The Graphics processing unit (GPU) shortage and exaggerated card prices have not impacted the shopping volume in 2021. This is according to a report prepared by GraphicSpeak and Tom’s Hardware.
In fact, compared to the number of boards shipped in 2020 during the same time, there has been a tremendous increment in 2021.
This is primarily due to the increased popularity of PC gaming, the increased number of cryptocurrency mining activities and real money online casino canada gaming.
GraphicSpeak and Tom’s Hardware reported that there were 50 million shipments for add-in-boards (AIBs) in 2021 compared to 42 million that were shipped in 2020. This was facilitated by the resumption of normal supply chain and logistics activities, which had been affected by the pandemic.
Demand and Supply
Overall, AIB shipments grew by 29.5% when compared to 2020. The result is a total revenue collection of $51.8 billion in sales in 2021, per the report published by an analyst firm, Jon Peddie Research. This massive figure was undoubtedly influenced by trends where increasing board prices have become the norm.
On the other hand, quarter-to-quarter shipments of AIBs jumped to 3.0%. At face value, this may seem insignificant. However, this number is considerably high – way above the 10-year average of -2.8%.
Analyzing the numbers for the 4th quarter of 2021 reveals that 13.1 million units were shipped between October 1 and December 31.
During this time, AMD’s shipment volume grew by a staggering 35.7% compared to the same quarter in 2020.
AMD’s main competitor, NVIDIA, trailed them slightly with a 27.7% increase in shipment during the same period.
But the biggest winners were Team Green, who maintained their pole position as the market leader, shipping 77.2% of the GPUs.
Increased Popularity of PC Gaming Fueled Sales
Jon Peddie’s Research report also adds that PC gaming significantly contributed to the increased sales of GPUs from both AMD and NVIDIA.
In this category, it is reported that NVIDIA sales soared by a staggering 61%, to a record $12.46 billion in the 4th quarter.
AMD, on the other hand, earned a whopping $4.8 billion. It may not be as much as NVIDIA’s, but the figure represents double what they sold in the past quarters.
Scalpers and Crypto Mining
Of course, the huge sums of money didn’t just come from sales of GPUs to the PC gaming industry. There was more to the story of the 29.5% year-over-year increase in GPU shipments.
The average cost of the GPUs was about $1,200, according to Tom’s Hardware. With this average cost, how did the GPU shipments post huge profit margins for the respective companies in 2021?
The answer is clear – demand and supply, as well as the booming cryptocurrency industry and scalpers.
Graphics cards have for a long time been used by crypto miners. They are more powerful and sustainable, which would benefit the mining process significantly. Because of its reliability, miners were willing to pay top dollar for the best graphic cards in the industry. This created a spike in price and a shortage.
Scalpers further accelerated the shortage of GPUs. Upon realizing the demand increase, many bought and hoarded them in bulk. This way, they could avail the GPUs as they pleased, controlling the price in the process.
As expected, from a financial point of view, AMD and NVIDIA have reaped big from the shortage of GPUs, evidenced by the revenue figures. This has trickled down to the board partners of these two industry giants. It has been reported that ASUS has handed out massive bonuses due to the profits from the crypto-mining GPU sales.
Still, the industry is stabilizing, with different policies being put in place to cut down the prices of video cards. The graphic cards are also edging closer to their MSRP levels.
What to Expect for the Future
Moving forward, new players have joined in the competition of developing GPUs. Intel has re-joined the market it once dominated with its Arc Alchemist cards.
AMD and NVIDIA are also getting ready for the battle of the next generation of GPUs with their RTX 4000-series and RTX 7000 range GPUs.
Should everything return to normal, i.e., enough production of the cards to satisfy the ever-increasing demand, we can expect the shipping volumes for 2022 to exceed 50 million. Having said that, don’t expect the shipping numbers of AIBs to match those of 1998 when 116 million units were sold globally. At least not anytime soon.