Yesterday Nvidia was holding an investment day for its shareholders as we were reading on Nvidia’s Grace CPU and the DGU datacenter. At which the top brass of the group spoke about the ongoing GPU shortfall – the bane of the lives of many PC Builders today – and how long it believes this could go on. “Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean,” says Colette Kress, CFO of Nvidia in a blog post. “We expect demand to continue to exceed supply for much of this year. We believe we will have sufficient supply to support sequential growth beyond Q1.” Kress previously sent a message about a lean channel inventory lasting in Q1, which would have left us hanging until May according to Nvidia’s corporate calendar. Well, May isn’t that far off now and a return to normalcy appears to be even less likely over the course of the coming months. However, the launch of Ampere was very good, according to Nvidia’s own figures from its slides on Investors Day. Nvidia estimates that Ampere’s first six months over Steam have more than doubled and that sales have started to increase sharply over the first 18 weeks of the generation. That does not a surprise because Nvidia sells cards as soon as possible, however, it shows how much more and more demand for GPUs became in 2021. Demand not just from players but also from crypto-currency workers and people who want to invest from selling cards for profit. In recent times Acer spoke of a reduction in part shortages in the second half of 2021 that could signal a transition to a stronger supply chain, mostly due to coronavirus restrictions in global supply. The recent RX 6000 series GPUs based on RDNA 2 are a challenge for AMD and have been reasonably quiet until now when it believes supplies are coming back. Unfortunately, on the GPU side, things remain indefinitely bad. The demand is already on the roof, and GeForce’s graphics cards’ average retail rates are about three times as price as the official Nvidia MSRP price. It is definitely not helpful for AIB models to surpass the price proposed by the MSRP. Combined with additional U.S. tariffs, costs rise and the lack of GPU is not just a result of gamers. The crypto-mining boom has inspired dozens of people and enterprises to use graphics cards to farm Ethereum and associated currencies rather than to play. We should only consider how valuations on digital devices have shifted to get a clearer understanding as to why demand is so strong. Ethereum was $158 USD just one year ago, It’s $2,126 USD today. The craze for digital currency also seems to rise with financial institutions increasingly hopeful.
