As reported by WCCFTech, it seems that NVIDIA has informed its partners of a decrease in cost manufacturing that will affect the price they pay for the manufacturer’s GPUs, as long as they commit that this drop will ultimately affect system integrators. This cost reduction would be found between 8 and 12% and they assure that it would take place in the next few weeks, but will it affect the selling price of graphics cards from NVIDIA?
If this information is true, we would be facing a situation that has not occurred in many years, curiously since the boom in cryptocurrency mining with GPUs began, and it would represent the first significant indicator of the first REAL price reduction in the graphics card market. since 2020.
NVIDIA reduces the cost of its graphics, will it affect its price?
The price of graphics cards has been on a kind of roller coaster for months but it always ends up higher, although it is true that in recent weeks we have seen real price reductions and even increases in stock thanks to capitalization of most of cryptocurrencies -especially Ethereum- is plummeting, something that, together with the increase in the price of electricity, is making many miners lose interest.
Keep in mind that in recent months, these falls in the prices of graphics cards had more to do with the law of supply and demand than anything else, since the shortage of chips has continued to plague manufacturers. . However, if it is true that now NVIDIA has informed its partners of a drop in manufacturing costs, it can become something really representative that will finally stabilize the market.
The issue is as follows: NVIDIA would have told its AICs that they will have an 8-12% reduction in the cost of their products, on the condition that this affects the IS (system integrators). Now, this leaves it up to these system integrators (the assemblers) to decide if this reduction in costs will end up being a higher profit margin for them, or if it will instead become a sale price reduction end of graphics cards for consumers.
Lower price is not equal to higher stock
An additional factor must be taken into account in this equation, and that is that the fact that the cost of graphics cards is reduced and even if this ends up having an impact on their final sale price, does not mean that the offer of these improves significantly. simultaneous. In other words, although this news can be very good because graphics cards could end up being cheaper, it does not mean that there is an improvement in stock, so in the end the law of supply and demand could end up causing, again , that stores run out of stock and that prices are shot up as a result.
Today it is still quite difficult to find new graphics cards in stores, and the few that exist usually have prices that have little or nothing to do with the prices suggested by the manufacturer at the time of launch. Let’s not talk about the second-hand market, absolutely plagued by speculators looking to make money by selling above cost price.
However, there are some factors that could favor that, in an effective way, the price of graphics cards continues to fall throughout this year and the next: to begin with, for cryptocurrencies, since the ethereum merger is planned for the second quarter of the year, a fact that will potentially end the mining of Ethereum with GPUs (although another cryptocurrency could always emerge to become a successor) and, with it, the demand for GPUs will be reduced.
On the other hand, we have Intel betting big with their GPUs Alchemist, whose launch will take place this year. As you know, Intel has its own factories and in principle it will not have stock problems, although it remains to be seen if they are able to stand up to NVIDIA and AMD in the gaming field. Finally, Samsung’s yields are improving substantially and NVIDIA has already said that it was exploring the possibility of using both TSMC and Samsung simultaneously to increase its stock. If they choose this path, it is likely that when the RTX 40 Series no stock problem.
The last consideration to take into account regarding the cost, stock and other eventualities in the graphics card market is the current one war between russia and ukraine, something that could end up producing unforeseen increases in the prices of raw materials and logistics. In the source, they talk about the stock of the Neon functions, but apparently they must have a lot of stock and this should not be a problem in the short or medium term.