Expected GDDR6 memory price hike could make GPUs more expensive

The graphics card market is currently in shambles, availability is poor, and prices are skyrocketing. But an expected price spike in GDDR6 memory could drive those prices even higher.

The depressing news comes from TrendForce, which notes that graphics DRAM prices are expected to rise between 8% and 13% for the full year. This will almost certainly drive up the prices of graphics cards, which are already selling well above their MSRP (that’s the manufacturer’s suggested retail price).

Why is this? According to TrendForce, there are several main factors behind the price increases. The first and most obvious is that the unprecedented demand for graphics cards, a result of the global chip shortage, cryptocurrencies, and resellers, seems to be getting worse rather than better.

Another factor is NVIDIA. Team Green is one of the largest enterprise customers for GDDR6 and GDDR6X memory because DRAM is bundled with some of its GPUs, which means manufacturers are favoring NVIDIA over smaller customers in allocating production capacity. In addition, console manufacturers Sony and Microsoft are also prioritized for 16Gb GDDR6 memory, as is the production of server DRAM products.

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TrendForce adds that fulfillment rates for some medium and small customers have been around 30%, which explains why spot prices for graphics DRAM products have occasionally been as much as 200% higher than contract prices. It is noted that the drop in value of some cryptocurrencies caused spot prices of GDDR6 products to drop, but they are still almost 100% above average contract prices.

One thing that hasn’t been affected as much is GDDR5, which has seen almost no difference between spot and contract prices because it’s mainly used in older graphics cards like the GTX 1650/1660.

AMD has said it expects to increase its GPU offerings in Q3, and NVIDIA will likely try to do the same. With cryptocurrency prices on a downward trend, thanks in part to Elon Musk, we may hold out hope that the situation may improve somewhat later this year. But with a warning from manufacturers, normalcy may not return until 2023.