The Ethereum Effect: Graphics Card Price Watch (Updated)

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InvalidError

Titan
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The problem with predicting cryptocurrencies is that they are unpredictable by nature as nobody has control over them, nothing prevents anyone from forking existing currencies, nothing prevents anybody from starting their own, there are no standards for developing currencies which translates into no way to predict which resources the next currency is going to favor, there are no guarantees that miners will pick your products for mining, no guarantees that difficulty increases won't deter people from mining currently known currencies by the time your products launch, etc.

The lead time for wafer starts at foundries can exceed a year. Can you accurately predict with any degree of confidence what will happen to alt-coins within the next year? That's what AMD and Nvidia would need in order to justify a significant production increase aimed specifically at offsetting mining. If they commit to thousands of extra wafer starts and end up not needing them, cancellation fees will be in the millions of dollars should they fail to find buyers for those now unwanted wafer starts.

It all boils down to this question: is attempting to solve the mining issue to make gamers happier by increasing production really worth taking on millions of dollars in unnecessary additional liabilities? Probably not. People who still want a new gaming GPU still have the options of waiting however long it takes to get one near its MSRP or buy previous-gen. Previous-gen parts remaining desirable due to current-gen parts being perpetually out of stock is win-win for GPU manufacturers.
 

danlw

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Feb 22, 2009
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I don't see why a miner would buy a graphics card without a display port. Once it is "too slow" to mine, I would want to resell it to recoup part of the cost. If it can't be used as a graphics card, that significantly reduces the potential resale price. And I can't imagine not including a display port would make the card that much cheaper.

Just to be clear, I am NOT a miner.
 

USAFRet

Titan
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If they were thinking that far ahead, they probably wouldn't start mining in the first place.
 


You can make those kinds of predictions now, using current knowledge. But months ago when AMD was placing their foundry orders, they couldn't have known what Nvidia's release schedule was going to be. And Nvidia may have had enough of a head start to hold off on finalizing their schedule until they saw exactly how Vega performed.
 
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Deleted member 362816

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Update this article as it is beyond incorrect on prices.
 


Yes, unfortunately that happens fairly quickly with this article. We are making a point to update it periodically, but it takes a backseat to CES this week. If you would like, I can PM you directly when we update it again, which shouldn't be too long.
 
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Please do thanks!
 

lmannyr

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Jan 13, 2018
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For the past week, it has been extremely difficult to FIND ANY 10 series cards for less than $900. They are upwards of 1200 dollars or more today 1/13/18. The demand is there. Need more supply. The prices on this article need to be updated to the higher prices just a month later.
 

USAFRet

Titan
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Supply contracts needed to be changed a year ago to account for this.
Obviously, that is pretty impossible.

And prices spike weekly, not monthly.
 

lmannyr

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Money talks, I'm sure the companies involved and can come up with a solution in the short term. This is now chronic problem.

 

bit_user

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The point is somewhat illustrated by the old saying: it takes 9 months for a woman to grow a baby. However, 9 women can't simply get together and grow one in 1 month. It doesn't matter how badly you want it, some problems actually can't be solved with money.

The same goes with fab capacity. It takes a lot of money and planning to build out new semiconductor fabrication capacity (literally in the $Billions). Because of this, capacity tends to lag demand, otherwise the fabs would quickly go out of business at the slightest dip in demand. So, production must be scheduled and contracted well in advance.

Now, maybe chip makers can buy someone else's fab time, but all semiconductor companies are in the situation of having to deliver chips to their customers (i.e. device makers) on a schedule that will enable them get product to market. If there are unplanned delays, market windows get missed, leading to lost revenue and lawsuits. So, it's not a simple problem.

Also, consider that the ones making the high margins on these volatile prices are the sellers and (to a lesser extent) the board makers. Nvidia and AMD have supply contracts with the board makers and are quite limited in their ability to reap the windfall.

Now, maybe they can negotiate a higher price on future production runs, which they might be able to use to move up their production schedule, a bit. But don't expect any miracles.
 

bit_user

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BTW, perhaps this will help lessen demand (I'm a little surprised not to see this story on here - I actually heard about it in the headline news, on BBC):

https://www.wsj.com/articles/china-quietly-orders-closing-of-bitcoin-mining-operations-1515594021

...although I see Chinese miners are already expanding outside of China to compensate:

https://www.reuters.com/article/us-canada-bitcoin-china/chinese-bitcoin-miners-eye-sites-in-energy-rich-canada-idUSKBN1F10BU

Also relevant:

https://www.forbes.com/sites/rogeraitken/2018/01/11/bitcoin-price-tanks-14-as-south-korean-regulatory-scare-rattles-market/#33e0198377d4

https://qz.com/1171431/egypts-bitcoin-fatwa-cleric-bans-bitcoin-trading/


And this actually happened in December, but I've read Nvidia is sending cease & desist letters to cloud operators that had GeForce GPUs online for customer use.

http://fortune.com/2018/01/07/nvidia-consumer-video-cards/


With all of that, you'd think GPU demand would be headed downward. But let's not forget there's also robust demand from AI.
 

