The shortage of graphics cards is coming to an end and we explain why

The boom in cryptocurrency mining activities and the pandemic have caused widespread 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 would currently be on a better slope. Indeed, according to the newspaper, major manufacturers such as ASRock, Asus, Gigabyte and MSI have succeeded in significantly increasing their activity.

A recovery for 2022 Indeed, the industry has notified slight increases in production end 2021.

This trend is expected to continue throughout 2022 and lead, over the whole year, to an increase of 10 % of shipments compared to 2021. According to DigiTimes, the shortages could end around the middle of the year.

A decrease in demand While production is expected to increase, demand is expected to decline slightly.

Outside the laptop industry, the graphics card industry is buoyant by the demand for cryptocurrencies and video games. Thus, this possible slowdown in consumer demand could find an explanation in 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 require solving calculations before creating a new block. A rather positive point, since it means that this new mechanism will require much lower energy consumption than PoW. Since there will no longer be a need to solve complex calculations, there will also be no need to produce graphics cards in large quantities. Clearly, this change represents a key part of the community’s strategy to scale Ethereum via Eth2 upgrades.

Once this shift is made, it would be logical to expect a drop in demand for graphics processing units (GPUs) from miners. Combined with increased shipments, graphics card prices are expected to fall and inventory to rise.