Latest Trendforce report on falling crypto and decreasing DRAM prices

As we know that for months the prices of graphics cards have been increasing tremendously and they are skyrocketing. However, in recent times their prices have been coming down. The major reason for the price drop of graphics cards is the plummeting Graphics DRAM prices.

Trendforce recently released a report in which it stated that the recent fall in the value of the cryptocurrency has hit the overall DRAM market. This resulted in the price drop of the graphics DRAM segment which includes GDDR6 and GDDR5 products.

The analysis report at Trendforce has explained several factors which are involved in the decline of cryptocurrency and also led to the decrease of prices in DRAMs and graphics cards from NVIDIA and AMD.

The fall of crypto also resulted in the decrease of demand in the GPUs and now gamers can finally get their hands on these GPUs. However, even if the NVIDIA and AMD graphics card prices are returning to normal they are still almost twice or thrice their originally MSRP.

AMD Radeon RX 6700 XT review: The new 1440p champion from the Red team

Decreasing prices of DRAM is also great news for consoles of Sony and Microsoft because graphics DRAM such as GDDR6 is the most vital components for these solutions.

Here’s the complete report presented by Trendforce:

A sudden drop in ETH prices led to plummeting GDDR5 and GDDR6 spot prices

Recent observations on the spot trading of graphics DRAM products indicate that the changes in this market closely correlate to the changes in the value of ether (ETH) because graphics cards are the crucial tool for processing the mining algorithm of this cryptocurrency.

ETH prices fell by more than 50% within two months as a result of the latest measures enacted by regulatory agencies around the world to suppress the speculation of cryptocurrencies. Accordingly, cryptocurrency miners’ and investors’ interest in ETH has also diminished significantly.

The plunging demand from cryptocurrency miners also means that a substantial number of graphics cards are being pushed into the second-hand market. TrendForce’s investigation shows that spot prices of graphics cards have fallen by about 20-60% over the past month or more. The differences in the magnitude of decline depend on brand and technology generation. Furthermore, the across-the-board decline in spot prices of graphics cards has also severely constrained the spot demand for graphics DRAM.

According to TrendForce’s understanding, even though spot prices are still higher than contract prices for GDDR6 chips, the difference is rapidly shrinking. This, in turn, will hurt the general price trend of GDDR6 chips in the future. The trading is even more subdued for GDDR5 chips that are used in the earlier generations of graphics cards from NVIDIA and AMD. Spot prices are now actually about 20% lower than contract prices for GDDR5 chips. The difference here indicates that there is a glut of older graphics cards, and the GDDR5 chips that are embedded in them are no longer in high demand.

Contract prices of graphics DRAM are expected to increase by nearly 15% for 3Q21 as graphics DRAM suppliers’ fulfillment rate remains relatively low

Regarding the contract market for graphics DRAM, the sell-side has considerable leverage in price negotiations as these suppliers prioritize the production of server DRAM ahead of other product categories. In the current ecosystem of discrete graphics cards, graphics DRAM buyers such as Nvidia are still opting for a business model based on bundle sales (that is, graphics card manufacturers that purchase Nvidia GPUs must also purchase graphics DRAM from Nvidia).

Given that Nvidia and AMD have cornered the vast majority of graphics DRAM supply, notebook OEMs and small- and medium-sized manufacturers of computer components (such as motherboards) will find it difficult to procure sufficient graphics DRAM, while DRAM suppliers’ fulfillment rate for graphics DRAM chips remains relatively low. These aforementioned factors are responsible for not only the nearly 15% QoQ hike in the overall contract prices of graphics DRAM for 3Q21 (which is slightly higher than the corresponding price hikes in mainstream PC and server DRAM products for 3Q21) but also why spot prices of GDDR6 chips are about 10-15% higher than contract prices.

On the whole, prices in the graphics DRAM spot market, which is an extremely responsive market, have already begun to reflect the weakening demand from the end-product segment, particularly for graphics cards (NVIDIA/AMD) used in cryptocurrency mining. As the supply of second-hand graphics cards increases, some graphics card manufacturers may thus kick off promotional price cuts to boost sales. In addition, buyers in the spot market may also begin anticipating even lower prices, and this anticipation will likely either lead to a massive decline in their graphics card demand or result in these buyers adopting a speculative attitude regarding graphics DRAM. TrendForce, therefore, believes that the gap between spot prices and contract prices of GDDR6 chips will begin to narrow in 3Q21.

source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More like this

AMD Ryzen Z2 AI Extreme

AMD Ryzen Z2 AI Extreme: A Game-Changing AI SoC...

AMD Ryzen Z2 AI Extreme: The battle for handheld gaming dominance is heating up — and AMD...
AMD Dominates AI Benchmarks: Instinct GPUs Shatter Records in MLPerf Tests

AMD Dominates AI Benchmarks: Instinct GPUs Shatter Records in...

The AI acceleration race has shifted into high gear, and AMD has just made a spectacular power...

GeForce NOW Adds 13 Games in April, Including South...

NVIDIA has announced the latest GeForce NOW game additions for this week and the remainder of April....
NVIDIA DLSS 4: Revolutionizing Gaming Performance with Multi Frame Generation

NVIDIA DLSS 4: Revolutionizing Gaming Performance with Multi Frame...

NVIDIA DLSS 4: In the ever-evolving world of PC gaming, few technological advancements have made as significant...
AMD’s ZT Systems Acquisition: Strategic Move to Dominate the $500B AI Data Center Market

AMD’s ZT Systems Acquisition: Strategic Move to Dominate the...

In the high-stakes chess game that is the AI hardware industry, AMD just made a bold queen’s...

LATEST NEWS

Free Fire India Launch Date: Your Complete Guide to the FF 2025 Return

In the dynamic world of mobile gaming, few titles have captured the imagination of Indian gamers quite like Free Fire. Since its ban in...

Siemens Shares Skyrocket 20% Following Energy Business Spin-Off

In a dramatic market move that has investors buzzing, shares of Siemens Ltd soared an impressive 20% on Monday, April 7, as the engineering...

Google Pixel 10 Series Camera Leak Reveals Upgrades and Stagnation

A recent leak has revealed key camera specifications for the Pixel 10, Pixel 10 Pro, Pixel 10 Pro Fold, and Pixel 10 Pro XL....

Tata Motors Stock Crashes 13% as Trump Tariffs Force JLR to Halt US Shipments

In a dramatic turn of events that has sent shockwaves through the Indian automotive sector, Tata Motors shares plummeted to a 52-week low on...

Featured