You may have noticed, as we did when preparing our latest system guide update, that some of the highest-profile gaming GPUs, like the Radeon R9 290 and R9 280X, are hard to find in stock at online retailers right now. Consequently, prices have risen, not just on Radeons but on the competing GeForces, as well.
The question is: why?
We've seen some chatter in forums and at other media outlets about how the rise of GPU-based virtual currency mining could be driving unusually strong demand for high-end graphics cards. It's an interesting narrative, given the way that some early Bitcoin miners apparently profited nicely.
Problem is, I've seen zero concrete data to support this narrative. A handful of media reports have cited a rise in Bitcoin/Litecoin prices as a proof point, but that's weak sauce in the grand scheme of things.
Let's be clear: in this case, the grand scheme involves an already massive and vibrant market for PC gaming hardware. Take this estimate from March for example, which put the market's value for 2012 at $20 billion, with 8% growth from the year prior. This estimate and others project even more growth in the years to come.
Given how dynamic and hotly contested the PC graphics space is, one of the toughest challenges for GPU makers is sizing the market. Through a combination of data-driven projections and gut-feel guesswork, companies like AMD and Nvidia have to place their orders for wafers of GPU chips months in advance of when they'll be selling. If they order too many chips, the company can be stuck carrying millions worth of inventory that's inevitably declining in value by the day. Order too few, and you'll see shortages, rising prices, and—perhaps worst of all—the ceding of market share to your rival firm, if they happened to make a better guess about the demand picture.
We've seen this story play out in nearly every possible permutation over the years. You may recall the Radeon X800 XT Phantom Edition or the shortfall of both 40- and 55-nm GPUs in late 2009. Neither firm has been immune to making bad guesses, and both have suffered simultaneously, at times. I believe in the case of the 40-nm shortages back when, another firm (probably Qualcomm) was absorbing the lion's share of TSMC's 40-nm capacity, leaving the GPU makers both short.
So what's happening right now, with apparent GPU shortages and rising prices, is nothing new. What's different is the widely whispered suggestion that somehow, enthusiasm for virtual currency mining has managed to inject a new and noteworthy uncertainty into a very large, established market that was already difficult to predict.
In the total absence of data, this assertion seems almost laughable. Sure, the scenario has a certain plausibility, since GPUs can be quite good at specific types of computational tasks and there's some speculative value to using them for mining. Heck, mining could be growing massively and driving quite a few GPU purchases. But without concrete proof, in the grand scheme of things, you've got to think the present shortages are being driven primarily by the larger currents of supply and demand in the PC gaming market. To put it tritely, until we see hard data to suggest otherwise, I'd suspect any surge in demand is probably driven more by Minecraft than mining, more by Borderlands than Bitcoin.
Update: Looks like we're starting to find some hard data to support the theory that Litecoin mining is driving Radeon sales beyond what one would expect. Although the competing GeForce GTX 770 offers very similar gaming performance, there are a series of eBay auctions out there, like this and this and this, where R9 280X cards have sold at prices of $450 or higher. That's well above the $299.99 list price, and most of the eBay listings mention Litecoin mining specifically. All told, that suggests folks are paying more specifically for the Radeons, and not just for gaming.
Also, this post by a TR reader attempts to translate increases in coin mining production rates into an increase in GPU counts dedicated to the task. If he has his math right, the potential number of GPU sales there is considerable. We'll keep watching to see what more we can learn.
|Gigabyte's X399 Designare-EX adds Thunderbolt to Threadripper||7|
|No, you can't enable Threadripper's extra two dice||29|
|International Talk Like a Pirate Day Shortbread||25|
|Philips 328P6AU and 328P6VU monitors make the best of USB-C||7|
|Tuesday deals: graphics cards, a mobo, storage, and a big TV||13|
|EVGA Epower V breaks the shackles of stock GPU power delivery||22|
|Reminder: iOS 11 will arrive tomorrow||35|
|In the lab: MSI's Aegis 3 gaming desktop||13|
|Rumor: Eight-core desktop Intel CPUs and Z390 chipset riding in||28|