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Average GPU Pricing Skyrockets as Market Quadruples to $12.5 Billion, Report Says

MSI
(Image credit: MSI)

Discrete GPU suppliers for desktop PCs nearly quadrupled the cash they raked in during Q1 2021 compared to this time last year. That's due to the skyrocketing increases in average selling prices (ASPs), according to Jon Peddie Research.

Nvidia retained its leadership and outsold its rival AMD four-to-one in the discrete GPU market, but it's clear that both vendors are selling every chip they can manufacture.  

GPU Pricing Skyrockets, Revenue Jumps 370%

According to the report, GPU makers earned around $12.5 billion in Q1, a whopping 370% increase over last year. A big part of that gain is due to skyrocketing pricing. 

(Image credit: Jon Peddie Research)

As you can see in the image above, everything changed in the second half of 2020 when GPU pricing — from entry to midrange and from high-end to workstation — skyrocketed nearly overnight in the fourth quarter as a result of demand from gamers and miners. 

Today the average price of an entry-level graphics card is $496, a mid-range board costs $809, and a high-end GPU carries an $1,358 price tag, according to JPR.  

Analysts from Jon Peddie Research believe that price increases are driven by a number of factors, including component shortages, insufficient manufacturing capacity, strong demand from gamers, and solid (albeit limited) demand from Ethereum cryptocurrency mining.

Interestingly, the average price of a GPU has increased slowly over the years as lower-end systems migrated to integrated GPUs, whereas owners of higher-end machines demanded better standalone graphics boards. For instance, the average pricing for a high-end graphics card increased from around $500 in the first half of 2018 to around $780 in the first half of 2020. Meanwhile, average prices of entry-level and midrange third-party cards tend to fluctuate depending on actual offerings and refresh cycles. Those incremental price increases turned into an avalanche in recent times, though. 

11.77 Million Graphics Cards for Desktops Sold in Q1

Unit shipments of discrete graphics cards for desktop PCs reached 11.77-11.8 million units in Q1 2021, a 7.77% quarter-over-quarter increase and a noticeable 24.4% year-over-year growth, JPR reports. Typically, sales of graphics boards drop in Q1 compared to the prior quarter, but that was not the case this year. 

(Image credit: Jon Peddie Research)

The increased sales can be explained by the growing demand for gaming graphics cards as well as add-in-boards used for cryptocurrency mining. 

(Image credit: Jon Peddie Research)

AMD managed to increase its market share by 3% in the first quarter and commanded 20% of discrete GPU unit shipments. In contrast, Nvidia lost 3% but had a market share of 80%, still a dominant position. 

(Image credit: Jon Peddie Research)

"We believe the stay-at-home orders created demand in 2020 and in the first quarter of 2021," the analysts said. "Home PCs and workstations became the center of professional life and often the main source of entertainment during the lockdowns. Gaming added to the pressure on the supply chain as it continued to grow in popularity. But, as we said, this is also an anomalous period in graphics history. Prices are high as a result of shortages and so is demand in response to cryptocurrency prices."