4/19/2023 0 Comments Graphics card shortageThe above is also further corroborated by Eichenbaum et al. This seems to fit the facts of this case as the big price increase followed the tariff news (but as mentioned above, observers seems to agree that tariff could not account for all the price increase), and thus firms likely reasoned that everyone will have to increase prices now, so now is the right time to increase their prices as well. It is very difficult to know exactly what is the reason for price stickiness on a firm level, but research on price stickiness further shows that:įirms usually don’t want to raise prices ahead of their competitors, hence in data we can observe a great degree of price change coordination among firms in the same industry (see Levy et al. The average price durations above are not that far from the time it took graphics card prices to start to rise. In addition, more recent studies for US show that there is also very large heterogeneity in price stickiness as about 1/5 of prices take more than a year to change (see discussion Klenow & Malin 2010). Imply average price durations close to one year in the euro area and slightly above half a year in the US. ![]() Research generally finds that in the EU and the US respectively data on the frequency of price changes ( Alvarez, et al., 2006). I believe the answer to that is sticky prices. ![]() Why did it take them so long to adjust their prices? It’s difficult to know how much of that is due to the China tariff and how much due to shortage, but most sites reporting on this quote the shortage of GPUs due to increased demand from Bitcoin miners as one of the main reasons for price rise.īut the question still can be reformulated in another way. Or more broadly Forbes reports that at the beginning of this year due to shortages and in addition also due to increased tariffs on China graphics card prices: Nvidia is reportedly gearing up to launch new RTX 40 series GPUs in late 2022, and it would be nice if they landed in a market where regular customers could obtain those next-gen cards for a reasonable price.Actually, just recently (a few days ago January 2021 - for anyone reading this later), the major retailers of these graphics cards did raise their prices (see example here for EVGA). Hopefully, these developments lead to more readily available cards that don’t cost an outrageous amount. If that went over your head, don’t worry all you need to know is that more ABF means more graphics cards (potentially). What the heck is ABF substrate? To put it simply, it’s a vital material for advanced semiconductor manufacturing that is used to create the circuitry connecting nanoscale microprocessor die materials to the larger terminals on printed substrates. The report says Asrock and TUL (Powecolor’s parent company) wish to increase GPU shipments in the second half of 2022 when supplies of ABF substrate material are expected to improve. According to Digitimes (opens in new tab) (via Tom’s Hardware (opens in new tab) and PC Gamer (opens in new tab)), a shortage of Ajinomoto Build-up (ABF) substrates has contributed to the global GPU shortage – a fact that very few know about. ![]() Another recent development could also make GPUs easier to find.
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