It sounds unbelievable, but it really happened. According to our conventional thinking, how can second-hand commodities, especially the category of electronic digital products, have such magical things as price increases?

Uncle Jian further understands that in order to play Cyberpunk 2077, he configured NVIDIA's RTX30 series of high-end graphics cards, but now such high-end graphics cards are extremely out of stock in the market, and the demand is huge, so the supply is in short supply. Under the circumstances, the price increase has become inevitable.

But why are these high-end graphics cards so out of stock?

The answer my friend gave me was that all good graphics cards were taken away by mine bosses.

And the mine bosses he mentioned are those who mine Ethereum.

Since October last year, with the continuous rise of Bitcoin, virtual currencies such as Ethereum have been rising steadily, and the business of mining has also been heating up. More and more people are pouring into this industry hoping to get a share of the pie.

It is said that mining is mining, why are they grabbing graphics cards?

In fact, the so-called mining is mining virtual currency. To put it simply, miners run specific programs and do a lot of computing tasks to get rewards for virtual currency. For example, professional ASIC mining machines can mine Bitcoin. And you can mine Ethereum with a graphics card.

So obviously, when we need to mine Ethereum, we need to use a graphics card, and it is a high-end graphics card.

The reason for emphasizing high-end is that the main competition in the mining process is computing power, that is, to see who can calculate more times per unit time. In this regard, high-end graphics cards can be even better.

So since the market demand for high-end graphics cards is so great, why don't graphics card manufacturers such as Nvidia and AMD produce more graphics cards for sale?

In fact, they also want to, but this is not something they can produce as they want, because the core component in the graphics card is the chip, and the chip industry is experiencing an unprecedented wave of shortages.

How short is it?

According to Lu Weibing, president of Xiaomi China, it is extremely scarce.

In fact, it is not only graphics cards that are affected by the shortage of chips, but also ASIC mining machines for mining Bitcoin, and even other industries, such as mobile phones, PCs, automobiles, etc. Chips are the core components of almost all components.

In January of this year, auto companies such as Honda, Volkswagen, and Ford announced that they would cut production or shut down some factories due to insufficient chip supply.

Then a question that follows is, why is the chip so out of stock? Is it so difficult to make more chips?

Yes, it is very difficult indeed.

The first reason is that the "stay-at-home economy" under the outbreak of the new crown epidemic last year has accelerated the global digital transformation. To put it more plainly, for example, more people are staying at home and playing games, and various online cloud conferences, cloud video and other services are in demand. These will drive market demand for the chip industry.

Although the demand has increased, the foundry of the chip cannot quickly expand the chip production line. The core reason is that the related equipment is very expensive, and the construction of the factory cannot be completed in a day or two, and the investment cost is very large. On the other hand , Blind expansion may cause overcapacity, which may eventually lead to huge losses.

Everyone has seen a situation where the demand is indeed expanding, but the chip production capacity has not increased much.

Therefore, this has led to an extremely unbalanced supply and demand in the chip industry. Coupled with some sanctions imposed by the United States on the semiconductor market, many mobile phone manufacturers have stockpiled goods, further exacerbating the contradiction between supply and demand.

After analyzing this, it is not difficult for you to understand why the global market is so short of cores.

At this time, when we look back at the mining industry, we will find another problem. It seems that the chip industry does not support the mining industry very much, and it can even be said that there are suppressive measures.

How can you tell?

First of all, in order to make full use of the existing chip production capacity, Nvidia left some high-end graphics cards to real gamers. They deliberately rewrote the software program of the RTX 3060 and reduced the mining power of the graphics card by 50%.

And TSMC has also begun to impose a "capacity reduction order" on mining chip suppliers.

The important reason why they take these measures is that they all believe that the virtual currency market is extremely unstable, not only will it rise and fall, but it is not predictable. Such customers and business models are not the core customer group they want to support.

In fact, it is not only now that they realize this truth.

The bull market in 2017 brought a wave of strong mining boom, and Nvidia also rushed in, providing miners with sufficient GPUs for mining, and sales soared.

But soon after, the virtual currency market plummeted, and the demand for mining plummeted, and Nvidia also suffered.

After Nvidia released its Q3 financial report on November 16, 2018, its stock price fell by more than 18% in one day, the largest single-day drop in ten years. On the 19th, the stock price fell again by 12%. Its market value evaporated more than 20 billion US dollars a day, which is already equivalent to the market value of AMD.

On October 1st, Nvidia's stock price reached a peak of $289.36. In less than two months, the stock price has fallen by only half.

Because the miners who originally hoped to mine at a lower cost by purchasing GPUs did not choose to continue purchasing GPUs after the currency price fell, and overestimated the demand in the game market, Nvidia had problems such as a backlog of GPU inventory.

The frenzy for virtual currencies has led to higher prices for Nvidia gaming cards, and some buyers are simply locked out of the door by the price. Huang Renxun, founder and CEO of Nvidia, came forward to say that the ebb of mining machines took longer than Nvidia expected, and the price did not fall as fast as expected. The legacy of the cryptocurrency mining boom affected the excess GPU inventory in the latest quarter. .

And recently you may have heard that Nvidia is going to launch a graphics card dedicated to mining, but their real purpose is not to make mining more enjoyable for the miners, but to ensure gamers as much as possible. Graphics card requirements.

After all, the current Nvidia is no longer the original Nvidia. They have also experienced round after round of currency price surges along with the virtual currency market, miners frantically grabbing goods, and currency price plummets leading to inventory backlogs. These experiences and lessons, they are deeply aware that, This is a market with very unstable demand. They don't like a large number of miners to snap up their graphics cards, because as consumer electronics products, special groups such as miners hold a large number of graphics cards, which may destroy the manufacturers' previously planned strategies. and product pricing.

The most intuitive impact is that when the currency price soars, it is hard to find a card in the graphics card market. After the currency price plummets, the mining boom recedes, many miners no longer continue mining, and a large number of graphics cards flow into the second-hand market at low prices. Affecting Nvidia's new product sales.

Therefore, with the lessons learned from the past, whether it is TSMC’s reduction in production capacity supply to the mining industry, or Nvidia’s desire to focus on the game player group, it is not difficult for us to see that those upstream manufacturers will not take the virtual currency market as such. The skyrocketing business comes first, and they don't like the impetuous state of this industry, especially when the current chip production capacity is seriously out of stock.