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Demand Squeezes Industry As Chip Drought Wears On

As chip shortages continue to plague the consumer electronics industry, Nvidia is taking action to curb rampant buying-up of its graphics cards.

Fuelled by factors including COVID-19 and the US-China trade stoush, low supplies of semiconductors are hammering everything from Samsung smartphones to Sony PlayStation 5s and even new cars. The chip shortage is tipped to lead to higher prices on consumer electronics, in particular new smartphones released this year.

Exacerbating the problem for US chipmaker Nvidia is huge demand for limited supply of its Ampere-powered RTX 30-series graphics cards, driven in part by cryptocurrency miners bulk buying the cards as the value of the Ethereum coin skyrockets.

In an effort to combat demand that is keeping its cards out of consumer hands, the manufacturer is deliberately kneecapping crypto mining on its new entry-level RTX 3060, set to release this week.

The cards will detect the Ethereum mining algorithm and slash its efficiency in half, in what Matt Wuebbling, VP of Global GeForce Marketing at Nvidia, says is an effort to make sure more of the cards end up in consumer hands.

“Our GeForce RTX GPUs introduce cutting-edge technologies — such as RTX real-time ray-tracing, DLSS AI-accelerated image upscaling technology, Reflex super-fast response rendering for the best system latency, and many more — tailored to meet the needs of gamers and those who create digital experiences,” he said.

Nvidia is coupling this with the launch of a processor specifically for cryptocurrency mining (above), to be sold through partners including Asus, Gigabyte, and MSI, in an extra effort to relieve demand on the gaming-focused GPUs.

Other companies are also feeling the squeeze from the semiconductor shortage: Samsung has reportedly been hit hard, according to the Korea Herald, with engineers flying into Austin, Texas to help restart the company’s chip factory following the recent power blackouts.

Sony and Microsoft’s PS5 and Xbox Series X consoles, as well, have been impacted by the semiconductor drought, with low supply of AMD-manufactured processors contributing to a dearth of stock for both consoles that is tipped to persist well into 2021.

Taiwanese chipmaker Foxconn has downplayed the crisis, however, saying big customers with “proper precautionary planning” will face only a “limited impact” from the shortage; similarly, Chinese PC giant Lenovo has waved the problem away, saying production is not being impacted.

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