Current GPU Pricing: You Deserve The Truth. When Will Things Get Better?

hey guys james from tech lens so this is probably going to be the most important video that i've ever made on this channel you see today i want to investigate the current state of gpu pricing and figure out who or what is actually responsible for these ridiculous price increases then at the end of this video we will talk about what you should expect moving forward and if and when pricing will ever return to normal and if i'm being honest i'm actually a little bit nervous about making this video as it might be the stupidest decision that i've ever made from a business perspective there's a pretty real possibility that it might be blacklisted by everyone for the things i'm about to say but you know what i honestly believe that if you make this type of objective content without being honest and without integrity it's not content worth watching and i'm pretty sure that most of you feel the same way but you guys also might have to help me reach out to hardware and box if i get unfairly treated because of honest content they seem to have a bit of experience with this so why is gpu pricing so broken which companies are taking advantage of the situation and when will things get better these are the questions that we're going to answer today let's get into this so a bit of background and recap on our current situation as it's been over a year since i launched the rtx 3080 back on september 17 2020. but this was supposed to be the generation of extreme value we were seeing big price decreases with performance increases across the board furthermore this was also amd's return to competition at the high end this was the promise this is what we were told and this was meant to be the generation that people should upgrade to so it's no wonder why people feel seriously upset right now when gpus are being sold for much higher than the launch price and no i'm not talking about the scalper market i'm talking about cards sold new from official retailers but why is that how did it get that way yes crypto yes scalpers we talk about this a lot during our monthly gpu crisis and availability update videos which i highly suggest that you check out below if you haven't already but also not crypto and not scalpers let me explain you see the current crypto market and scalpers on ebay should actually have zero impact on gpu msrp because those are things that happen after the sale of the product yet somehow many board partner cards are currently being sold by retailers like newegg and best buy for like 50 over their launch price in terms of the rtx 3000 series when it comes to something like the radeon 6000 pricing is even worse and more like up to 100 over their launch msrp so why is that who or what is causing these ridiculous price increases well that's what this video is going to cover and if you follow the channel for any length of time you know me it's going to be a data driven analytical approach to the topic not rumors not hearsay so we're going to investigate the validity of the claims being thrown around the internet as to why pricing has increased things like increased components shipping costs chip shortage tariffs and calculate the absolute maximum cost gpu pricing should have risen by because of these factors to see if it's comparable to the actual price increase of gpus at a retailer level or if something more sinister is going on then what i want to do with you guys is answer the question if the things that are allegedly causing these price increases get better will pricing get better and return to normal but first i want to show you some examples of these massive price increases as they'll be pertinent to our investigations in this video so this is my excel sheet that has taken me an extremely long time to compile mainly because manufacturers have been super cagey about disclosing their msrp for their cards which you would be if well let's take a look at the rest of the sheet here we have known tariff price increases which we will speak about in a bit more detail later and then we have current retailer pricing in my region right here from best buy newegg and micro center people get so surprised when i tell them that i live in the us i understand is the accent but as you can see from this sheet it is going to be us dollar focus in fact it may be even more relevant showing egregious pricing to markets outside the us we'll speak about this a bit more in a bit but the observations that i want you to take note of right now is the gpu launch price right here and the current retailer pricing right here it's worth noting that the cards on the left only state if they're an oc or a non-oc model in brackets right there and i've added what cards we're comparing to in the notes section right here so bear in mind as you can see here there may be a plus or minus 0.5 based on whether we're comparing between an oc model and a non-oc model and in compiling this data i've also tried to filter out listings that i think are old or using old pricing as you can see right here from the gigabyte gaming oc we have a listing for 999.99 and 1079.99 i'll be taking the higher listing price because i believe that to be more truthful for the current situation so reflecting on this data the main questions i have are why is pricing for the founders editions cards not increased why the evga cards not inflated as much compared to everything else and one of the cheapest cards from msi and zotac increased by the highest percentage these are the things that i'm aiming to answer and the answers are likely pretty cynical so to do this we need to investigate the impact of the things that you've been told as to why gpu pricing is so high right now and see if they are actually true [Music] because of the global pandemic there is truth to the claim that global shipping costs have increased but likely not as much truth as you're being led to believe if we take a look at some of the data collected by the united nations conference and trade and development we can see that in the examples that they give global shipping costs have risen astronomically but the thing that you have to bear in mind is that we're talking about a 40-foot shipping container when we're talking about these costs that is a collateral amount of gpus that can fit into that unfortunately we can actually estimate the shipping cost per gpu with a quick google search we can see that a standard 40 foot shipping container has