MSI Plans To Increase The Price Of Graphics Cards In Response To Increasing Demand With Low Shipments From NVIDIA & AMD
The graphics card shortage facing the consumer market has created artificial price gouging seen with the launch of the NVIDIA GeForce RTX 3060 & the AMD Radeon RX 6700 XT. This is all due to the extremely low stock. Some custom partner cards can be seen retailing at double the MSRP price and now MSI plans to see a price increase on graphics cards as well.
Decreasing Shipments From NVIDIA & AMD Are Causing Partners Such As MSI & ASUS To Raise The Prices Of GPUs
In the latest investor meeting, reported by DigiTimes, the MSI chairman, Joseph Hsu, reported MSI's earning as well as expectations for the coming year. MSI expects the demand for motherboards, graphics cards, and gaming notebooks to continue to increase by double digits. In 2020, MSI saw the sales increase by 30 to 50% compared to 2019. However, profits in the 4th quarter of 2020 were weaker than expected, but profits for the year were the highest they have ever been. The shortages of graphics cards have caused price hikes since 53% of MSI's revenue is from GPU sales.
The expected double-digit growth of motherboards, graphics cards, and gaming notebooks shipments seem to indicate a rise a global demand, but the supply from AMD and Nvidia has not caught up. The rise in demand, as well as the sparse supply, has caused graphics card prices to continue to rise. There is some hope that the price hikes won't be too extreme since expenses from transportation are expected to start falling after March. MSI also plans to release the newest cards from Nvidia and motherboards for the 11th gen Rocket Lake processors from Intel in Q2 of 2021.
The root cause of the shortage is that AMD and NVIDIA shipments have dropped, so the supply is limited and in order to reach their financial goals, a price increase is necessary and we have seen most follow suit in the price hike. Very few partner cards can be found anywhere near the MSRP and all are out of stock most of the time. At the same time, it's not only consumers competing for the cards. Both miners and scalpers want these cards to either mine Ethereum or to sell them on the resale market at an inflated price point.
For consumers, the next GPU release seems to be the NVIDIA GeForce RTX 3080 Ti which has been pushed back to May. As for those who want currently want or need a card, you will either need to be lucky with a restock, buy a card on the resale market, or opt for an older card.
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