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AI Boom Skyrockets Graphics Card Prices
28 Jan
Summary
- AI data centers are consuming memory chips, inflating costs.
- Graphics cards with high video RAM are becoming scarce and expensive.
- Smaller manufacturers like Zotac face survival challenges due to rising costs.
The global graphics card market is experiencing significant disruption due to escalating demand for memory chips, primarily driven by AI data center construction. This intense demand is causing a substantial rise in memory chip prices, which in turn is making popular graphics cards, particularly those with high video RAM, increasingly scarce and expensive.
Add-in board manufacturers are facing a challenging environment. Zotac, a Singapore-based company, has publicly expressed severe concerns about the future existence of graphics card manufacturers and distributors. They highlight that a stable supply going forward may no longer be feasible, noting sharp price increases for models like the RTX 5090 and RTX 5060.
This situation presents a double whammy for consumer-level GPUs. Not only are memory chips being consumed by AI data centers, but GPUs themselves are efficient tools for AI computations, leading Nvidia and its partners to potentially prioritize high-profit industrial graphics cards over consumer models.
While larger companies like Asus, Gigabyte, and MSI may possess diversified product lines to weather the storm, smaller manufacturers like Zotac, which rely heavily on graphics card sales, are at a significant risk. The escalating costs of essential memory components pose a genuine threat to their operational survival.
