- I was right! (yells with joy) And it's terrible. At the start of last year, I predicted computer
hardware prices would rise and that they would be
sold out everywhere and yep. Over a year later that
has basically come true. But no, no don't congratulate me because while everything I said was
true, I wasn't even close to being correct about why
there is still a shortage of PC parts and a broader global shortage
of semiconductor products. But now, I've talked
to some people high up in the industry, off
the record, of course. You know how it is. And I finally got the real
reasons why it is so hard for gamers to find the
CPUs and GPUs they need to get them FPS. And this bad news is
brought to you by Pulseway. Pulseway is a remote monitoring and management tool that
we use ourselves here at Linus Media Group. With it, you can control
all your Windows, Mac, and Linux machines from one app. So try it today at the link
in the video description. (electronic music) For those of you living under a rock. Currently, there is a
massive global shortage of semiconductors and everything
that they're used to make. So CPUs, graphics cards,
cars, even fridges. Last February, when I
predicted there would be a global shortage of PC components, my reasoning was that
COVID and the restrictions it caused would interrupt
manufacturing facilities and the logistics companies
that they rely on. It was a fair guess. And lots of smart people
made the same guess, with companies like Apple
lowering their projected revenues. But then in reality, supply of semiconductors was
only briefly disrupted. And for almost all of 2020, they have been pumping out
more CPUs and GPUs than ever. So why are the Ryzen 5900X and RTX3080 weapons grade unobtainium then? The real honest to goodness truth, guys, is because you keep buying them all. When people got stuck working from home that old e-machines that they hadn't used in years suddenly didn't cut it. I mean, it's reasonable to think that in one household, Junior
could be attending a lecture, the Mrs. could be keeping
her elderly parents company on Zoom, and Pops could
have suddenly gotten into day trading or NFTs or whatever. All at the same time. This has led to a trend
reversal that I don't think anyone saw coming. 2020 was the biggest growth year in the PC market in a decade,
with a whopping 20.6% increase in U.S. PC sales in Q4 and, fun fact, Chromebooks are actually
tracked separately. And those reported a
staggering 200% increase in shipments year over year. To add even more fuel to this fire, enterprises have had to heavily invest in their cloud services
with providers like Zoom, Microsoft, with Teams, and
Slack needing to seriously beef up their data centers
to keep up with everyone all of a sudden working
and meeting from home. That's a lot of video data. And while you might think, "Oh, well, okay. Microsoft
needs a new server. How does that affect me?" The truth is that your
Ryzen desktop chip is made of the same chiplets as an EPVC. It's just down to how
AMD glued them together. The two hardest hit sectors,
though, are automotive and graphics cards. And we'll start with automotive
because it's simpler, and because it's the better example of how I was kind of right. Automakers currently are being very vocal about having to stop their assembly lines because they can't get
enough computer chips to go in their cars. But this is actually largely a problem of their own making. Back at the start of the pandemic, most automakers cut their
forecasts and reduce their orders, assuming that demand
for new cars would drop. And it did - temporarily. Until all of a sudden, no
one liked riding the bus with an infectious disease on the loose and demand came roaring back. By the time they realized this though, the fabrication capacity
that they had released had already been sold to someone else. So, okay. I wasn't right. I was just wrong with the automakers. Now for GPUs. Well, it's the miners, right? Let's all say it together, guys. (Bleep) you miners, (bleep)
you miners. (bleep) you miners Whoa, okay. Hold on. Actually, nobody that we talked to actually agreed that miners
were the underlying problem. Like to be clear, they're
not helping the situation. And no one could say for sure if their GPUs are going to gamers or not. But everyone we talked to is
pretty sure that the majority of GPUs are currently
ending up in gamers' hands. It's just that way more
people want GPUs than usual. And there is some data to back this up. Valve generously makes their concurrent Steam user count public. And if we look Whoa! If we look at this, it absolutely explodes at
the start of the pandemic. And then, just as suddenly,
jumps again after the summer when the second wave
forced everyone indoors. Then at the same time, a new generation of GPUs that was finally a solid upgrade from NVIDIA's 10 Series,
along with a new generation of consoles showed up
after seven long years. And we shouldn't be surprised. In fact, we should actually be grateful that the new consoles didn't have a ton of compelling launch titles. This could have been even worse, David! Now you might not realize this, but Nvidia and AMD have
