Drop In Graphic Chip Price May Lead To End Of Shortage
A sharp drop in graphic chip prices could presage an unexpectedly quick ending to a global chip crunch that has crippled manufacturing from smartphones to cars, and the issue will be a central one for companies reporting results this week, Jane Lanhee Lee, Chavi Mehta and Noel Randewich reported for Reuters.
Photo Insert: The trigger is a drop in prices of GPUs, or graphics processing units, which are the brains of gaming machines and are spreading to other uses.
As Intel, Qualcomm and others report, investors will weigh how dampened consumer spending from inflation, China’s COVID lockdown and Russia's invasion of Ukraine balance out supply chain blockages for microchips.
The trigger is a drop in prices of GPUs, or graphics processing units, which are the brains of gaming machines and are spreading to other uses.
Analysts at Baird recently downgraded GPU maker Nvidia to “neutral” after prices dropped. So far this year, Nvidia stock is down roughly 31% and rival Advanced Micro Devices has fallen about 37% compared with a roughly 22% drop on the Philadelphia SE Semiconductor Index.
Both companies declined to comment. GPU prices are still being sold at a premium, but a smaller one. Susquehanna analyst Christopher Rolland earlier this month said that the markup over manufacturer suggested retail price or MSRP has fallen to 41% from 77%.
Graphics chips and hardware news site 3DCenter, which tracks graphic chip prices in Europe, reported that the price of AMD’s Radeon RX6000 and Nvidia's GeForce RTX30, both used for gaming, dropped steadily to less than 20% above MSRP from 80% at the start of the year.
Still, recent Reuters checks found that Nvidia’s GeForce graphics cards remained largely out of stock at retailers like BestBuy and Newegg Commerce.