In the last few years, the average cost of GPUs has risen sharply, where we could see a bit of an uncontrolled market. It can be said that prices have been rising due to the shortage of production and distribution due to Covid-19, which drove prices to absurdly high levels.
However, in recent months production has been normalizing, and therefore stocks have increased almost to the point of being able to supply all demand. But even with more production and GPUs in stock, they are still priced very high.
GPU sales
According to a survey, the biggest seller of GPUs is NVIDIA. The green giant dominates 82% of the market, where users claim to use that company’s graphics cards.
Like any market leader company, NVIDIA always goes for its own thing and tries to make as much profit as possible through revenue. In addition, NVIDIA has made it a point to leave very little room for other manufacturers to license its chips to create custom cards.
Another fact revealed in the survey is that the green giant’s margins exceed 60%, while its partners get less than 10%. In other words, the manufacturers, even if they wanted to, are not in a position to lower prices.
As for the market and its partners, NVIDIA is in complete control. It decides when and how to introduce new models. But, on the other hand, it determines the costs it considers reasonable. So, ultimately, it is the consumers who get hurt by this whole strategy.
With all this in mind, people may ask themselves, is NVIDIA’s success to blame for the high prices of GPUs, or is it the consequence of rivals’ inability to keep up with the pace of production?
Does the GPU market need a manufacturer that can compete with NVIDIA?
AMD cannot stop NVIDIA. AMD can’t compete with NVIDIA’s GPUs because of the difference in the range they develop, the features, the performance, or the partners. So, very few AMD GPUs compete in the market with those of the green giant. So it is clear that there is a need for other manufacturers that can compete with NVIDIA.
A good competitor for NVIDIA could be Intel. If integrated chips are considered, Intel is the world’s leading producer of PC processors and graphics chips. Moreover, it recently returned to the GPU market, promising to give gaming enthusiasts powerful graphics cards at a much more affordable cost. Certainly, that is what is needed in the market, competition.
Currently, Intel has a long way to go in the GPU market. However, it can be said that they are heading in the right direction. The company is working to manufacture powerful GPUs at a much lower price than NVIDIA.
A healthy competition between major GPU manufacturers would undoubtedly benefit users as they would have a wider range to choose from with prices to suit all budgets without compromising power.