Top 7 Reasons Why Graphics Cards Are So Expensive

Updated on October 2, 2022 Chris Martin Blog

When people try to buy a good graphics card for their computer, they are often very upset by how expensive they are. It raises the question of why graphics cards are so expensive.

The quickest answer to that question is that there aren’t enough silicon chips. A recent global chip scarcity has driven up the price of graphics cards throughout the world.

But how did this occur? Let’s get into the nitty-gritty of the present GPU economy and how graphics cards become so pricey so quickly.

What Is A Graphics Card?

To understand why graphics cards are so expensive right now, you must first know what a graphics card is.

Graphics cards are the hardware that display images on a computer screen. They are classified into three types:

Integrated GPUs

11th gen intel core processor 1

Integrated GPUs are embedded within the CPU and cannot be changed. Every computer comes with an integrated graphics card that is built into the processor.

These GPUs typically offer low to mid-performance and will not provide improved frame rates for heavy-duty gaming or professional graphic design work.

Dedicated GPUs

zotac gaming geforce gtx 1660 super twin fan

Dedicated GPUs are separate pieces of graphics hardware that fit into an expansion slot on the motherboard of the computer. These graphics cards are easy to replace and can be upgraded.

As newer graphics cards are released each year, this is extremely beneficial because it prevents a PC from becoming obsolete and makes it future-proof.

They’re normally the most expensive, and if you want a dedicated graphics card for Photoshop, it may get much more expensive. Throughout this article, we’ll be specifically referring to them.

External Graphics Card (eGPU)

razer core x external gpu enclosure
Razer Core X External GPU Enclosure

eGPU is an excellent graphics option for compact laptop computers. They can be connected via USB and can easily improve the graphics performance of any laptop. As laptop GPUs cannot be replaced or upgraded, they are the most cost-effective and optimal option.

What Are Graphics Cards Used For?

Modern-day graphics cards are super-advanced in every way possible. They can perform huge amounts of calculations and are one of the most advanced components of a computer.

Gaming and other complex graphics processing are two of the most common applications for graphics cards. Graphics cards excel at 2D graphical jobs, but they also excel at realistic, high-resolution 3D graphics.
It’s even more useful in areas like photography and video production. They are perfect for this industry since they can process a large number of pixels in a short period of time.

GPUs are used both for research and to mine cryptocurrency. In both of these fields, you need to be able to do a lot of data processing quickly. It’s easy for graphics cards to do because it’s one of their main tasks.

Why Are Graphics Cards So Hard to Find?

Because of the COVID-19 pandemic, there were problems all over the world with the supply chain. It also had an impact on the graphics card market, making them difficult to come by. It sometimes makes them pricey or overpriced.

A graphics card is also worthless without the silicon chip within it. However, due to the global scarcity of silicon chips in 2020-21, manufacturers that build high-end GPUs, such as Nvidia, were unable to obtain enough silicon chips to manufacture GPUs. These businesses simply couldn’t satisfy the ever-increasing demand in a timely manner.

Because of these factors, the remaining graphics card stock on the market sold out rapidly as well.

Why Do Graphics Cards Sell Out So Fast?

Because of the pandemic’s poor output, most GPUs on the market were immediately sold out. However, this quick sell-out was not only due to the gaming community. Some bots and scalpers also buy it automatically.

Another factor is cryptocurrency mining. Cryptocurrency mining and bitcoin are still popular, with 2020-21 graphics cards in high demand for faster mining results. Crypto or Bitcoin miners frequently use multiple cards to mine since more GPU power means more money is made.

Most crypto mining setups need a lot of GPUs to work at the same time, so these people buy a lot of GPUs. It makes the gap between supply and demand even bigger and drives up their prices even more.

Why Are Graphics Cards So Expensive?

Now that you have a better idea of what a graphics card is and what it does, let’s try to figure out why they cost so much.

There are a lot of reasons why graphics cards cost so much these days. Above all, it’s mostly because there aren’t enough silicon chips in the world. Let’s look at some of the main reasons why graphics card prices have gone up so much recently:

1. Global Chip Shortage

computer chip

The lack of silicon chips around the world was the main reason why graphics cards were so expensive back then. This shortage happened mostly because of three things:

Double Booking

Double booking was one of the main reasons why there weren’t enough chips in the world. It entailed simultaneously booking things for two parties. During the US-China tech war, chip buyers were concerned about supply chain security.

As manufacturers began to double book, a chaotic and crisis scenario developed, hurting both sides as well as the entire world.

Silicon Shortage

Another significant factor is the worldwide silicon scarcity. Almost all of the silicon in electronics like phones, computers, and laptops can be recycled. But the problem is that most people don’t recycle and just throw away their electronics.

This made the lack of chips even worse. Since electronic devices were just thrown away, they weren’t being recycled. Instead, they were being thrown away.

Silicon may be found in everything from computers to phones to airplanes. However, as a result of the crisis, manufacturers all over the world were forced to reduce or limit their output.

It caused a new problem, tremendous demand with little supply, which we’ll discuss later.

2. COVID-19

covid 19

COVID-19 has played a significant role in the worldwide chip scarcity. Because of the pandemic, production and manufacturing factories throughout the world ceased operations. No one could leave their homes or go to work.

It meant that demand was going up, but production wasn’t going up, so there was a shortage. The pandemic had a big effect on the GPU economy, just like it did in all other fields.

3. Extreme Demand

extreme demand

During the pandemic, demand for gaming technology such as RTX graphics cards skyrocketed, since everyone was bored and stuck at home. In the early days of the lockdowns, especially in the US and China, there was a huge increase in demand for graphics cards and building PCs.

It made more people want GPUs. However, due to the worldwide chip shortfall, supply could not keep up with demand.

