In a new report, Jon Peddie Research sheds some insight on the impact that cryptocurrency mining has had on AIB (add-in board) sales for the start of this year. Needless to say, AMD, Nvidia and their AIB partners have profited hugely from the high demand on the best graphics cards.
The consulting firm estimated that 25% of the graphics cards shipped in the first quarter of 2021 went into the waiting grubby hands of cryptocurrency miners and speculators. That’s roughly 700,000 high-end and midrange gaming graphics cards. In monetary terms, we’re looking at a hefty sum in the range of $500 million.
Jon Peddie Research, who has tracked AIB shipments since 1985, noticed a substantial drop in the attach rate of AIBs to PCs. The firm observed the attach rate stoop as low as 25% before eventually bouncing back up to 50%. Jon Peddie Research then utilized a simple formula where the mining use of AIBs is equivalent to the difference between the trending normal attach rate and the existing attach rate.
The company used the assumption that serious cryptocurrency miners have their dedicated setups and purchase graphics cards. On the flipside, there are also casual miners who might invest in a complete system just for mining cryptocurrency. The firm admitted that its forecast model isn’t as precise as before due to the shortage of components. We’ve already witnessed scalpers and miners that employ buying bots to purchase graphics cards before flipping them on eBay.
Cryptocurrency miners aren’t the only reason for the drastic inflation in graphics card pricing. The pandemic also played a big role in this situation since it forced many factories to temporarily shut down and interrupting supply chains in the process. It’s been known that graphics card components, such as GDDR6 memory chips, voltage regulators, capacitors, and other parts, have also gone up in price since the start of the pandemic. Jon Peddie Research measured an increase of up to 70% early in the year.
AMD and Nvidia are basically untouched in our GPU benchmarks hierarchy, but the two companies are taking different stances toward cryptocurrency mining. For starters, AMD doesn’t have any problems with consumers mining on its RDNA 2 (Big Navi) graphics cards. Nvidia, on the other hand, has launched its Cryptocurrency Mining Processor (CMP) line that’s dedicated to Ethereum and cryptocurrency mining, and at the same time implemented an anti-mining limiter on most of its GeForce RTX 30-series (Ampere) graphics cards. The RTX 3060, RTX 3070 Ti, and RTX 3080 Ti all launched with a hashrate limiter in place, while the RTX 3060 Ti, RTX 3070, and RTX 3080 are being phased out and replaced by LHR (Lite Hash Rate) variants.
Despite both chipmaker’s efforts — or non-efforts in AMD’s case — graphics cards remain sold out everywhere. The little stock left retails for absurd prices, with Newegg often selling cards via its Shuffle program at 50% or more above the nominal MSRP. The second-hand market is even worse, as Ampere and Big Navi GPUs sell for 2X to 3.5X more than MSRP according to our GPU pricing index. Simply put, it’s a bad time to buy a graphics card (for gaming).