Are you discouraged by the extremely high prices and low inventory for graphics cards? In this post, we highlight the main reasons behind the GPU shortage, discuss when it could end, and go over the alternative options for purchasing a video card right now.
It’s nearing the end of 2021 and there’s no sign of the current GPU shortage letting up. For the past year and a half, the global chip shortage has made it very difficult for people to get their hands on some of the best graphics cards for their gaming rigs. There are several reasons for this, from pandemic-induced supply problems to foundry fires in what was an already stretched semiconductor industry.
All these causes snowballed into a perfect storm of over-demand and under-supply, which has ultimately led to sky-high graphics card prices, amongst other things. To make things worse, the shortage has continued for longer than many anticipated, and industry experts don’t think it’ll get better any time soon.
But we shouldn’t throw in the towel just yet, because there is an end in sight, even if it’s not as soon as we might have hoped. And, until then, if you want to get your hands on a graphics card there are things that you can do to increase your chances while avoiding paying an arm and a leg for what were already expensive chips even before the shortage.
What caused the chip shortage?
The most obvious cause of the global chip shortage was the Covid-19 pandemic, which caused a massive increase in chip demand as more and more people started working from home in 2020. People bought more consumer electronics, and companies also had to invest more in cloud services, which meant that cloud service providers had to expand their capacities and buy more chips to do so.
Everything that uses semiconductor chips was affected, from cars to smartphones to graphics cards and even smart fridges. Because semiconductor manufacturing is crucial in these production chains, and because all these different industries get their chips mostly from the same few manufacturers (such as South Korean-based Samsung and Taiwan-based TSMC), the skyrocketing demand for chips exceeded these foundries’ supplies.
This caused stocks to deplete, which in turn made any device that contains a chip rarer, and this led to price hikes. That’s the reason why now, for example, an RTX 3080 graphics card is most often found retailing at almost twice its original intended price.
There were many other factors, too. For example, chip foundry fires and droughts in Taiwan didn’t help, and US-China trade sanctions may also have played a part. Some industry experts have pointed out that even before Covid-19 there were chip production issues lying in wait, such as the boom in demand for 200mm semiconductor wafers.
But ultimately, the global chip and GPU shortage was caused by a simple case of an unprecedented demand which outweighed the supplies of fabrication plants that were already running at close to full capacity.
When will the chip shortage end?
The fact that the chip shortage occurred in the first place should make us at least a little sceptical of the semiconductor and wider tech industry’s ability to predict the future, but we can tentatively say that the chip shortage is likely to last until at least the beginning of 2023.
NVIDIA CEO Jensen Huang recently said, “I think that through the next year, demand is going to far exceed supply. We don’t have any magic bullets in navigating the supply chain.” (via Yahoo Finance). So, despite our highest hopes, getting our hands on a reasonably priced NVIDIA graphics card in 2022 might be just as difficult as it is right now. The same sentiments are echoed across the chip industry, with IBM, Intel, TSMC, and STMicroelectronics anticipating shortages to last until late 2022 at the earliest, and more likely early 2023.
Chip manufacturers haven’t simply ignored the shortage, rather they’ve been investing in and expanding their production capabilities – TSMC, for example, has started building a $12 billion plant in Arizona, USA. But even for TSMC these things take time, with this plant’s chip production only estimated to begin in 2024. It really is a waiting game, at this point.
Will Intel’s Arc Alchemist GPU help?
Aside from chip manufacturers actively working to increase production capabilities, one thing that may give us a glimmer of hope for 2022 is Intel’s Arc Alchemist GPU. Previously known as ‘Intel DG2’, Intel’s upcoming Arc Alchemist graphics card is looking to be a high-end competitor to NVIDIA’s GeForce RTX 3070 and AMD’s Radeon RX 6700 XT and is set for release in early 2022.
While we don’t have any solid performance stats just yet, Alchemist’s specs give hope for a much-needed breath of competition in the graphics card market. Based on what we know so far, it’s likely to have 512 Xe-cores (essentially Execution Units), up to 16GB GDDR6 memory, and might even run at a clock speed of over 2GHz.
So, in terms of specs and performance, there’s much reason to be hopeful about Intel’s Alchemist GPU, because it should offer a high-end alternative to NVIDIA and AMD graphics cards which are so often out of stock or unreasonably priced. The question, however, is whether Alchemist will suffer the same fate of low stocks and high prices?
On the one hand, Intel’s new gaming GPU is being built on TSMC’s N6 node, so any production and supply issues that TSMC has been facing might reasonably affect Intel’s Arc Alchemist production. On the other hand, the chip manufacturing market isn’t so simple. For instance, Intel might correctly predict the production capacity they’ll require given the ongoing shortage, and perhaps TSMC will allot Intel this chip production capacity on reserve, scaling back production quotas for some of their other clients.
Until semiconductor manufacturers increase their production capacities across the board, with such high demand there will always be industries and companies that lose out – for now it seems to be all of them, to some degree. All that one can do is shift the burden from one industry or company to another. But, with Alchemist, who knows? Maybe its release will be the final nudge to shift the burden in the GPU market’s favour.
How can I get a graphics card during the chip shortage?
Given that the chip and GPU shortage is likely to last until at least early 2023 and that the only real solution is for chip manufacturers to increase their production capabilities, if you want a graphics card any time soon you must accept that you’ll be buying during a market shortage. It’s a tricky spot to be in, but it’s not impossible.
If you’re set on buying a new graphics card, you need to take the task quite seriously. By this, I mean that you should be checking multiple sites frequently to look for low-priced options that are in stock. You won’t find an RTX 3080 for its original price, but you might find one that’s ‘only’ 1.5x that price. Similarly, on retail and vendor sites you can often sign up for ‘stock alerts’, which should tell you when the graphics card is in stock. Finally, you can check online compendium stock checkers and articles that give rolling updates on stock levels.
If you do this and prices are still too high for your liking, you can try the used market. Unfortunately, now that the used market is the only option for many, even second-hand graphics cards are often selling at high prices. But, again, with some diligence and frequent checking, you might get lucky and spot one selling for a more reasonable price.
A final option is to buy either a prebuilt gaming PC or a gaming laptop. Because many OEMs will have already signed deals with AMD and NVIDIA to buy their graphics cards in bulk at reasonable prices, these companies’ pre-built PCs or laptops sometimes retail for about the same price as the graphics cards within these systems. This makes them a bargain in the current market – especially if you can find them at reduced prices. And don’t restrict yourself to a single brand like CyberPowerPC or iBUYPOWER, because there are many other companies selling prebuilt RTX 3080 gaming PCs, for example.
At the end of the day, there’s no easy solution to the current market shortage. We must simply wait for semiconductor supply to catch up to the world’s current demands. Until then, buying a graphics card at a reasonable price will be difficult – but not impossible. With perseverance and patience, it’s not unlikely that you’ll find something. If you do, just make sure you grab it while you can, because stocks probably won’t last.