A production partner of NVIDIA in China has revealed the reasons behind the rising prices of GeForce RTX 50 Series GPUs, which are significantly higher than their suggested retail prices (MSRP). It is reported that nearly 80% of the production cost for these card lines comes from the GPU and VRAM – the two main components provided by NVIDIA. The remaining costs are allocated for cooling systems, enclosures, and additional parts, making it difficult to sell the cards at MSRP without incurring losses.
OC Versions Priced Higher Due to Low Profit Margins at MSRP
A reviewer known as 51972 tested 31 samples of the RTX 5080 and communicated with a supplier in China, confirming that many manufacturers find it challenging to sell GPUs at MSRP. The primary reason is that the production costs are too high, especially for GPUs and VRAM, while the costs for components like cooling systems or enclosures only fluctuate by about 100 USD.
“The reality is that manufacturers are struggling to sell GPUs at MSRP nowadays. The cost of chips and VRAM accounts for 80% of the total expenses, while cooling solutions and enclosures only cost about 100 USD. Therefore, the current policy is to adjust the MSRP slightly higher and focus on OC versions to generate profit,” said a supplier in a conversation with 51972.
OC (Overclocked) GPU versions are always sold at higher prices due to being factory overclocked. Increasing GPU clock speeds is not too complicated, but it allows manufacturers to market “premium” products at higher prices, leading to greater profit margins compared to standard models. This is precisely why many GPU models like the RTX 5090, RTX 5080, or RTX 5070 Ti are currently priced in the hundreds of USD range.
Not just NVIDIA, AMD’s graphics cards like the RX 9070 XT and RX 9070 have also seen substantial price increases, especially in the first week of sales. The prices of RX 9070 models have surged by up to 130 USD just a few days after launch, indicating that manufacturers and distributors can adjust prices based on market demand.
Nonetheless, the good news is that supply sources are expected to stabilize in March, which may help lower prices to more reasonable levels. Suppliers have confirmed that the current scarcity situation is likely to improve, which could help prices return to more acceptable ranges compared to the present.
