Why GPU prices are NOT likely to drop significantly EVER!

Villan · 5 Jul 2021 at 17:33

Keep waiting...

Don't Buy A GPU Right Now: Prices Hit 6-Month Low In Global Markets As US Prepares For A Price Crash (wccftech.com)

KompuKare · 5 Jul 2021 at 17:58

Ivs said:
Technology gets smaller and cheaper every year.

Smaller just about.
(although look at Intel: once the process leader now still mostly on 14nm)

Cheaper? Not necessarily.
I know Nvidia's JHH sounded like Ryanair's O'Leary when complaining about costs (in JHH's case the cost per transistor).
Over the last few years any increase in density or power efficiency has been met with far more expensive wafers.
Consequently the cost/transistors has barely moved.
Which isn't to say that manufacturers haven't also tried it on.
For GPUs wafer prices are super critical since they are so parallel, scalable and huge.
For CPUs it is less clear.
Zen3's CCD only costs about $17 (plus I/O chip + packaging etc) and that's only about a dollar more than Zen2 did. The increase in Zen3 compared Zen2 is mainly because AMD can and don't seem too concerned about marketshare etc. as they are selling everything they make.

As for general inflation? Well, money printing has been crazy since 2008. Plus certain resources really are running out. So inflation is bound to be high. I'm more surprised it took so long.

Mint8 · 5 Jul 2021 at 18:23

Harold lloyd said:
Hi everybody,
I thought I would put in a post of why inflation is going to keep up and create a new normal in the world.
I know lots of you are sitting on the side lines waiting for a big drop in GPU prices before buying but the days of getting a decent GPU for £500 or £700 are well gone, expect to pay £1k+ for decent and £2k+ for top end.

1. inflation isn't something that just goes up a few points per year when it really appears there is a huge
surge which goes on and on

2. the commodities upcycle is only getting started=inflation

3. the US has trillions in debt, they don't have the money to pay bond holders so the fed and treasury will keep interest rates down and inflate their dollar to try and inflate away the debt=inflation.
Once inflation appears and surges like you seeing now they are *NOT* going to raise interest rates to combat it but keep inflation running high which is in their interests! (and what do you think BOE will do here in the UK!) what you'll get in a short space of time is a currency devaluation not just US/UK but globally.

4. You may know I'm predicting all 3 major US stock markets to go over finally during the last few months of this year. Now this will be the first of the major bubbles to pop followed by the housing bubble a bit later. As the huge bubbles pop you're going to get more currency devaluation=inflation!

5. GPU shortages/prices are just the tip of the iceberg, once you see the surge of inflation go into food and everyday items then its time to be worried.

See what happens in a few months and Prepare for the biggest financial event of your lifetimes!

Regards, Harold

Saw your post literally a few minutes before a meeting with my fin management co.

Outlined points 1 - 4 - to which they pretty much fell about laughing.

So theres that.

mingey · 5 Jul 2021 at 18:32

Its definitely 4K8K reborn !

Purgatory · 5 Jul 2021 at 18:33

Ivs said:
Technology gets smaller and cheaper every year.

You clearly don't work in the technology sector or watched semiconductor node manufacturer prices going up every generation. Prices have been going up and not getting cheaper, what you have probably heard is the cost of a single transistor to manufacture in a semiconductor is costing less each generation, which is true but the devices use more transistors now than ever and even at a single transistor price coming down the final chip is costing more and more per millimeter square as they are denser than ever and the technology and design to do this is costing more and more.

As Chip Design Costs Skyrocket, 3nm Process Node Is in Jeopardy

https://www.extremetech.com/computing/272096-3nm-process-node

Big Trouble At 3nm

https://semiengineering.com/big-trouble-at-3nm/

zx128k · 5 Jul 2021 at 18:48

Purgatory said:
You clearly don't work in the technology sector or watched semiconductor node manufacturer prices going up every generation. Prices have been going up and not getting cheaper, what you have probably heard is the cost of a single transistor to manufacture in a semiconductor is costing less each generation, which is true but the devices use more transistors now than ever and even at a single transistor price coming down the final chip is costing more and more per millimeter square as they are denser than ever and the technology and design to do this is costing more and more.

