Nvidia has reportedly reduced their manufacturing costs by up to 12%. We have felt the impact of COVID-19 on the cost and supply of hardware. Nvidia decreasing their manufacturing costs may help alleviate the situation.
Hardware industry issues during 2021
The pandemic caused an array of problems, pretty much stopping all ‘non-essential’ businesses from operating as normal. Nvidia in particular faced production pains which has caused graphics card scarcity. Users were unable to purchase the cards at their normal retail price as Nvidia struggled to keep up with the demand. The pandemic also created a surge in gaming and technology usage as we all had to stay at home.
While more people looked to purchase graphics cards for their home computer, Nvidia also faced a major shortage in silicon chips. More demand was also created by cryptocurrency mining, high-performance cards are desired as they offer the best return on investment for miners. This increased demand and shortage of supply created perfect conditions for price gouging and scalping to inflate costs way above their MSRP.
What about the shortage?
GPU prices are steadily decreasing now that businesses are back to more normal operating schedules, resale prices are also much lower. After nearly 2 years, this is a sign that supply is increasing. Our procurement team says “the flow of stock of cards has definitely begun to increase with us seeing more cards in the channel particularly the low and mid-range. Higher-end cards are trickling through but we don’t expect to see a full return to normality until the next generation”.
Will we see a cost reduction?
Nvidia has intentions to pass the savings directly to system builders rather than lower retail prices. Meaning end users looking to upgrade their current card are unlikely to see the benefit but system builders like G2 should be able to pass on some savings.
G2 Digital – Rack computer specialists
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