to guess how many GPUs that they'll be selling
months or even a year before the first one
hits a consumer's hands. And while they were able
to assume that demand for Ampere and Big Navi would be a bit higher than previous launches, you know, based on prototype testing data being very promising and
historical sales numbers for premium cards, they
got it wrong. Way wrong. I mean, you might even
remember Jensen saying in the lead up to the
launch of the RTX 3070, "the 3080 and 3090 have a demand
issue, not a supply issue. The demand issue is that,
well, it's much greater than we expected and we
expected really a lot." So, okay. You might say, why don't
they just make more? Well, because again, I'm kind of right. Demand issues cause supply issues. And there are only two companies in the world that can make this kind of bleeding edge tech: Samsung Foundries, and Taiwan Semiconductor
Manufacturing Company, or TSMC. Under normal circumstances,
they would be operating at roughly 80 to 90% of their capacity, which strikes a nice balance between making enough
semiconductors to stay profitable, while offering enough downtime,
to perform maintenance and extend the life of their equipment. If AMD or Nvidia had higher
demand for their GPUs, they would just buy up some
of that 10 to 20% idle time, pump out a couple million more chips, and everything's hunky dory. But the current situation
means that the fabs are already running at 100% capacity. So companies are getting
exactly what they pre-booked and not a way for more. This is why you're seeing some parts of the industry that are
fairing much better stock wise than others. Finding an iPhone, for example. No problem, even though
it uses TSMC Silicon, but that's not because Apple has some kind of extra pull because of their size. They've just been selling fewer iPhones for a couple of years now and the pandemic didn't change that. Same thing for Intel. You can buy their CPUs
at MSRP, no problem. But they've also seen less
growth over the last year. So their demand ended up more
in line with their forecasts. Now obviously then, given the choice, I'd rather be in Nvidia or AMD's
shoes, even if it does mean that gamers are mad at me,
which raises the question then: Is there even a strong
motivation to fix this problem? I mean, high prices are good
for Texas energy suppliers, right? Well, Nvidia, AMD, and TSMC may have all reported record
breaking revenues, but if capitalism has taught me anything, it's that leaving any amount
of potential sales on the table is straight up unacceptable. I'm sure TSMC would love to
sell 20% more wafers this year. So why is it taking so long? It's because they're trying
actually, but it takes a lot of money, like tens of billions
of dollars lot of money. TSMC has plans to build a
$35 billion plant in Arizona, upping their spend from $12 billion after Joe Biden called for $37 billion in federal funding to address
the global chip shortage. As for Samsung, well,
they've also got plans for a $17 billion fab in
the U.S. by late 2023. 2023. So yeah, these plants obviously
won't be done anywhere near soon enough to stop
the shortage of chips today, but then even if they
came online tomorrow, they're only one part of the chain. After AMD or Nvidia get
the wafers from TSMC or from Samsung, a lot
still needs to be done to turn those into a graphics card you can plug into your system. They need to be tested and
sorted for their capabilities. They need to be forwarded
to board partners who need to manufacture PCBs, assemble the cards, QC them, package them. You guys get the idea. And the thing is, all of those factories are also at capacity. So every single part of this
entire supply chain, I mean, even the guys who make
the capacitors that go on the boards needs to
be upgraded, which means that these shortages will
continue for quite some time. How long? Well, we tried to find
out, but unfortunately there seems to be a crystal
ball shortage as well. And no one, even off the
record, was willing to make a solid prediction. One good gauge that you
can use at home though is the used market. Right now, if you were
to use only retailers as an indication, getting a fifth gen AMD
CPU looks pretty difficult, but the thing is, the
prices on eBay are only a touch more than MSRP. What that indicates is that supply and demand for these
have nearly equalized. So it's likely we'll be
seeing them in stock regularly pretty soon. As for RTX 3000 Series GPUs: big yikes. It's estimated that graphics cards are being shipped anywhere
from 10% to 30% below demand. And it's estimated that it will
take three to four quarters for the supply of
semiconductors to catch up and an additional one to two
quarters until inventories are back to normal levels. We interrupt this program to bring you an exciting announcement. I was pondering this
situation where gamers are being forced to pay
outrageous scalper prices for the latest hardware. And I was thinking to