USAFRet

Titan
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Chronic problem for whom? The tiny minority of buyers that purchase and install their own GPU's?
As opposed to all the GPU's in Dell/Asus/CyberPower/etc systems. That were contracted for long, long ago, and already in the pipeline.
 

bit_user

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It's not like the big OEMs have all the supply they want, either. If you spec out a system from them, you'll sometimes find certain GPU options unavailable or with a note saying the ship date will be delayed by months.

I have to say that I expected the situation to be under a bit better control, by now. It seemed like there was pretty good supply during the holiday shopping season, at least.
 

bit_user

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I was thinking some more about fabs, and I have to wonder if groups like TSMC, Samsung, and GF are reluctant to build too much too fast because of moves by China. The Chinese seem to be ramping up their own fabs, and I'm sure nobody wants to build out a new facility just in time for government-subsidized Chinese fabs to steal many of their customers (even just the Chinese ones). Worse yet, it could happen just as the global economy enters the next recession.
 

InvalidError

Titan
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We're in the ballpark of 20G$ for 5-7nm. The ticket price of bleeding-edge process technology is getting ridiculously steep.
 

InvalidError

Titan
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Both AMD and Nvidia favor pro/datacenter products first now with their GPGPU lines launching several months before mainstream GPUs (might be over a year for Volta and AMD's Vega refresh has only been announced for compute) because AMD and Nvidia have 5-20X greater profit margins on datacenter-oriented chips.

The days of affordable mainstream GPUs may be over if you are looking for GPUs made on current-gen process where AMD and Nvidia may be seeking to offset the opportunity cost of spending expensive wafer starts on less profitable mainstream products. We may end up with affordable mainstream GPUs being one process node behind datacenter and high-end GPUs made from GPGPU rejects.
 

bit_user

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Well, that sort of happened with Nvidia's V100, which now powers the Titan V. It's allegedly made on 12 nm. I guess that's what you're talking about? But you still can't call a $3k card mainstream in any real sense, and even the rejects cost so much & are in such high demand that I don't see them ever trickling down to more typical price points.

That said, I can't imagine either company simply walking away from mainstream. Just because it's not economical to make a V100-sized chip, for use in < $1k cards, doesn't mean they'll turn their backs on us. I hope the shortage of 10-series GPUs is a sign that Nvidia is spinning up the fabs with some new mainstream silicon.
 

InvalidError

Titan
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Fabs are getting exorbitantly expensive to build and demand for chips produced on the newest process is ever increasing. What do you do when you have limited availability of a resource? You sell it to the highest bidders, which in turn usually means those highest bidders will use their limited wafer starts for their highest margin products first because they cannot spare any for cheap chips.

AMD and Nvidia are both releasing their new architectures starting with their most expensive (and profitable) HPC-oriented parts, with increasingly long delays before introducing lower-end consumer parts. You shouldn't need much more proof than that to see that they are both distancing themselves from the more cost-sensitive consumer space. Consumers gets new GPUs once the high-end/HPC buyers are done buying and AMD/Nvidia can spare wafer starts for less profitable parts.

Depending on how the jockeying for 7nm wafer starts plays out, I can easily imagine not having affordable consumer GPUs on 7nm in the foreseeable future. Unless you count $700-1300 rejects of a GPU that would otherwise have landed on a $3000-7000 product as affordable.
 

Co BIY

Splendid
A "Cronic problem" where I can sell my product for way over my planned retail price and the market just keeps absorbing them like there is no tomorrow ?

NVIDIA and AMD should probably just keep cranking out their current products until the "pyramid coin" bubble bursts or the world runs out of electricity to make imaginary money.

Prices on this article need to be updated. 1050 Ti is going for $300 if it is available at all.
 

InvalidError

Titan
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If they pump out mainstream GPUs as fast as they can for as long as they can, they'll just screw themselves over when the crypto bubble bursts and the used market gets flooded with heavily discounted GTX1070+, RX*70/*80, Vega56/64 or whatever happens to be mass-deployed for mining when that happens. It may turn the next generation or two of consumer GPUs into low-sellers as they'll have to compete with often faster dirt-cheap previous-gen parts.

This will create a mess for AMD and Nvidia. The bigger AMD and Nvidia's commitment to catching up with mining demand, the bigger that mess will be. I suspect that's why Nvidia resurrected its Founder Edition program to get a pulse on exactly how much actual gamer demand there is compared to mining. (And reap some of that retailer margin inflation while they're at it.)
 


Woops, yeah one of those should have been 580. Fixed, thanks!

The article and chart has been updated now. It exclusively shows the least expensive in-stock GPU in each field from each OEM. At least as of the time of publication. With the current state of the market, that can change rather quickly. I already see one RX 570 that has sold out since we updated the article. Hopefully that doesn't happen too fast though.
 
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