GPU prices have been volatile in recent years, with extreme highs and lows. Looking ahead to 2024, many wonder if $1000 GPUs will return. Here’s an in-depth look at the factors that will influence GPU pricing over the next couple of years:
The Demand Side
The demand for high-end GPUs is influenced by several key factors:
Gaming Market Growth
- The gaming industry continues to grow steadily, with more people gaming in higher resolutions and frame rates. This results in strong demand for powerful GPUs capable of 1440p and 4K gaming.
- Major game releases also drive short-term spikes in demand as gamers upgrade to play the latest titles. The next few years will see launches like The Elder Scrolls VI, GTA VI and new Call of Duty games.
- Esports is still growing too, further increasing interest in high frame rate 1080p gaming. Competitive gamers aim for 240+ fps.
Cryptocurrency Mining
- Cryptocurrency mining remains a wild card. When profitable, mining causes enormous demand for the best mining GPUs. This leads to shortages and price hikes.
- Ethereum’s move to proof-of-stake in 2022 slowed mining demand. But other coins are still mineable, so mining won’t disappear entirely.
- If mining profitability increases in 2024, mining demand could drive up high-end GPU prices again.
The Metaverse
- The metaverse vision will gradually become real in coming years, with more users obtaining VR/AR headsets.
- Smooth VR and AR experiences require powerful GPUs. If the metaverse takes off, the hardware requirements could significantly impact GPU demand.
Professional Graphics Use
- NVIDIA and AMD market powerful GPUs for non-gaming usage in workstations. Applications like video editing, 3D modeling and CAD/CAM rely on GPU acceleration.
- As these applications become more advanced, so will the hardware requirements. This contributes to demand for high-end GPUs.
The Supply Side
Meanwhile, GPU supplies are constrained by various factors:
Chip Shortages
- Chip shortages are expected to persist through 2023 and potentially 2024, limiting supply and keeping GPU inventories low.
- Both NVIDIA and AMD rely on TSMC for manufacturing. TSMC is running at max capacity already.
- Establishing new fabs takes years, so supply issues won’t be resolved overnight.
Competition from Cryptocurrency-Specific Chips
- ASICs for crypto mining are increasingly competing with GPUs for production capacity.
- Bitmain, MicroBT and other crypto chip designers are ordering wafers from TSMC too.
- These companies are willing to pay top dollar, reducing wafer supply for GPU production.
Competition from Apple and Other Customers
- Major tech companies like Apple, Intel, Qualcomm and others compete for wafer capacity as well.
- Console makers like Sony and Microsoft also rely on the same foundries.
- These deep-pocketed companies secure supply ahead of time, further constraining GPU makers.
How These Factors Influence 2024 Pricing
Given the strong demand drivers but constrained supply realities, here are two potential 2024 scenarios:
Scenario 1: $1000+ GPUs Return
- Demand spikes from a new crypto mining boom, VR/metaverse growth, and major game releases.
- Meanwhile, chip shortages and supply competition remain stiff.
- This imbalance leads to shortages of top-tier GPUs, sending prices above $1000 again.
Scenario 2: Prices Remain Below $1000
- Demand rises moderately from gaming and professional segments, but mining demand remains low.
- Chip supplies improve slightly thanks to new fabs coming online.
- With better balance between supply and demand, high-end GPU prices remain under $1000.
The Bottom Line
While nothing is certain, the key factors point to a competitive market for higher-end GPUs through 2024. Prices above $1000 certainly seem possible if demand growth substantially outpaces supply improvements. But even in a bullish market, $1000+ GPUs are unlikely to be the norm. The most probable outcome is elevated pricing, but remaining below the peaks of the 2018 and 2021 mining booms. Gamers eagerly await some relief, but continued shortages and higher prices seem inevitable in the near future. We can only wait and see where the market goes as 2024 approaches.