an internal volume of 2 350 cubic feet and to really give them the benefit of the doubt let's take the dimensions of the largest gpu box that i currently have on hand the msi rtx 3080 gaming z trio the last of the three gpus that i managed to get from the micro center raffle video that i did recently this is a big boy box so it really gives them the benefit of the doubt and help let's be even more generous and add an extra 10 for additional packaging while also using the highest amount that i've seen for shipping costs as reported by the wall street journal at 24 000 for a next day shipping container that also includes inland distribution costs bear in mind that there's no way that this would be the actual cost or relative cost if they're only buying a portion of a container through a third party so we're being extremely generous in our calculation but on top of that let's take our generosity to the next level and say that shipping a gpu was previously free for manufacturers which it absolutely wasn't but even if it was free the difference between free and the highest shipping cost that i can find would only mean an additional shipping cost of just under 4.50 per gpu which given the amount of media retention around how recent high shipping costs have inflated the price of gpus 4.50 really doesn't seem like a significant impact compared to how high retailer pricing is right now it seems pretty inconsequential nevertheless it's not the only claim to increase costs and we will save that number for later [Music] increased material and chip costs actually go hand in hand as they come from shortages and the bill of materials for manufacturing your gpu so to break down the cost increase let's start with the materials and the component tree before we talk about the actual graphics processor that lives in the heart of the gpu and again because of the global pandemic the price of everything that makes up a gpu we're talking copper plastic aluminium even the pcbs they've all increased in price so again let's overestimate this give them the benefit the doubt and let's say that the weight of a gpu was 100 made out of the most valuable material in that list which is copper so let's take the msi gaming z trio 3080 again a card that weighs just under 3.4 pounds so the highest price that copper has ever been was back in may this year at almost 4.78 per pound this means that if the entire gpu's weight was made out of the most valuable material the gpu was made from at the highest price that is ever been in the last 25 years compared to the lowest price it has ever been in the past 25 years we would expect to see a price increase of 14.35 and let's say that gddr6x is 1.5 times the price of gddr6 and has seen a 20 cost increase because of the pandemic both of those i think are pretty generous given the fact that nvidia might legitimately be micron's only customer for gddr6 and it likely isn't 1.5 times more expensive nevertheless that's a rough increase of 36 dollars for 3080 and 86.50 for a 3090 given it has 2.4 times the memory let's also go ahead and add an extra 25 for excess costs in power delivery fans smds packaging so in my opinion we're being super generous and looking at a price increase of about 80 dollars for a 3080 and 130 for a 3090 and for simplicity we're also going to say 80 for a 6800 xt 6900 xt as they use more memory than 3080 but it's cheaper memory and that roughly aligns with our calculation but also bear in mind that this would be less for a card that doesn't have as robust cooling or power delivery but when it comes to the actual processor on a gpu the thing that you have to realize is that nvidia and amd don't actually make gpu cores they design them that means that the nvidia ga102 cord that sits at the heart of something like the asus rog strix 3080 isn't even made by nvidia it's manufactured by samsung using their 8 nanometer node similarly the rdna 2 cores using amd's current 6000 series gpus are manufactured by tsmc using their 7 nanometer node and both samsung and tsmc have a plethora of other customers competing for allocation across their node stack because of this it does make it extremely difficult to calculate the cost of a standalone chip as one amd and nvidia only know the true cost of what they pay and two the cost can allegedly vary between order quantity order urgency process node and potentially even client tier but nevertheless we do have some information to go on as reported by tech power up the alleged cost of a seven nanometer node wafer is just over 9 300 per 12 inch wafer this is what's used to make the radeon 6000 gpu cores so even if we calculate a 60 yield which is 10 lower than most reports regarding tsmc 7 nanometer while also oversizing each navi 21 chip would cost about 163 dollars screw it let's even run that up to 200 per chip to really give them the benefit the doubt so now that we have our baseline starting number how much do we think tsmc are currently charging over that for the price increase due to the pandemic well several reports state that time of filming is about 20 more because of supply constraints so let's assume that our 200 number doesn't have any markup from tsmc already which it honestly might and on top of that let's even say that they want 30 instead of 20. so for the sake of proving a point and accounting for any unforeseen costs that means that with our massively inflated pricing we're only looking at an extra 60 per navi 21 chip a radeon 6900 xt 6800 xt and for the sake of calculation let's say similar for the 3080 3090 on samsung's eight nanometer note the only reason why i'm comfortable doing this is that tsmc allegedly charged about 20 more than their competitors so what this means is in terms of increased bill of materials we're looking at a max price increase of about 140 for a 3080 6800 xt and 6900 xt and about 190 for 3090 given everything that we've just over calculated but there's one last thing i want to talk to you about one last topic before we find out the numbers that we're getting are even close to the numbers that you're being asked to pay import tariffs between 10 and 25 did come into effect in early 2021 that affected many computer components and other items coming from china it's just that gpu availability was already an issue so it was the most reported on at the time and when this happened a lot of board partners understandably had to increase their prices but by how much well asus released a press statement as reported by