Why Are GPUs Back Ordered Until 2019 Crypto Mining Rigs To Blame

July 23, 2018

In recent weeks, gaming enthusiasts have been raising concerns pertaining to the fact that GPUs are sold out everywhere. GPUs have been backordered until 2019 owing to the growing popularity of cryptocurrency mining. Miners have been buying all graphics processing units (GPUs) in the market, something that has driven up the demand and price of graphic cards.

With cryptocurrency miners creating a dearth of high-end and mid-range graphic cards, the industry has experienced an unexpected GPU gold rush. Miners have increasingly been snapping up the GPUs so that they can set up server farms that are dedicated to attaining cryptocurrencies such as Bitcoin. Typically, these digital currencies are awarded after minors solve complex mathematical algorithms.

Why High-End GPUs are Required During Crypto Mining

The process of solving the complex algorithms is commonly referred to as crypto mining. It involves in-depth analytics, and also consumes a lot of power. High-end GPUs are preferred because they guarantee accuracy. Tech-savvy miners need high-end gaming processor cards to beat out their compatriots. These high-end graphic cards make it easy for miners to build strong rigs, which enable them to generate highly valuable cryptocurrencies.

Based on wattage and performance advantages, the most popular graphic cards amongst gamers and miners are NVIDIA GeForce GTX1070, AMD RX580, and AMD RX480. The price of these GPUs has skyrocketed in recent months. For instance, NVIDIA’s GeForce GTX 1070 is currently retailing at more than $700, up from $380 a few months ago.

Top of the range graphic cards such as a 6GB GTX 1080 six pack, are currently priced at more than $6,300. Even so, these high prices haven’t dissuaded miners. Needless to say, the high-end cards are out of stock. According to computing experts, the cryptocurrency mining market for graphic cards will remain volatile in the foreseeable future. It will also be highly dependent on the entry and exit of cryptocurrency waves from early phase to mature phase.

Price Favoritism Measures

With all high-end GPUs back ordered until 2019, retailers are putting in place measures to ensure that lower-end GPUs are only reserved for gamers. Retailers are limiting the number of the available lower-end graphic cards that miners can purchase at a time. They are also showing price favoritism towards gamers, who are their traditional clients. GPU manufacturer NVIDIA recently asked its retailers to prioritize gamers over miners when selling graphic cards.

How GPU Makers are Reaping Big

At the start of the GPU rush, Advanced Micro Devices (AMD) graphic cards were the most popular due to their availability and affordability. However, their supply dwindled fast and finding these cards became difficult. This created a niche for NVIDIA’s graphic cards, which have also run out of stock due to high demand. Experts opine that the burgeoning interest in cryptocurrencies over the past one year, and the incessant rush to buy graphic cards will have an enduring effect on the GPU market. Owing to the enormous spike in the price of major cryptocurrencies such as Bitcoin towards the end of 2017, it will take more than a year before the normal supply of high-end GPUs is restored.

The high demand for graphic cards has led to an unprecedented rise in sales volumes and profit margins of manufacturers. Total revenue from graphic card sales has soared to $6.45 billion in 2018 from $3.82 billion in 2015. The International Data Corporation estimates that GPUs purchased from cryptocurrency miners will be worth a whopping $385 million by mid this year. Intel is currently exploring the possibility of manufacturing GPUs that are specifically meant for cryptocurrency mining.