The boom in cryptocurrency mining and the pandemic have caused vast shortages of graphics cards. As production became increasingly scarce, stocks were emptied and prices soared.
But according to DigiTime Asia, the production of graphics cards is currently on a better slope. Indeed, according to the newspaper, large manufacturers such as ASRock, Asus, Gigabyte and MSI have managed to significantly increase their activity.
A recovery for 2022
Indeed, the industry notified slight increases in production at the end of 2021.
This trend is expected to continue through 2022 and lead to a 10% increase in shipments over the year as a whole compared to 2021. According to DigiTimes, the shortages could end by mid-year. .
A decrease in demand
While production is expected to increase, demand is expected to decline slightly.
Outside of the laptop industry, the graphics card industry is driven by demand for cryptocurrency and video games. Thus, this possible slowdown in consumer demand could be explained by the change in the mechanism of Ethereum.
Indeed, decentralized exchange protocol should move from a mechanism called proof-of-work (PoW) to a mechanism called proof-of-stake (PoS). Unlike PoW, PoS will not ask to solve calculations before creating a new block. A rather positive point, since it means that this new mechanism will require a much lower power consumption than the PoW. As there will no longer be any need to solve complex calculations, there will also be no need to produce graphics cards in large quantities. Clearly, this change represents a key element of the community’s strategy to evolve Ethereum through Eth2 upgrades.
Once this shift is made, it would make sense to expect a drop in demand for graphics processors (GPUs) from miners. Combined with increased shipments, the price of graphics cards is expected to drop and inventory is expected to rise.