2020 will be a special year for the video card market. The main actors remain the same, they will always be AMD and NVIDIA to play it to conquer the PCs of players all over the world. At the same time though Sony and Microsoft will launch the new consoles later this year, but production of the PS5 and Xbox Series X will begin well earlier. The plants will stock up on components during 2020, to better support the production of the two consoles.
Among these there is one that unites the PC world and the console world, that is video memories. The GDDR6 will be inserted both on PS5 and on Xbox Series X, as well as in the new generation video cards arriving on PC. The result, according to a DRAMeXchange study, will be higher than expected demand, which could lead to increases in the cost of GPUs.
Production capacities are not infinite
The current production capacity in the electronics world cannot satisfy the global demand for components. This is not always the case, but in times of high demand, production limits always surface. In recent years we have had several examples of how strong demand can change, even radically, the price of a particular product. Just think of what happened to the cost of video cards in the midst of the mining boom, where prices have even doubled in some cases. Another example comes from Intel, struggling for several months with a demand higher than the offer, which has caused an increase in the CPU lists.
We could see a similar phenomenon next year, caused by high demand for GDDR6 memories. During 2019 the production of these memories increased but their use remained limited to a relatively small number of GPUs.
We find them in NVIDIA’s RTX and AMD’s Navi architecture models, but the list is not that long. However, GDDR6 will become the standard in the PC market next year, with the arrival of the new generation of NVIDIA and AMD video cards. If we add to this the very high demand for GDDR6 memories for use in new consoles, here the current production of this component starts to go tight.
According to estimates made by DRAMeXchange, starting from the first quarter of 2020 the cost of GDDR6 could rise by more than 5%, causing a chain effect that would lead to an increase in the price of the GPUs. It is difficult to understand now what the impact on the price lists will be, and especially if the limited availability of GDDR6 will impact also on the cost of PS5 and Xbox Series X.
The certainty is that if the demand remains that estimated by DRAMeXchange, an increase in prices seems to be inevitable and could lead to fluctuations in the cost of video cards throughout 2020.