Miners bought 25 percent of all graphics cards in the first quarter of 2021

There is a shortage of computer components of several kinds, especially graphics cards. The lack of graphics cards is attributed to several reasons, among them of course the currently infamous circuit shortage, the corona pandemic and an increase in the mining of cryptocurrencies. The sky-high demand has caused prices to skyrocket and led to record figures for both AMD and Nvidia.

A recent report from Jon Peddie Research specifically analyzes the impact of cryptocurrencies in relation to sales figures. During the first quarter of 2021, it is estimated that 25 percent of all graphics cards from partner manufacturers (AIB) have gone to miners. This is equivalent to approximately 700,000 graphics cards worth $ 500 million.

The analysis company has studied so-called attach rate between partner manufacturers’ graphics cards and computers, ie the sales of these graphics cards in relation to the sales of computers. The ratio between the two has been declining in percentage since the 1980s, until cryptocurrencies took the stage in 2014.

More recently, we watched the attach rate drop to 25% and recently jump up to 50%. We calculate the mining use of AIBs as the difference between the trending normal attach rate and the current rate. The assumption being that miners have dedicated rigs and do not buy a PC to build a mining system. For the most part, that is true; however, some amateurs buy PCs for mining.

In recent times, the ratio has changed rapidly, from first falling to about 25 percent, it has since risen up to 50 percent. According to the report is mining driving in the large increase, because the facilities that break cryptocurrencies are not in any need of many individual computers but instead buy large quantities of graphics cards. The forecast does not take into account individuals who break cryptocurrencies on a smaller scale.

The trend is very similar to the period 2016–2018, which was even then driven by miners’ needs. When large quantities of graphics cards were purchased, a false image of demand was created. Manufacturers increased production, but as interest cooled, the market quickly saturated. Both manufacturers and retailers had large stocks, while the second-hand market was flooded with cheap used graphics cards.

At the moment, it is, among other things, Ethereum that miners invests in hardware to break, a cryptocurrency approaching a transition from performance-hungry proof-of-work to proof-of-stake. There is also an overall problem with scalpers, which buys large quantities of components for resale. Jon Peddie warns that a combination of these again creates an incorrect picture of demand and risks repeating the same scenario.

However, the current shortage of circuits is changing the situation compared to last time. It is not only graphics cards that use the circuits that are manufactured and there is a limited manufacturing capacity. Despite the massive resources invested worldwide in circuit manufacturing, the fact remains that there is a lack of capacity to overfill warehouses in the same way as before. mining-hysteria.

In addition, the shortage of circuits has been going on long enough to create a fundamentally higher demand among ordinary consumers. Overall, it could mitigate the effects of overfilled stocks, even if the risk remains.