And we all know how the story ends: when there is a high demand for a product but not enough on the market, the price goes up a lot. This is exactly what happened with graphics cards.

4. Import Tariffs

tariffs are a big reason why graphics cards are so expensive today

Tariffs are a big reason why graphics cards are so expensive today, which is not what you might expect. The pandemic didn’t just change supply and demand.

Shipping between Asia and North America has been so messed up lately. Getting goods into the United States now costs a lot more than it used to.

In addition, under the most recent administration in the United States, additional tariffs were imposed on foreign goods. It imposed a 25 % tax on graphics cards imported from China. The extra cost is passed on to US consumers in the form of higher prices that keep on rising.

5. Cryptocurrency Mining

cryptocurrency mining

A good graphics card is what crypto miners want most. They frequently buy cards for their crypto mining setups. These individuals have high standards for the graphics cards they will employ in their setup.

The work of crypto miners includes a lot of mathematical calculations. Graphics cards, fortunately, include several ALUs (Arithmetic Logic Units). It can do many arithmetic or mathematical operations with ease.

Cypro miners love GPUs since the better the card, the faster they can mine. Most of the time, they go for high-end cards like RTX, which gives a bigger advantage. Crypto miners have moved into the market for high-end graphics cards and don’t plan to leave any time soon.

Since their setups need to use more than one GPU at the same time, they buy GPUs in bulk from manufacturers to save money. It causes a shortage, and manufacturers can’t make enough to meet the demand.

6. Scalpers

scalpers are a big part of why graphics cards cost so much

The graphics card market isn’t just crowded with crypto miners. Scalpers are a big part of why graphics cards cost so much.

This illicit business is purchasing things in bulk and reselling them at a profit when demand grows. This is how scalpers make quick and big money from reselling items.

Graphics cards are a great product for scalpers right now because desperate customers will pay a lot of money for them.

Scalpers can get their goods through unlawful means. But in many places in the world, it is still legal to scalp. There are no federal laws prohibiting scalping like there are in the United States, however, a few states have passed legislation prohibiting it.

7. Specific Characteristics of GPUs

rtx 3070

Up until this point, you’ve only seen external causes for why graphics cards are so expensive. Aside from these considerations, graphics cards are often an expensive computer component. It is because they are extremely strong and have particular features that lead their price to skyrocket.

Now, let’s look at a few of these.

Actual Build Quality

The higher build quality of graphics cards is one of the key reasons they are so costly. Each year, new technologies are added to graphics cards, and they are made with higher-quality materials.

Because of improvements in chip technology, heat dissipation, and other areas, GPUs now need to be made from even stronger and higher-quality materials. It naturally causes a slight price increase.

Today’s graphics cards must also meet the demand for new games and software. It means fitting more into the same small space.

VRAM is a good example of this. GPUs today come with 16 or even 32 GB of VRAM to support the latest games and software. Naturally, when technology improves and can put thus much capacity into the same tiny form factor, manufacturers want a greater price.

When you think about all of these things and how good the graphics cards are, it’s easy to see why the prices keep going up. Manufacturers can’t stay in business if they can’t make money off of their products, so they have to keep putting up the prices of their more expensive ones.

RTX and other cutting-edge features

geforce rtx 2060

In the last part, we discussed how GPUs are always developing to meet demand. A good example of this is RTX, which is the newest type of feature that most modern GPUs have.

RTX, or Ray Tracing, is a technology that allows games to simulate how light behaves in the real world. Simply said, they “trace” or follow the path of light as it would appear in the real world and attempt to visualize it in the game.

As you might have guessed, this is a very hard thing to do. Because of the difficulty, Ray-traced visuals could not previously be rendered in real-time.

As more and more GPU manufacturers are developing their own RTX feature, the prices of their new GPU lineups rise. This, of course, increased the price.

Frequently Asked Questions (FAQs)

Are Dedicated graphics cards essential for a computer?

Not at all. For gaming, a dedicated graphics card will come very helpful. If you want to play the most recent games on your computer, you’ll need a graphics card. However, unless you’re doing graphics-intensive work, you don’t need a dedicated graphics card for your computer.

How much GPU RAM do I need on my graphics card to play games?

You need to get a graphics card with at least 6GB VRAM for 720p and 8GB VRAM for 1080p gaming. If you play with every setting turned up, you’ll need even more memory. And if you play games at very high resolutions like 4K, you should have between 12 and 24 GB.

To get the best performance, you should also pay attention to things like the clock speed and architecture of your GPU, the types of memory, and the Memory bandwidth.

How much RAM do I need for gaming?

Most games say that you need 16GB of memory to play quickly and well. If your computer has this much RAM, you can choose which games to play. You can also avoid problems like lagging and stuttering.

If you’re on a tight budget, a minimum of 8GB is generally sufficient for most games. Any lower isn’t recommended at all.

Is it possible to run a PC without a dedicated graphics card?

You can get by without a dedicated GPU– especially if you’re not gaming. Every computer has integrated graphics with its CPU, which is sufficient for most tasks. If you don’t plan to play games, you don’t need to spend the extra money on a graphics card.

Conclusion

Hopefully, you now know why graphics cards cost so much. As time goes on and computer technology gets better, prices are likely to increase.

Still, the global shortage shouldn’t last too long, we hope. Don’t worry too much about it. If you really need to buy one, we suggest keeping an eye on the market for a few weeks before you buy to get the best deal.

Recommended graphics card list:

Prices pulled from the Amazon Product Advertising API on:
About Chris Martin
Chris Martin is a professional tech writer. He's been covering tech tutorials, hardware reviews, and more as a professional writer for over seven years now and it doesn't look like he'll be stopping anytime soon! In addition to writing about the latest gadgets on the market, he also covers topics such as how to set up your home network or troubleshoot any computer problems you may have.

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