As Chip Design Costs Skyrocket, 3nm Process Node Is in Jeopardy

https://www.extremetech.com/computing/272096-3nm-process-node

Big Trouble At 3nm

https://semiengineering.com/big-trouble-at-3nm/

Sounds like higher prices.

Purgatory · 5 Jul 2021 at 18:52

zx128k said:
Sounds like higher prices.

Yup and all these new fabs being built as we speak will want to recover their investments as quickly as possible.. Which also means higher costs incoming especially after they have seen what the chips they make are selling at in products sold at 2x 3x 4x the msrp, they will want a bigger slice of the pie in the future too.

The_Arbiter · 5 Jul 2021 at 19:11

Thing is with that, those who bought this time round won't be rushing to buy next gen at high cost again, except those who needed/wanted the 3090/6900xt. Resale value won't hold like it did this past 6 months as furlough/isolation will be long gone. General demand is down. We can see this in multiple areas, even OC's deals this time round didn't go in 5 seconds. Higher production costs are a given, this is common, but the other price increasing causes are fizzling away.

Harold lloyd · 5 Jul 2021 at 19:47

Poneros said:
Pretty much, and if all that wasn't enough then these past few years have amply demonstrated how willing people are to pay more for GPUs. Plus everything exciting that's on the horizon in terms of new tech looks to be ever more expensive (MCM, faster memory/wider configs, >400w targets => req. better components etc.), heck even with Ampere/RDNA 2 looking so good on paper it's really only the higher end cards that looked that way, but the highest end got more expensive (3090 et al) and the middle end has stagnated too (3060 & lower), while low-end has been almost unchanged for 5 years now (RX 480/GTX 1060 tier). Then there's a bunch of other factors as well that will also add on top to it (component shortage medium-term etc), so overall the situation isn't going to change for the better any time soon. High prices are the new normal for most of the '20s.

Yes agree, 3060 isn't much of a step up from 2060Super, high end has great improved performance but sky high prices.
Yep semiconductor shortage for the next few years compounding things.

Harold lloyd · 5 Jul 2021 at 19:53

Grim5 said:
Mate if the global stock market amd housing bubbles pop like you are predicting the price of graphics cards will be the least of problems for people

Well the economy won't tank straight away after stocks pop but you will see inflation creep up and the housing bubble I'd give 1 to 3 years before it pops, it will be like a mirror of what happened to Japan at the start of 1990.

FoxEye · 5 Jul 2021 at 19:54

g67575 said:
Oh no, it's the guy with an agenda again.

He does seem very invested in advising people to buy GPUs at today's prices. Call me a cynic, but you have to wonder why.

Harold lloyd · 5 Jul 2021 at 19:56

CuriousTomCat said:
Once the shortage is over, prices will fall towards MSRP.

You're right about that but I'm predicting about 3 years when GPU supply meets demand.

Harold lloyd · 5 Jul 2021 at 20:00

FoxEye said:
He does seem very invested in advising people to buy GPUs at today's prices. Call me a cynic, but you have to wonder why.

I'm not telling people to buy GPUs, I'm saying get positioned for some big changes in history, get positioned for big financial events appearing soon.
I don't invest much anymore, I retired in my late 30s as I did so well in trading.

heatonpkmassive · 5 Jul 2021 at 20:01

Harold lloyd said:
You're right about that but I'm predicting about 3 years when GPU supply meets demand.

You were much more fun when you were on after Grange Hill Harold :cool:

FoxEye · 5 Jul 2021 at 20:01

Purgatory said:
You clearly don't work in the technology sector or watched semiconductor node manufacturer prices going up every generation. Prices have been going up and not getting cheaper, what you have probably heard is the cost of a single transistor to manufacture in a semiconductor is costing less each generation, which is true but the devices use more transistors now than ever and even at a single transistor price coming down the final chip is costing more and more per millimeter square as they are denser than ever and the technology and design to do this is costing more and more.

