GPU shortages
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Shortages of graphical processing units (GPUs) have occurred twice during the late 2010s to 2020s. It first occurred in 2017 as prices of cryptocurrencies such as Bitcoin rose, and mining became more popular. Cryptocurrency prices and mining profitability significantly dropped in late 2018, bringing back the availability of GPUs. Beginning in late 2020 when Nvidia released GeForce RTX 30 series GPUs and AMD released the Radeon RX 6000 series GPUs, the shortage of GPUs was a problem contributed by multiple factors such as COVID-19 and stay-at-home, global chip shortages, cryptocurrency mining, and scalping.
2017 cryptocurrency boom
Bitcoin was created in 2008 but didn't see a surge in popularity until the 2010s. Mining was mostly done by enthusiasts who used consumer-level PCs. It was later found that GPUs have higher hashing power than CPUs. Prices of Bitcoin significantly increased in 2017, and peaked in December 2017 (at a price of $19,783 for one), making it attractive for miners. Subsequently, prices of other cryptocurrencies such as Ethereum and Litecoin also significantly increased, and so did mining.
Effect on GPU availability
Miners snatched up powerful GPUs in droves. Many PC gamers have criticized the acts of cryptocurrency miners, as it made them unable to buy powerful GPUs for their PCs. For example, the GeForce GTX 1060 usually retailed for $200, but prices spiked from $400 to $800. Even Nvidia has gone against this practice and said "We make our GPUs for gamers, not cryptocurrency miners."
2018 crypto crash
Bitcoin prices peaked at $19,783 on December 17, 2017, and many other cryptocurrencies also peaked at prices near that time. Shortly after, Bitcoin prices significantly dropped and continued to decline for months; in October 2018, Bitcoin price went as low as approximately $5,500. As cryptocurrency prices dropped and so did mining profitability, this forced many miners to sell their GPUs as an attempt to recover the costs of buying mining equipment, often below market value. In addition, certain cryptocurrencies such as Bitcoin eventually became unprofitable to mine using GPUs as application-specific integrated circuit (ASIC) miners, which are more energy-efficient and powerful, became more common. However, other cryptocurrencies such as Ethereum are still profitable for mining with GPUs.
2020-22 GPU shortage
Nvidia released the GeForce RTX 30 series GPUs and AMD released the Radeon RX 6000 series GPUs in late 2020. However, multiple factors have led to an ongoing GPU shortage. The COVID-19 pandemic led to global lockdowns have led to increased demand for consumer electronics, and chip production facilities reduced production, leading to a global chip shortage. The profitability of mining Ethereum rose, increasing the prevalence of mining. Ultimately, the lack of availability led to scalping, making the situation worse. Even the value of past generation GPUs such as GTX 1060 increased due to lack of availability for newer GPUs, and its profitability for mining cryptocurrency. Some manufacturers even increased their MSRP due to the increased demand.
Global chip shortage
Due to lockdowns, many people decided to upgrade their devices for entertainment such as computers, game consoles, tablets, TVs, etc. This led to increased demand for consumer electronic devices. The pandemic also led to reduced production of chips. Most GPUs are manufactured by TSMC or Samsung. As political tensions between the US and China rose, many US-based companies contracting Chinese companies to manufacture chips moved to contract with TSMC or Samsung, which were already operating at maximum production capacity. The global chip shortage led to a shortage of GPUs and game consoles (notably PlayStation 5 and Xbox Series X) and affected other industries such as the automotive industry.
Cryptocurrency mining
In late 2020, mining profitability made a comeback, most notably Ethereum. This also led to the resale value of graphics cards correlating to mining profitability. Nvidia released the GeForce RTX 3060 TI to limit its hash rate for mining Ethereum and other Ethash algorithm cryptocurrencies. However, Nvidia unintentionally released a beta driver that didn't have the hash rate limiter, allowing miners to circumvent this limit. Later in May 2021, Nvidia announced revisions of RTX 3060 TI (patched), 3070, and 3080 GPUs that limit its hash rate to 50% with the LHR ("lite hash rate") identifier as a hope to make their GPUs less favorable to miners and sell more to gamers. The 3060, 3070 Ti, and 3080 Ti were released with the hash rate limiter. However, critics believe that scalpers are a much larger contributor to the GPU shortage than miners and that limiting the hash rate will not stop scalpers from buying RTX GPUs to sell at insanely high prices. Nvidia released the CMP HX series GPUs that are designed for mining with no graphical processing capability. They are currently not for sale to the general public. Many cryptocurrency enthusiasts have criticized the CMP HX series due to its higher price, lower hash rate compared to RTX 30 series cards, and lack of resale value after mining becomes unprofitable.
Scalping
Never buy overpriced GPUs that are sold on marketplaces like eBay, Amazon, or Newegg. Shortages of GPUs and game consoles led to scalping, a form of price gouging where one takes advantage of shortages of high-demand products to resell at insanely high prices and overall increase its value on websites like eBay and StockX. At its peak, the prices of Nvidia GeForce RTX 30 series cards tripled on eBay. Many scalpers use bots to constantly check retailers' websites for restocks and instantly order, making it difficult for humans to order. Ethereum mining profitability declined at some point, however, this had little effect on scalping. Scalping has also led to an increase in e-commerce scams. One common scam is fraudulent e-commerce websites, which take victims' money and never ship anything, or ship something unintended such as a different graphics card rebuilt to disguise as a higher value GPU. The same thing also happened to the CPUs, albeit to a lesser extent.
Response from retailers
Newegg introduced its Shuffle program, where interested customers can join Shuffle events for a chance to be randomly selected to be able to purchase a high-demand item such as graphics cards and occasionally 9th generation game consoles. Most GPUs are bundled with other PC hardware such as CPU coolers, fans, motherboards, RAM, power supplies, etc., and game consoles are bundled with accessories and games, which most customers do not need, but as an effort to lower the number of interested buyers. Micro Center sold GPUs and certain high-demand AMD CPUs at its brick-and-mortar stores only. Schedules of restocking are not definite. Despite this, some customers camp outside of Micro Center overnight to line up, as the first people to line up have priority. Later, as a way to discourage camping, Micro Center implemented a random voucher system, where buyers scan a QR code to enter the drawing, and a buying opportunity is eventually given to randomly selected buyers. In addition, Micro Center is limiting sales of high-demand GPUs and CPUs to one per household per 30 days and requires showing ID. To discourage camping, Micro Center implemented a random selection process where customers must scan a QR code to enter the selection process, and if selected, purchase the product within 10 minutes of being selected. EVGA introduced the Queue program, where users can enter to have a graphics card of a specific SKU reserved when available. Priority is determined by the number of registered EVGA products, participation in forums, EVGA Elite status, the recent purchase of another high-demand product, etc. The Step-Up program allows customers to trade in an EVGA product purchased new in the past 90 days for an upgrade and pay only the price difference; it was popular for the ability to enter a queue to upgrade an EVGA GPU that you were able to buy. Older generation GPUs were eligible and could be purchased and used as a loophole to enter the queue to purchase a 30 series GPU, however, EVGA eventually limited the eligibility for Step-Up.
Trivia
- Some retailers such as Best Buy typically drop many GPUs at once and on a somewhat predictable schedule.
- Some retailers such as Amazon tend to drop a small amount per interval of 5 minutes. This makes it more difficult for humans, as bots often instantly order before humans can.
- Best Buy sells GPUs at some brick-and-mortar stores. Similar to Micro Center, some customers are interested in buying a GPU camp outside overnight to have a higher priority in the line.
- Nvidia Founders Edition graphics cards are only sold by Best Buy.
See also
References