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«Damn graphics cards, I’ve just about had it.»
by Kevin Hofer
When will it end? Graphics cards and other components could become even more expensive
27/8/2021
Translation: Patrik Stainbrook
Great, now this: TSMC, the world’s largest contract semiconductor manufacturer, is reportedly raising its prices. Likely in order to make many electronic products more expensive. But this is just the latest blow in an all-consuming semiconductor crisis that has been going on for more than a year now.
This will have a big impact on anything that has a chip installed. TSMC manufactures products for Apple and AMD, among others. It’s completely obvious that these producers will pass the price increase on to customers. I would.
Demand for semiconductors has far exceeded supply for more than a year. How could this happen?
First, one thing of note: Silicon wafers – plates on which the chips are manufactured – cannot be stockpiled. They have an expiration date. Therefore, they must be cast to order. Like a good risotto. It’s ready when it’s ready. As the Italians say: risotto doesn’t wait for guests, guests wait for risotto.
That’s exactly the problem. All over the world, manufacturers and suppliers are waiting for their risotto. Sorry, their silicon wafers. This is due to semiconductor manufacturers having to increase their orders from silicon foundries due to the rising demand for semiconductors. These foundries manufacture silicon wafers.
Regrettably, they’ve been unable to cope with the enormous demand for months. This already started before the Corona pandemic, when China closed foundries due to new environmental regulations. Affected plants hadn’t complied with new regulations.
In addition to these bottlenecks, there have also been supply issues since the beginning of 2020. These were triggered, among other things, by Covid and by geopolitical tensions between the USA and China. In short: trade restrictions and delays in deliveries made production more expensive and delayed it.
At the same time, Corona shook up the chip market. Due to the restrictions and lockdowns, demand for notebooks, PCs and the like increased more than expected. This trend is still continuing, as shown by the WSTS growth forecast.
The perfect storm of many, small causes.
The perfect storm continued to brew.
Thus, the situation has only worsened. Car manufacturers such as VW still have to implement short-time work schedules today, even though orders are coming in. There’s simply a lack of chips to build more cars.
However, the semiconductor crisis doesn’t only affect large chips in cars or graphics cards. Meanwhile, smaller controllers on SSDs are also affected. These are manufactured in larger structure widths, exactly the area where TSMC is now increasing prices by up to 20 per cent.
Gaming graphics cards are a special case. They were affected by the semiconductor crisis earlier than other chips. In this case, cryptominers fuelled the shortage. These GPUs were an early indicator of what else was to come.
The perfect storm has made landfall.
Graphics cards, for example, are now more readily available depending on the model, and you’ll find one in stock in our store from time to time. But that’s only due to astronomical prices: in most cases, they’ll run you over twice the recommended retail price (RRP).
With TSCM’s price increase, the situation will likely only worsen. How many people will then still go for these products is questionable. Who knows, maybe graphics cards and the like will become cheaper again due to decreasing demand fuelled by high prices. But even if demand declines again, it’ll be a while before this is reflected in the price.
Kevin Hofer
Senior Editor
kevin.hofer@digitecgalaxus.chFrom big data to big brother, Cyborgs to Sci-Fi. All aspects of technology and society fascinate me.
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