ZD Tech: why the price of graphics cards will (finally) drop

ZD Tech: why the price of graphics cards will (finally) drop

Hello 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 price increases for GPUs, the “graphics processing unit”, it is becoming, perhaps not yet affordable, but at least possible, to afford a graphics card.

But before I understand the reasons for this drop, let me explain to you why the price of graphics cards has been rising continuously over the past five years.

Mining graphics cards

First, because graphics cards are used to mine cryptocurrency, and cryptocurrency, starting with bitcoin, has been quite popular lately. This new use of graphics cards, which is developing rapidly, has led to real shortages of GPUs in certain recent periods.

Added to this is a more recent shortage of electronic components needed to manufacture graphics cards. Supply problems directly related to the Covid-19 pandemic, which affects 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 falling now?

The new chips

Already now, because the factories are running at full capacity. In 2021, 50 million cards were sold, compared to 42 million in 2020. So it is clear that production capacity is increasing despite the economic difficulties.

Next, the price drop 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 previously entrusted to graphics cards. For example, Intel recently announced that its next ASIC chip, called Bonanza, will be dedicated to cryptocurrency mining.

And on the side of artificial intelligence, the advent of a new category of processors, the NPU – for Neural Processing Unit – now more and more frees graphics cards from this task.

Intel is going to battle

Finally, a third factor explains the drop in graphics card prices. Intel will compete this year for dedicated GPUs, against AMD and Nvidia. And this, while Intel has had little or no presence in this segment until now.

Intel estimates it will launch about four million GPUs this year, enough to take graphics card prices seriously.

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