Is the Gaming World Bracing for Higher Chip Costs?

GPU prices are always a contentious issue. During the COVID-19 pandemic, GPU prices rose dramatically as production was slashed, shipping was affected, and those forced to stay home bought better gaming and crypto-mining hardware.

Since then, prices have dropped, although the introduction of GPUs starting from $1,600 has somewhat warped the market.

There are now reports that GPU prices are set to wobble once more, with Nvidia allegedly set to slash production of its RTX 4000-Series desktop GPUs in favor of its gaming GPUs.

Is Nvidia Set to Cut Its Desktop GPU Output?

According to a Hardware Times report , itself taken from a Chinese news site , Nvidia is planning to cut production of its RTX 4060 and RTX 4070 models by up to 50% compared to initial plans. The chips allocated for desktops would instead go towards laptop GPUs to meet strong demand from gaming notebook manufacturers. If the rumors are true, the reduction in GPU production from the world’s leading manufacturer would certainly send prices soaring.

Image Credit: SvedOliver/Shutterstock

This isn’t the first time rumors surrounding Nvidia reducing its GPU product have swirled. Earlier in 2023,Benchlife reported that Nvidia would cut its Nvidia 4070 production following weak sales and to free up manufacturing space. However, those rumors didn’t appear to have an effect on GPU prices.

Still, this isn’t the only speculation regarding RTX 4000 production.TechRadar reports that the supply of the super-high-specced RTX 4080 and RTX 4090 is beginning to dwindle.

As they say, there is no smoke without fire—but without specific confirmation from Nvidia, it’s all speculation.

Should You Upgrade Your GPU Now?

Speculation about GPU prices always raises the question: should you buy a new GPU now? It’s difficult to know exactly what to do, but there are a couple of considerations before you bite the bullet.

First up is Digital Trends report that GPU prices have fallen significantly from their pandemic peaks in 2021-22—but are still well above MSRP for many models. A lower supply of RTX 4000 cards could reverse the recent downward price trend. Comparing September 2022 to January 2023, the average selling price for Nvidia 30-Series cards only dropped around 8%. Cards remain, on average, 42% above MSRP, even after normalizing for tariffs.

Second, is the looming specter of AMD’s strongly rumored RX 7700 XT and RX 7800 XT GPUs, which are expected to launch in September 2023. If the launch of AMD’s previous 7000-Series GPUs is anything to go by, its new GPUs will compete directly with Nvidia’s. For example, the AMD RX 7900 XTX undercut Nvidia’s 4090 by around $600. While the Nvidia 4090 was undoubtedly the better GPU, in effectively every way, most regular consumers are prepared to drop a month’s rent on a GPU.

So while Nvidia may be preparing to reduce its GPU supply, the pressure from AMD may stop prices from rising too far.

Massive Crypto Mining Reduction Reduces Pressure

A third, final, pressure relief could also help to keep GPU prices low. Since the September 2022 Ethereum 2.0 Merge , the Ethereum network no longer uses the proof of work algorithm to secure its network and issue new currency. It now uses the less energy-intensive proof-of-stake consensus method, which doesn’t require the use of powerful hardware.

One of the main pressures on GPU prices during the pandemic and following years was the enormous rise in Ethereum mining, which was primarily achieved using GPUs. Without this pressure and without an enormous amount of GPUs being swallowed up by crypto mining with each GPU generation, prices remain stable.

Keep One Eye on GPU Prices

If you were already considering buying a GPU, waiting until AMD’s new hardware launches later in 2023 could be a good idea. Even if the rumors surrounding Nvidia’s production cuts are true, AMD’s intervention could force Nvidia’s hand.

Either way, it’s best to keep one eye on GPU prices.