Graphics card, etc. doubled in two months
PC demand rises but profitability is low
The American dollar strengthened and the power shortage in China also overlap

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<The small and medium-sized PC industry is disrupted due to lack of product supply as the price of PC parts such as graphics cards and CPUs soars caused by short supply of semiconductors world wide. A graphic card for PC displayed at a small and medium-sized PC store in Yongsan-gu, Seoul on the 18th. By Min-soo Kim, staff reporter>

PC parts prices are on the rise again. As prices of central processing units (CPUs) and graphics cards are up double in the last two months, small and medium-sized enterprises (SMEs) are deeply troubled. The strength of the dollar and the power shortage in China are also causing delays in product launches. Since August, as the price of major PC components has risen, small and medium-sized PC makers have given up on new product launches or have been unable to supply existing products. As demand for PCs increased, expensive parts were purchased and supplied, but some companies gave up as profitability reached the bottom.

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<Sales price trend by major graphic card model (Source: Danawa>

Company A, a small and medium-sized PC company, launched its first laptop last year as demand for laptops exploded due to COVID-19. They tried to release eight new products this year, but only two were released. This is because it is impossible to meet the price of the finished product as the graphic card price soars. Ahead of the end of the year, the launch of a collaboration product with a home appliance distributor was also delayed for several months because it could not obtain graphic cards. Company B also suffered from a surge in component prices and the power shortage in China. Ahead of the launch of Intel's new CPU next month, we have secured parts despite difficult circumstances, but we are having a hard time as the utilization rate of the mainboard production plant in China is falling. An official from Company B said, “As Intel releases a new 12th generation CPU as early as next month, the PC industry must release the product on schedule, but it is delayed by about a month due to lack of mainboards caused by the power shortages in China.”

The analysis of the price of major PC components through Danawa in the second week of October, the Electronic Times found that compared to the first week of August, the average price of graphics cards increased by 33.9% and CPUs by 8.9%. Some models, such as 'EM Tech GeForce RTX 3060 Storm X Dual OC D6 (12 GB)', have nearly doubled their price compared to early August, reaching 1 million won.

This is because supply was not smooth due to a shortage of semiconductors that continued from last year. Bitcoin mining, which has led to a rise in graphics card prices, was on the down low due to regulations by the government in China, but the mining main force moved to other countries, which caused the demand for graphic cardsto rise again. In addition, the won-dollar exchange rate, which was in the 1080 won range at the beginning of this year, has recently risen to the 1,200 won range causing the price inflation on parts.

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<Sales price trend by major CPU model (Source: Danawa)>

Dong-soo Kim, president of the Government Procurement Computer Association, said, “Public procurement has extended the delivery period by two weeks since the beginning of this year, but the supply of parts is not smooth, so it is difficult to deliver. The association is also discussing related countermeasures such as joint purchase.”

By Yong-cheol Jung, staff reporter