On the eve of the launch of NVIDIA’s “most powerful AI chip on earth,” the latest Blackwell architecture product, it has been reported that the supply of high-end graphics processors (GPUs) for gaming and other applications has been significantly reduced, by up to 50%, which has been recently expanded. The reduction in supply may lead to serious shortages in the availability of graphics cards, causing prices to rise.
Legal experts have pointed out that if the prices of Huida graphics cards increase, manufacturers such as ASUS (2357), Gigabyte (2376), MSI (2377), and ASRock (3515) are expected to capitalize on the opportunity for price hikes. These board manufacturers are also key partners of Huida’s AI servers. As the demand for AI servers continues to grow, board prices are rising simultaneously, and relevant Taiwanese manufacturers are even more optimistic, enhancing their strong market position.
Mainland media and channels have revealed that the high-end GPUs that Huida has restricted supply of are mainly from the RTX 40 series, particularly mid-to-high-end graphics cards like the RTX 4070 and above, which may face serious shortages.
An analysis of the situation indicates that this may be related to the tight supply of Huida’s AI chips, as well as the crowding out effect caused by reallocating production capacity initially planned by TSMC for high-end GPUs towards AI chip production. Huida has also started to tighten the supply of RTX 40 series cards in anticipation of the launch of the next-generation RTX 50 series graphics cards to prevent an increase in inventory of previous generation products.
The industry has noted that the RTX 4060 and 4060 Ti series of graphics cards began to experience supply shortages in the first quarter. In early April, it was reported that prices for entry-level graphics cards, including the RTX 4060, 3050, and GTX 1650, had started to rise; currently, these price increases are continuing. This trend is spreading to mid-to-high-end graphics cards like the RTX 4070, 4080, and 4090, potentially tightening the supply of RTX 4070 and above cards in August compared to July.
According to market rumors, Huida increased GPU supply in May to accommodate the promotions during the 618 E-commerce Shopping Festival. However, in July, Huida made a reversal and notified partners that GPU supply would be significantly decreased, with reductions rumored to be between 30% and 50%.
Analysts remain optimistic that as the prices of Huida graphics cards increase, board manufacturers such as ASUS, MSI, and Gigabyte will benefit. Additionally, if Huida launches the RTX 50 series by the end of the year as anticipated, alongside the major biennial refresh, this will likely boost shipments for board manufacturers this year and increase the average selling price (ASP) of graphics card products.
Board and card manufacturers view this year’s performance positively. Notably, MSI is seeing a peak season this quarter, which should help boost board business shipments. Furthermore, new products such as esports and AI notebooks are being introduced, including collaborations with luxury brands like Mercedes-Benz AMG, which is expected to enhance shipments. MSI is confident that operations in the second half of the year will surpass those in the first half.
GIGABYTE is experiencing growth from large orders for AI servers and a recovery in board and card businesses. Chairman Ye Peicheng recently predicted that net earnings per share will rise significantly this year, and that the second half will not be worse than the first half.
Further reading
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NVIDIA’s GPU Supply Crisis and Its Impact on the Market
As the tech world gears up for NVIDIA’s launch of its latest Blackwell architecture chip, dubbed “the most powerful AI chip on earth,” a significant supply chain issue has emerged. Reports indicate that the supply of high-end graphics processors (GPUs) has decreased dramatically—by as much as 50%, creating potential shortages in the market.
The Reason Behind Supply Reduction
- Transition of Production: The transition of production capabilities from high-end GPUs to AI chips has left the RTX 40 series, particularly graphics cards from the RTX 4070 and above, facing severe supply shortages.
- Market Demand: The hype surrounding new AI applications has prompted manufacturers to prioritize AI chips, leading to an imbalance in GPU availability.
- Preparations for New Launches: NVIDIA’s impending release of the RTX 50 series has led to a tightening of RTX 40 series supplies to prevent excess inventory levels of the older models.
Effects on Retail Pricing
The anticipated decrease in supply has already begun to affect pricing. Graphics cards from various manufacturers, including ASUS, Gigabyte, MSI, and ASRock, are seeing price hikes as demand continues to rise.
Legal experts predict that if these price increases persist, the impact on board card manufacturers could be substantial. Strong partnerships between NVIDIA and these manufacturers for AI server production will only compound the effects seen in the broader GPU market.
Shortages in Specific GPU Models
Recent analyses show that the most affected models will likely be from the RTX 40 series, particularly:
| GPU Model | Anticipated Availability |
|---|---|
| RTX 4070 | Severe Shortage |
| RTX 4080 | Critical Levels |
| RTX 4090 | High Demand |
Broader Industry Implications
The issues surrounding NVIDIA supply hints at a larger trend in the tech market, where AI applications are rapidly becoming the focal point of demand. As companies innovate and develop AI-centric products, the anticipation for NVIDIA’s next generation of cards only escalates.
Opportunities for Board Manufacturers
With NVIDIA’s graphics card prices rising, manufacturers stand to gain significantly. The board partners such as:
- ASUS (2357)
- Gigabyte (2376)
- MSI (2377)
- ASRock (3515)
are expected to see a boost in their product offerings and sales as they tap into the higher price margins. The ongoing push for AI-based hardware is also providing additional avenues for revenue growth.
What’s Next for NVIDIA?
As we look toward NVIDIA’s expected release of the RTX 50 series by the close of the year, speculation surrounding its specifications and performance continues to build. The biennial refresh typically brings enhancements that excite both gamers and professional users alike.
Market Trends Moving Forward
The current transformations and anticipated launches in the GPU realm will likely dictate market trends in the latter half of the year. Notably:
- NVIDIA’s strategies to manage inventory could affect the balance between supply and demand.
- Certain manufacturers are positively projecting their performance due to strong demand from AI sectors.
- The introduction of new technologies and models may continue to spur buying behaviors, especially as e-sports and AI applications gain traction.
Practical Tips for Gamers and PC Builders
- Be Prepared for Price Fluctuations: With GPU prices expected to rise, budgeting ahead is essential.
- Do Your Research: Monitor online forums and marketplaces for availability updates and pricing changes.
- Consider Alternatives: Look for other hardware options that might not be as impacted by the GPU supply chain issues.
Conclusion
As NVIDIA navigates these turbulent waters surrounding GPU supplies, both consumers and manufacturers must adapt to the ever-evolving landscape of gaming and AI-driven technology. The industry is poised for exciting changes, and how stakeholders respond could shape the future of graphics processing units, as well as their applications.
Further Reading
Graphics Card Factory’s Diversified Layout Opens Up New Blue Ocean
Jen-Hsun Huang, Zuckerberg to Discuss New Applications for Graphics Chips
