trump Administration imposed 25% excessive tariffs on imports from China in response to a trade war between the two countries. And it alarmingly affected the global graphics card industry. And the Biden Administration has yet revised this imposed tariff.

You know that China holds a lion’s share of the tech industry as the second-largest country in the world economy. And this country is familiar to supply graphics cards and GPUs at an affordable price worldwide.

However, this controversial decision of the Trump Administration has curtailed the Chinese GPU supply chains. And we are the common consumers are in discomfort to pay more until the reevaluation of excessive duty.

  • Quality Improvement with More Options

You will agree that the GPU is coming with better quality in the market than the earlier versions. And the latest versions are available with all the stunning features and functions. This is happening with all competitive brands and their items.

And the manufacturers are trying their best to add some extra options with their latest editions to confirm quality user experiences at all. Now we are getting the GPUS featured with much more storage, strength, and compatibility.

So, the improvement of quality is certainly a valid reason for the price hike of GPUs in the market. Of course, you might have no excuses to expense excessive for the excellent one.

  • Growing Gaming & Animation Industry

Growing gaming & animation industry

Computer gaming is a booming industry at present. The video gaming market size will hit $156770 million by 2027. And the graphical processing unit is the much-needed component to create videos and animations.

The ever-growing animation industry has also accelerated the immense use of GPUs. And we may merely think about video gaming and animation out of the graphics units. The GPU manufacturers are even facing hardship to meet the growing demand.

In such a dearth situation, the GPU marketing companies are enjoying the scope to increase the price.  And thus, the growing gaming and animation industries are playing a pivotal role to raise the GPU price in the global market.

  • Crypto Mining

The cryptocurrency miners are one of the main role players to promote the GPU price. You have probably heard the name Bitcoin that describes the cryptocurrency accurately. It is a digital currency to secure online transactions.

The cryptocurrency miners massively use the GPUs to assure the payment against this virtual currency. And they have a significant role to create a shortage in the GPU market worldwide.

A crypto miner has to purchase a GPU of a minimum of 4 GB random access memory (RAM) to initiate the virtual payment gateway. Now you think how many crypto miners are now in the world and how many GPUs are essential for their business?

When will the GPU price get back to normal?

Yes, this is a valid question to avail of the scope of saving money to purchase a graphical processing unit. Although it is tough to talk about the price leaning of GPU, a positive change can come very soon. And you may notice that some of the versions of NVIDIA and AMD have gradually started getting back to the normal prices.

So, if you can continue with your older one; you may wait for some days to avoid the current price. And it would be a great saving approach indeed.

On the contrary, if you badly need a quality GPU for your business; you shouldn’t waste your time for the price to drop.

However, the tech analysts and consumers believe that some far-reaching steps from manufacturers and marketers can shrink the price hike. But it will depend on the collaboration of the world tech giants who control the GPU market.

Concluding Comment

We are feeling hopeful that you have already known why are GPUs so expensive in the local market. If the aforementioned matters go to change, then you can get your preferred GPU versions at an affordable price.

But the possibility of price dropping is not so promising as you are expecting very soon. The COVID-19 pandemic has worsened the situation. At the same time, the crypto miners’ ongoing demand is triggering the supply shortage.

In addition, the prosperous video gaming industry is intensifying the price range against the possible production. For sure, you have no control over these price augmenting issues. However, never miss having a close eye on the regular price updates to purchase it at a reasonable rate.

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