The GPU Market Might Finally Be Cooling Off

For months now, the enthusiast PC industry has been effectively held hostage by the cryptocurrency market. Demand for GPU miners skyrocketed to such extremes, it became effectively impossible to recommend building a PC. This wasn’t just a theoretical; I wound up steering a friend of mine towards a boutique OEM after he told me he had a $2,000 budget, $1,200 of which would’ve gone to the GPU of his choice had he built his own system. With GPU price inflation pushing cards to double their original MSRPs, or even higher, gamers have coped by sticking with hardware they already owned, buying used cards, adopting AMD APUs (or possibly Intel’s Hades Canyon), and hoping people would move over to ASICs and leave those of us who want to slaughter things at 120fps alone.

And good news! It might, might, might, might finally be happening.

But before I share the good news, I’m not done bitching. The last six months have been a downright miserable time to advocate for home-built PCs, period. Every other price increase we’ve seen — more expensive DDR4, higher SSD prices — could’ve been born in and of itself, especially when the long-term trend in per-GB pricing is still low when considered against the historical record. But no matter how much you loved AMD’s Vega or Nvidia’s Pascal, there was no way to justify paying more than twice the MSRP for GPUs which, in some cases, were 18 months old or older.

According to DigiTimes, Gigabyte, MSI, and TUL are expecting their shipments to plunge by 40 percent this month, courtesy of a sudden drop in demand for GPUs at every price point. Apparently cryptocurrency miners are concerned about the availability of Bitmain’s ASICs and no longer want to invest in conventional graphics cards, since faster, more efficient ASICs might be available by Q3. To give you an idea how insane the profit-taking has been, GPU manufacturers expect to see their profit margins — which have been as high as 50 percent — decline by half, to 25 percent or more. For months, we’ve explained that while AMD and Nvidia benefit from higher GPU sales in terms of total unit shipments, they don’t actually capture much profit when card prices go through the roof. These declines, if DigiTimes is right, are a further indication of who is actually capturing the value here — and it wasn’t Nvidia or AMD.

DigiTimes that Gigabyte sold 4.5 million GPUs in 2017, up by a million cards from 2016, while MSI’s revenues surged by 33.49 percent year-on-year. Presumably the companies have planned for the bottom to fall out of the market, given that we’ve seen this happen before when ASICs first came online for Bitcoin mining back in 2014.

DigiTimes’ track record on these kinds of predictions is mixed, and the hard fork expected for currencies like Ethereum could kill Bitmain’s ASIC plans before they get started, so don’t count this as a given yet. But we’re hoping that in six months, the GPU market will have recovered to something approaching equilibrium, as opposed to overheating like a coked-out parrot in a sauna.

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