Hello everyone and welcome to ZD Tech, ZDNet’s daily editorial podcast. My name is Guillaume Serriesand today I explain to you why the price of graphics cards will finally plunge.
After five years of continuous rise in the price of GPUs, the “graphic processing unit”, it will become, perhaps not yet affordable, but in any case possible, to afford a graphics card.
But before understanding the reasons for this drop, I must explain to you why over the past five years the price of graphics cards has been continuously driven upwards.
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 developing rapidly, has created real shortages of GPUs in certain recent periods.
Added to this is another, more recent, shortage of electronic components needed to manufacture graphics cards. Supply difficulties directly linked to the Covid-19 pandemic, which is hitting Asian countries that produce these essential elements for computer equipment.
Result: an explosion of prices. The average price of a graphics card was $260 between 2011 and 2014. The surge in cryptocurrencies pushed this threshold to over $400 between 2015 and 2019. Then to $770 in 2021.
So why are prices going down now?
The new chips
Already, because the factories are running at full speed. In 2021, 50 million cards were sold, compared to 42 million in 2020. So, clearly, production capacities are increasing despite the economic difficulties.
Then, the drop in the price of GPUs is due to the fact that new dedicated chips make it possible to do cryptocurrency mining or even artificial intelligence, all specific tasks that were previously entrusted to graphics cards. Intel, for example, recently announced that its next ASIC chip, named Bonanza, will be dedicated to cryptocurrency mining.
And on the artificial intelligence side, the arrival of a new category of processors, the NPU – for Neural Processing Unit – now increasingly exempts graphics cards from this task.
Intel goes into battle
Finally, a third factor explains the drop in graphics card prices. Intel is embarking on the battle for dedicated GPUs this year, against AMD and Nvidia. And this, while Intel until now had little or no presence in this segment.
Intel estimates to market around four million GPUs this year, enough to seriously vent the heat on graphics card prices.