The current graphics card shortage has made it tough to be a PC gamer. However, Nvidia thinks there is a light at the end of the shortage tunnel. The company expects supplies to improve by the middle of 2022.
Nvidia Chief Financial Officer Colette Kress explained at the UBS Global TMT conference that the company has been successful in increasing GPU supplies during the shortage, according to PCMag. Specifically, Nvidia spent billions to shore up long-term agreements with various manufacturers. This due diligence should lead to more supplies to make graphics cards, thus decreasing the overall shortage.
Nvidia wants to wait until there is a “reasonable amount of supply” to lower prices.
“The company as a whole will take the appropriate work to continue to procure more supply,” Kress said. “We’ve been able to grow quite well during this year, each quarter, sequentially growing. And we do continue to plan to do that for Q4.”
Kress didn’t say exactly which manufacturers Nvidia made deals with, but Samsung is a likely one due to Nvidia’s Ampere architecture being built on its 8mn process nodes. Cress did point out that long-term deals take a while to have an impact. While the company would love to lower the prices, she said Nvidia wants to wait until there is a “reasonable amount of supply” to do that.
Time will tell if Nvidia is able to truly alleviate supply issues next year. Even Nvidia’s own CEO, Jensen Huang, believes that shortages will continue through next year. That said, Huang has extolled his company’s ability to source supplies from multiple vendors, combined with its ability to scale.
Outside of savvy partnerships with fabs, Nvidia is also trying to push the U.S. government for policy actions. Nvidia, along with other tech companies, are asking the Biden administration to exclude graphics cards from the former Trump administration’s tariffs on imports from China. The tariffs on semiconductors and printed circuit boards (PCBs) have at least partially contributed to the sky-high prices of graphics cards.
One of the ongoing problems with the shortage is with scalpers and cryptominers. About 25% of all GPUs sold during the first half of 2021 went to miners. Even if Nvidia manages to increase its supply, that doesn’t guarantee that scalpers and miners won’t scoop up the extra supply. Nvidia’s next-gen “Lovelace” graphics cards look to possess insane power, but it won’t matter if they’re just as scarce as the current-gen Ampere cards.
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