GRAPHICS PROCESSING UNITS {GPUS} : DEMAND ESSAY

 

Pay to Play : Crypto-miners are probably responsible for the Graphics Processing Units [GPU]  shortages.

The past year has been rough for gamers. Just as covid-19 brought in-person entertainment to a halt, the cost of graphic processing units [GPUS] needed to run computer games soared.

Graphic cards like Nvidia's RTX 30380, with a suggested price of $699, have fetched up to $2,400. When bricks-and-mortar stores get a few in stock, buyers queue up overnight.

Prices for all types of chips have risen of late, for myriad reasons. Silicon wafers are scarce. Manufacturers have suffered disruptions. Scalpers use bots to buy up inventory. Chinese-made chips face American tariffs. And demand for personal computers is the highest since 2010.

Nonetheless, data from Keepa, a website that tracks Amazon listings, show that asking prices for GPUS have risen faster than those for central processing units [CPUS]. The data also suggest that miners of Ethereum, the second-largest cryptocurrency, are to blame for gamers' woes.

GPUS and CPUS both perform calculations, but they are used for different purposes. GPUS are specialised chips that excel at matrix algebra, which is required for 3D graphics and machine-learning tasks like translating languages.

They are also the best tool for mining Ethereum [ though not bitcoin]. In contrast, CPUS are more versatile, and handle most day operations.

In general, chips lose value over time as new, more powerful ones are developed. Technological gains have slowed since the 1990s, but GPUS still obey this trend. For example, a nine-year-old CPU like Intel's Core i7-3770 sells for a third of its release price.

However, prices for GPUS have risen so much that even geriatric graphic cards, such as AMD'S RX580, have gained value. It was released in 2017, at a suggested price of $229, and is now listed for more than $700.

In theory, such appreciation could reflect the growing popularity of gaming and machine learning.  However, secondhand market data suggests a different cause.

Since 2005 asking prices for six GPUS tracked by Keepa have moved in lockstep with Ethereum's value. In late 2017 2017 the currency's first big rally coincided with a surge in listed GPU prices. Once the crypto bubble burst, GPU costs fell back to earth.

Another boom began last year. As Ethereum price rose from $107 in March 2020 to $ 4,400 last month, the value of mining hardware once again followed suit. In six months, the six GPUS' listed prices climbed by 150%. Those of CPUS barely budged.

The GPU shortage has hurt data scientists and computer-aided-design users as well as gamers. Some relief may be on the way. Ethereum's price is now 40% below its record high. GPU prices have yet to fall, but if history is any guide, they probably will soon.

Moreover, Nvidia has tried to cripple its GPUS' mining power, while promising to sell new cards targeted at miners. It is also cutting back on its output of older products to focus on newer ones.

However, without greater production, customising chips will not end the shortage. Nvidia's RTX 30380 Ti, one of the first cards with reduced mining power, is listed on Amazon at double its suggested price.

Meanwhile, Ethereum's overseer's said in May that they will rejig its blockchain to require less computation, and thus less electricity.

If implemented, this might lower GPU prices. However, as long as other cryptocurrencies, such as Monero, rely on power-hungry protocols that reward good GPUS, miners will pivot to different coins    - and gamers will once again cry foul.

The World Students Society thanks authors : The Economist.