As Chip Design Costs Skyrocket, 3nm Process Node Is in Jeopardy

https://www.extremetech.com/computing/272096-3nm-process-node

Big Trouble At 3nm

https://semiengineering.com/big-trouble-at-3nm/

zx128k said:
Sounds like higher prices.

They might as well not bother releasing mid-range cards (like the 6700XT) at prices of £700+. Well, if mining isn't profitable.

No gamer in their right mind is increasing their budget to £700+ for a mid-range card. Unless mining is still so profitable that you can recap that cost (and aren't opposed to mining).

Plenty of products never leave R&D because they can't get the costs down.

If they can't get the costs of 3nm down enough to have mid-range cards at mid-range prices, they might as well not bother.

I know I don't speak for everyone, but the market for a £700 mid-range card (like the 6700XT) just isn't very big. Unless mining...

dave28 · 5 Jul 2021 at 20:02

You dont have to game at 500 fps on 8K and spend a fortune on gaming.

I had some of my best experience in gaming since the mid 1980`s playing gears of war 1 and 2 online.

they were 30 fps 720p ( i think )

people are too fussy with their £2000 graphics card and probably £2000 TV and £4000 PC

Harold lloyd · 5 Jul 2021 at 20:05

Hewligan said:
There is a large inflation risk in our Western economies due to money printing and the run up in debt due to Covid support mechanisms. The hope is that the economy rebounds sufficiently to capture some growth, but not too much to push inflation. The central banks do not want short term high inflation. They will want to deflate debt eventually, but the target would be to allow the power of compounding to work to slowly erode the debt. However, we are just one shock away from a big financial market hit

What I have learned from my many years on this planet (with a Masters in Economics and Economic History) is that guessing the timing is a mugs game. I was convinced the dot com bubble was a bubble and would crash horrifically. I was right, but I was also out by 3 years! 3 years! That was 3 lost years of investment.

A lot of the inflation will be caused by the commodities shortages for 5 years or more, the money printing will put a tail wind onto that.
You're right very few traders can time the market correctly, 99%+ of them should leave it alone.

FoxEye · 5 Jul 2021 at 20:05

dave28 said:
You dont have to game at 500 fps on 8K and spend a fortune on gaming.

I had some of my best experience in gaming since the mid 1980`s playing gears of war 1 and 2 online.

they were 30 fps 720p ( i think )

people are too fussy with their £2000 graphics card and probably £2000 TV and £4000 PC

The top end of the market (like £2k GPUs) is not bounded by any perf/$ metric. The top end is for people who want the absolute best at any cost. Whatever the price, they'll pay it. £2k, £5k, £15k. Who cares?

The price-sensitive segment is the low and mid range.

You can't just say, "Sorry chaps, mid-range is £1k now." Those are your price sensitive buyers and they won't (probably can't) just up the budget like that.

Harold lloyd · 5 Jul 2021 at 20:09

Wrinkly said:
Pricing was where it was due to a balance between cost to produce and what the consumer can afford. What the consumer can afford hasn't changed. Cost to produce will return to where it was due to competition.

You think Intel will save the day with their GPUs?
Everyone knows what Intel prices are like, Lol!
I doubt competition will have a significant GPU price reduction this time around.

Benass · 5 Jul 2021 at 20:11

FoxEye said:
The top end of the market (like £2k GPUs) is not bounded by any perf/$ metric. The top end is for people who want the absolute best at any cost. Whatever the price, they'll pay it. £2k, £5k, £15k. Who cares?

The price-sensitive segment is the low and mid range.

You can't just say, "Sorry chaps, mid-range is £1k now." Those are your price sensitive buyers and they won't (probably can't) just up the budget like that.

This is right there.

PPL cant take 1k gps as normal. It simply will not sell.

At the moment demand is bigger than supply, prices rise. Once supply is bigger than demand prices will fall.

Economics one o one