Nvidia believes hard-to-find graphics card supplies will improve by the second half of 2022, yet another glimmer of hope in a year filled with false starts on the graphics card front.
The prediction comes courtesy of Nvidia’s chief financial officer, Colette Kress, who spoke at the UBS Global TMT virtual conference on December 6.
During the 45-minute event, Kress addressed Nvidia’s efforts to overtake semiconductor shortages and boost the supply of its most in-demand graphics cards, such as the RTX 3070 and RTX 3080, which followed them a year later. No one will be able to find it for long. release.
“It’s too early to speculate in terms of demand trends as we move into next year,” Kress said, “but while we believe demand is strong, we still believe channel inventory is very low.” We believe we still have a great opportunity to upgrade the gamers in front of us to that Ampere architecture.”
“The company as a whole will do the appropriate thing to continue to purchase more supply,” Kress said, “because right now we have situations where demand exceeds our overall supply.”
However, Kress was optimistic about Nvidia’s prospects for 2022.
“We are confident that when we look at the second half of next year, we will be in a better position in terms of supply.”
It’s been a very long year for gamers, to say the least
Nvidia has been trying for over a year to get more of its graphics cards into the hands of gamers, and there’s some evidence that its efforts are real.
Soon after the first Ampere cards were launched in September and October 2020, they sold out at every retailer within minutes. Initially, the shortage was blamed on higher-than-expected demand, but as time went on, other problems quickly appeared.
Shortly after the new RTX 3080 graphics cards were sold out before legitimate customers could buy them, Nvidia announced that it would be reviewing purchases on its site to route all available stock buying bots. We also thought this would be a temporary problem, but it is not.
Graphics cards, as well as video game consoles like the PS5, are essentially inaccessible by normal means as automated bot networks have been stocking up on stocks throughout the year and there are no signs of stopping.
Furthermore, the surge in the price of Ethereum in 2021 caused even more demand for the card from cryptominers.
Nvidia made two major efforts to prevent the graphics card diversion from gamers to cryptminers: Light Hash Rate (LHR) GPUs, which halved the hash rate used for Ethereum mining to hopefully halve the hash rate. done; and the cryptomining processor (CMP), which Nvidia hoped would be more attractive to cryptominers than consumer RTX cards.
None of these efforts made a significant difference to gamers’ ability to purchase a new graphics card. Even the drop in cryptocurrency prices did not slow things down, and with the rise in cryptocurrency prices again, we could be in for more of the same.
Throughout 2021, gamers in particular have been on the lookout for signs that the end of the scarcity was at least on the horizon, and many expected whenever the price of the cryptocurrency crashed or a new contract was announced. Was that it would dent the problem. ,
That’s not the case though, and Nvidia’s latest graphics cards are effectively as hard to find as they were on the day they went on sale, so oftentimes disappointed gamers have little to do with Nvidia’s optimism for the second half of next year. Can be forgiven for looking a bit. Skepticism and even a touch of bitterness.
However, Kress believes that the introduction of the Nvidia LHR card, CMP, and the government’s renewed interest in regulating cryptocurrencies will reduce demand for Nvidia cards.
Nvidia hopes new supply contracts will make a difference
“A large part of the strategy for improving supply is locking in more supply capacity by entering into longer-term contracts,” Kress said.
“We also need to think about our add-in card partners, our OEMs, who are also integral in getting our cards into the hands of gamers.”
“That serves us not only in procuring inventory over the next two quarters, but as you’ve also seen us buy longer term — the longer term could be more than a year — and you’ve seen us enter into agreements now In terms of long-term capacity requirements, it will take us several years.”
While Kress certainly sounds optimistic, as PC Mag notes, none of this translates to more cards coming into gamers’ hands.
Notably, achieving long-term capacity does not mean that all demands can be met by this time next year. This means scalpers can still buy those cards as well and resell them at much higher prices, although the prices that gamers can pay may be lower than they are now.
And there is no upper limit to how many graphics cards crypto miners want to buy. If a graphics card is profitable, they will buy it. If anything, the best hope any of us have of getting a new graphics card before the latest card becomes Ethereum 2.0 is finally implemented.
This will move the cryptocurrency from its current proof-of-work model to a proof-of-stake model, which requires the GPU to perform intensive mathematical operations to mine the currency. Without proof of work, you don’t need a graphics card.
Ethereum 2.0 is expected to launch sometime next year, so Kress would not be wrong to say that the supply situation should improve by the second half of 2022. Between more capacity on the part of Nvidia and declining demand from Ethereum 2.0, it may be easier for gamers to get a graphics card next year.
However, if you were skeptical, we wouldn’t blame you. We’ve heard it before, and you can only dash your hopes so many times.
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