myself, what if there was a way to make 100% sure that the buyer was A, a real person, not a bot and B, a verified actual gamer? Well, now there is. Introducing the Gamer
Gauntlet, or GG for short. All you have to do is pass
through it before everyone else. And for two and a half glorious minutes, you will have reserved a spot to buy one of the hottest products out there at MSRP, or at least MSRP plus that, or import duties or
taxes or whatever else. There's nothing we can do about trade wars or other such things. Of course, the real trick here was for us to get our hands on hardware at MSRP so that we could turn
around and sell it at MSRP. That is where ASUS came in. They were absolutely jazzed about the idea and
somehow scraped together about a hundred RTX 30 Series cards for us to support the
initiative, all of them with key ASUS technologies, like their Axial-tech fan design with a counter-rotating middle fan, their max contact heat sink, which is specially polished
for maximum heat transfer, and their super LA power to
premium power delivery system. But enough talk, where do you go? If you're a verified actual
gamer, listen carefully, because this knowledge is only for you. Go to LTT Store.com forward
slash the numerical digits of the card you wish to buy. So that's 30703080 or 3090 followed by the two final digits of the Konami code. All right, you guys got that? Stock is extremely limited. There's nothing we can do about that. All we can do is make sure that every card that touched
our warehouse will go to a verified, actual gamer. While you guys are on there, we've actually got a promo
running on the store on orders over $30, you can get
$10 off a water bottle. So if you do miss out on
a graphics card this time, at least you can take advantage of that. And as for whether this
program will continue, yes, it will. Both MSI and AMD have
already committed stock for the Verified Actual Gamer program. And we are hoping that more will follow. So guys, make sure you stay tuned. Oh yeah. Back to the video. So yeah, you might be lucky to
get a GPU at MSRP this time, next year. That is unless maybe big crypto
crash leads to big sell-off. Of course, there's another
burning question in all of this. I mean didn't basically
the entire tourism industry get laid off? Aren't we in the middle
of a huge recession? Why is there this unprecedented demand for $800 graphics cards? Well, here's the thing. Normally during a recession,
Honestly, the people who bought the panic sold 20xx series cards are probably sitting pretty happy.
Could have gotten a 2080 ti for <= 500 online back mid 2020
Would have easily held up for another generation or two
So what's the proper way to type the konami code into the url?
Unfortunate that it's just Asus and MSI signing up for this. They aren't even selling their cards at Nvidia MSRP anymore. Even the worst Asus RTX 3070 card is $125 over MSRP at $625. cheapest MSI is $205 over MSRP. Some are like +$300 Is that actually what the cards here were priced too?
Good initiative, but nowhere near enough unfortunately. GPUs are going to be near impossible to find until next year.
I wonder how many of these buyers are gonna flip and sell for a profit.
People suck. Never forget that.
Linus said on WAN Show that he managed to get 500 GPUs. If he's doing 100 each time, I'd expect another 4 of these annoucements.
Anyone actually get one? Too bad no 3060ti in the list. I had to google what Konami Code was. Did you have to type "Up, Up, Down.." stuff in the URL?
God, this is actually a pretty decent and informative video, but that fucking title is such a turnoff for me.
I never minded the thumbnails because they’re easy to ignore. But I have literally 0 idea what the video I’m clicking is about now.
It’s super annoying since I just skip videos like this usually now because there’s like a 70% chance it’s a video I don’t care terribly about. And that’s a shame, because like I said, this video is actually pretty good.
——
Now that said, on the GPU part, he’s right. Miners aren’t the sole reason no one can get GPUs. Nobody’s been able to get GPUs since before 2020, and mining wasn’t talking off then yet like it did now.
Nobody wants to hear that though, because miners are an extremely convenient scapegoat. To be clear, they’re definitely part of the problem, but like I said, look back to when the GPUs launched. No one was mining then, and they were just as impossible to get.
At this point I’m not even sure the mining bubble collapsing would make a huge dent in the secondary market. GPU scalp prices would hopefully become more like pre mining days since no one sane would spend 2-3k on a 3080 at least.
Fuck though, nearly 1.5 years for supply to catch up is brutal. Especially since last fall it was estimated that by feb-March it would be equalized. 1.5 years from now is literally “4000 series will launch soon if it hasn’t already” territory.
Edit: Lotta retconning going on about how easy it was to get a GPU in 2020 lol. (Obviously 3000/6000 series)
Answered all questions then it hung up at “verifying your answers”, 5 mins later I refresh, and it said out of stock.
Fucking kill me