Is the price of video cards finally set to go down?

Is the price of video cards finally set to go down?

The average selling prices of high-end graphics cards have more than doubled in recent quarters due to insufficient supply of GPUs and components caused by the growing demand from gamers and miners. Fortunately, supply is set to improve, also due to lower demand from miners, and as a result video card prices are expected to decline starting this quarter.

Demand for the best GPUs based on AMD's RDNA 2 architecture and NVIDIA's Ampere from gamers will remain high in the coming quarters. Thanks to the fact that the Chinese government is doing everything to crack down on cryptocurrency mining and trading, the number of products demanded by miners will inevitably decrease - according to an article published by colleagues at DigiTimes. Also, as Ethereum mining is no longer as profitable as it once was, miners will have less incentive to buy new graphics cards. Now that mining is no longer as profitable as it did a few months ago, many miners and even companies that had their business centered around this phenomenon are now inclined to sell their hardware as long as they can make money. Flooding the second-hand market with used graphics cards will inevitably affect the prices of new products, which is not particularly beneficial for manufacturers and retailers.

Sources in the supply chain believe that prices will return to normal levels in the second half of the year, therefore over the next few months. This will help attract gamer demand not only for cards, but other PC components as well, including motherboards, CPUs, memory modules, and storage devices. As a result, while video card earnings may decline slightly in the second half of the year, major manufacturers will enjoy growth in sales of other components.

However, we point out that some people in the industry believe that the cryptocurrency mining craze will return and with it the disproportionate prices of graphics cards. In the meantime, as companies like AMD and NVIDIA are striving to improve their GPU offering, we can at least expect the increases will be moderate even if the mining frenzy returns.

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