video cards stating that they're increasing their prices due to and i quote reflect increases in cost for components operating costs and logistical activities plus a continuation of import tariffs so asus if you read that again have directly said that they are increasing their price to not only reflect an increase in import tariffs but to also encompass at least some of what we have literally just calculated which is an important note for our upcoming calculations furthermore both evga and zotac have their own web sorts where their product pages for these items haven't actually changed so thank god for the wayback machine you guys offer such a valuable service so let's go back to our spreadsheet so here i want to draw your attention to harrison pose back in january 2021 so what that means is that it's not going to affect the 3060 37 tti etc because they were released after that date but for the cards where it does affect it you'll see tariff price increase tariff increase difference tariff increase by percentage and the source of it whether it was from video cards or way back machine through evga or zotac store and as you can see all of these are a nice marketable number it is increased by 70 100 50 it's not like 62.34 but what that shows is a big difference in percentage even within the same brand same product line same silicon just in a different package which is a little bit suspicious and as you can see right here from the zotac twin edge oc and twin edge oc white edition there's a big difference in percentage one being 14 the other one being 20 and i don't know if you guys know this i assume you probably do but the tariffs really don't care if the card is a white edition so something is pretty sus additionally evga is the only one that's consistently within a single percentage within the same product line so what that tells me is that there's is a bit more true to cost compared to other manufacturers and then when we go up the products that to the 3080 3090 something gets a little bit interesting we can see that the msrp increase from tariffs was under 10 which must actually be lower than the tariff increase imposed now that could be for two reasons evj actually split the manufacturing between their taiwan and china facilities so maybe they can offset some of the costs of their chinese gpus with their taiwanese ones and another thing to consider is that evga might actually have some sort of incentive directly with nvidia to keep the cost of their cards lower for consumers i honestly wouldn't be surprised given how closely nvidia and evga work together so for the sake of our calculation we're going to average the known increase msrp around the time of the tariffs without the numbers from evga again being super generous but another thing that i want to highlight and what this doesn't explain is why i've had so many people from all over the world tell me that prices increase sharply at the beginning of the year within their region these are import tariffs specific to the us u.s import tariffs should have no effect on any other country's pricing unless the item hit a u.s port of entry to get there the only examples of this would be something like if the item was bound for canada or mexico and they had to go through a u.s port of entry to get there but going via the us obviously wouldn't happen for most of the world so again pretty suss so it's important to note that we've been primarily using data for high-end gpus but to recap our increased cost investigation we way overestimated the increased shipping cost even going as far as to compare if the shipping was previously free then we way overestimated the increased cost of materials and chip costs by materials use materials pricing the size of the chip and even the chip manufacturing yield to then finally use the average price increase that a major manufacturer stated publicly includes some of what we've already calculated but why have i done this calculation this way it seems that i'm really giving the manufacturers and retailers a huge advantage in this calculation well yes the reason i've done this is kind of two-fold firstly if the number that we come up with isn't higher than the current increase in sale price it's fair to speculate that something else is going on and secondly there's likely to be someone in the comment section saying you forgot this and that is fair i've calculated this as best i can but if this is you you're not only going to have to justify how this not only makes up the price difference we see compared to our calculation but also a significant margin more than that because of how generously we've over calculated everything in the favor of the manufacturers and the retailers so with that said our data when it comes to product weight chip size etc has been tailored towards the higher end products and what that looks like for a 3080 a 6800 xt and a 6900 xt tier card is about 145 without tariffs and 255 dollars with tariffs included and then for the 1390 190 without terrace and 500 with tariffs so let's take a look let's find out who's closest to this number and who's taking advantage from both a manufacturer and a retailer perspective [Music] so i'm actually going to go a little bit before we then take a look at the actual gpu data do you want to know which retailer is price couching the most well that's actually what i wanted to answer with these three columns that show retailer pricing i'm sure best buy newegg and micro center will all say that their prices are set by the manufacturer but that would be a lie because the prices between them often differ even for the same card and best buy actually comes out consistently the worst price compared to newegg and micro center the micro center nearly always comes out cheaper than the other two so if you wanted to know which us retailer was the most and the least consumer friendly from a cost perspective that is your answer so in this data an interesting observation is that the founders editions and amd reference cards remain basically the same price throughout and honestly i think this is because they would be admitting defeat on the msrp argument and receive so much backlash from media and consumers if they raise their prices for those cards so they're forced to keep them at the same price and trickle out cards to keep people at bay they may even potentially be making a lot on them but other than those examples as you can see only the evga cards consistently exceed their price increase