The graphics card market is down. In the third quarter of the year, sales of desktop GPUs took a complete dive. Shaken by the health crisis and the rise in the price of cryptocurrencies, the sector is still struggling to rebalance itself.
During the third quarter of last year, 6.9 million desktop graphics cards have been sold worldwide, reveals the annual report of Jon Peddie Research. A year earlier, 12.72 million GPUs for desktop PCs had been sold on the global market.
As noted by our colleagues from Tom’s Hardware, the market had not recorded such low sales since the third quarter of 2005. This is when the oldest data from Jon Peddie Research dates back. Same story on the rest of the market, turned upside down by the coronavirus pandemic and successive confinements.
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GPU sales down 42% in one year
At the same time, manufacturers shipped just over 7 million laptop cards. During the quarter, a total of 14 million GPUs has been sold worldwide. In the space of a year, GPU sales have therefore contracted by 42%, analysts point out. The industry has abruptly changed course, after the excesses of previous years. This is the largest drop since the 2009 recession, notes Jon Peddie.
” The market has seen dramatic changes on the shipping side”says Jon Peddie in his annual report.
For the record, demand for graphics cards has exploded during the Covid-19 pandemic. Confined to their homes, many people have invested in new computers, whether for playing video games or working from home. In the first quarter of 2021, the PC market recorded annual growth of 53.1%, according to the Canalys firm.
The expansion of the cryptocurrency market has also played a role. During the health crisis, cryptocurrency miners multiplied. Many Internet users have started to mine ether, the cryptocurrency of the Ethereum blockchain, to earn money. Between 2020 and the end of 2021, the value of the cryptocurrency has indeed quadrupled to go above 4,500 dollars. To undermine these digital assets, miners have invested in powerful infrastructure powered by graphics cards. Between January 2021 and June 2022, miners spent $15 billion on powerful GPUs, hogging the bulk of inventory.
The boundless appetite of miners has caused demand to explode. At the same time, the production lines of AMD and Nvidia, weakened by the health crisis, encountered serious slowdowns. The builders don’t have couldn’t produce enough cards to please everyone. De facto, the price of GPUs has soared, much to the chagrin of gamers. Taking advantage of the explosion in demand and a rickety supply, speculators have become accustomed to reselling available stocks to generate profits. Speculation worsened the situation, and prices soared. At the beginning of 2021, there was still an RTX 3080 at more than 2000 euros.
The causes of the drop in sales
The tide turned in 2022. When the Ethereum blockchain rolled out a major update to its consensus algorithm, The Merge. This change marked the end of Ether mining. In anticipation of the update, many miners new to the industry sold their hardware, flooding the second-hand market with used cards. This sudden influx of GPUs caused prices to drop sharply.
The slump in PC sales has also helped pull down demand, and prices, for GPUs. Users massively equipped themselves during the health crisis, due to the generalization of telework or distance school. Once this boom is over, the market is logically on the downside. Finally, the economic recession, tinged with monetary inflation and rising raw material prices, has also deterred consumers from investing in new components.
Jon Peddie Research