targets likely because of what we spoke about earlier in terms of manufacturing facilities and potential incentives no other 3080 and two other 3090 cards in our list managed to hit their targets and to reiterate the target is 255 price increase with tariffs for 3080 and if you're outside the us looking at your local retailer pricing it's 145 without tariffs similarly a 500 target with tariffs for 3090 and 190 dollars without which asus also manages to hit on two of their 3090 cards so i'm going to come back to the most disgusting manufacturer pricing examples in a bit but first let's take a look at the radeon cards down below it was a little bit more difficult to compile data for these but even while being generous with the launch msrp buyer calculations these numbers are way above what they should be especially for the liquid cool strix 6900 xt although the watercooling aspect does add complexity but what on earth is going on with some of those 6700 xt numbers these cards were released after the tariffs and are cheaper to make especially in terms of biller materials so that 145 target should be way overestimated yet the xfx pizza is just blown through a bit and the msi x2 is hovering somewhere in the atmosphere but another thing that i want to consider whilst looking at this data and focusing my attention on amd and nvidia the companies the thing that i want you guys to think about is when we were calculating the increased chip costs we were calculating the cost from the fab to the client the fab being tsmc and samsung production facilities and the clients in this situation being nvidia and amd so when board partners like zotac msi and gigabyte buy the gpu cores nvidia and amd would have already raised the price further so board partners have to raise their prices to at a minimum match that which at a minimum is what i'm sure they would tell you and what i'm sure they would like you to believe but the problem is the numbers don't lie and if that was the only reason all of the cards within a product line like the 3090 would go up by a similar amount which it isn't the case this doesn't prove that amd and nvidia haven't done this to an unreasonable level it just proves that nvidia and amd are not the sole reason for these price increases the most egregious examples of these ridiculous price increases comes from msi and zotac's cheapest cards the msi ventus x3 and the zotac trinity just look at those consistent price increases compared to everything else the worst thing is these are the reference cards with basic power delivery arguably the cheapest to make yet have increased in price disproportionately to other cards that are fundamentally more expensive and in my experience from the many online and install drops that i've been a part of this year these are the best stock cards so it smells like they just jacked up the price for their cheapest cards the most and then just started making more of them [Music] so this is really depressing not only are you having to battle against bots and scalpers but you're also being price gouged before the gpu even hits the retailer especially when we take a look at something like the msi ventus and zotac trinity cards and then on top of that after you've been priced gouged before it even hits the stores you're then clearly being taken advantage of by the retailer too in many instances you can see this when we take a look at the price differences between best buy newegg and micro center i do want to make clear though i'm not saying that these price increases weren't necessary yes there clearly have been legitimate reasons for gpu prices to be higher than their launch mslp but not by the amount that's currently being set like an additional thousand dollars for the zotac 3090 trinity are you actually joking that just smells like a company that only cares about profits and blatantly doesn't give a so then the question is if tariffs went away shipping materials chips all of that goes back to normal what will happen to the state of gpu pricing honestly and i hate to tell you this but i'm a realist giving you real information and it's likely that if everything goes back to normal nothing will change for quite some time the thing that you have to remember is that for-profit companies are just that they're for-profit some may tell you that they're your friend but honestly it's a marketing tactic used to build brand loyalty so that you'll buy from them even the best no questions asked consumer friendly warranty is designed in a way that you're more likely to buy one of their cards again and because of that because of everything that we've seen in the data that we're looking at today if the cost of manufacturing start to decrease they likely won't be passing that cost onto you they'll be passing it on to their bank accounts for as long as possible and unfortunately as evidence of this if you've been in tune with the pc hardware industry for more than even a few short years you'll know that we've lived through things like this things like price fixing which takes the cooperation of competitors to arbitrarily race the price of components to fundamentally just extract more money from you some of you will remember the dram manufacturer price fixing a few years back so honestly and i might get into a bit of trouble for even saying this but i think it's more likely that you'll be seeing issues with chip holding to artificially keep the prices high and less likely that you'll be seeing any benefits from the global supply and logistical constraints being alleviated so with that said there's one last thing that's probably going to happen at this exact moment please subscribe [Music]

Channel: TechLens

Views: 225,723

Keywords: GPU Prices, gpu prices going down, gpu shortage, will gpus ever be available, will gpus get cheaper, will gpus go back to msrp, why are gpu prices so high, gpu restock, gpu msrp, nvidia msrp, amd msrp, will gpu prices go down in 2021, will gpu prices go down in 2022, will gpu prices drop, will gpu prices go down, will gpu shortage end, gpu prices come down, gpu stock, will gpu prices ever go down, 3080, amd, nvidia, gpu, graphics cards, rtx, shortage, msrp, gpu prices update

Id: FG965L0Bg5Y

Length: 21min 29sec (1289 seconds)

Published: Sat Oct 23 2021

Reddit Comments

[u/MetroLynx7]

Given these things are more than I paid for my Xbox I'm finding it VERY DIFFICULT to see how PC is better than console... but I'm more than willing to switch to PC if I could.