GPU Manufacturer Explains High NVIDIA RTX 50 Series Prices; GPU & VRAM Combination Accounts for 80% of Overall Costs

According to a representative from an NVIDIA board partner, securing a GeForce RTX 50 series graphics card at its Manufacturer’s Suggested Retail Price (MSRP) has become increasingly challenging. The primary driver of the inflated costs is attributed to the GPU and VRAM supplied by NVIDIA, which command a significant portion of the pricing, leaving only about 20% of the expenses for components like coolers and other peripherals.

Chinese Vendor Insights: The Challenge of Selling NVIDIA’s GeForce RTX 50 Series at MSRP

The landscape for contemporary graphics processing units (GPUs) is markedly different compared to several years ago. Recently released models such as NVIDIA’s RTX 50 series and AMD’s RX 9070 series are being marketed at prices considerably higher than their original MSRPs. This shift diminishes the perceived value that consumers initially expected.

Although the Add-In Board (AIB) partners technically set the pricing, the market dynamics have led them to find it more profitable to sell factory-overclocked (OC) models at elevated prices rather than adhering to the MSRP for standard models. A vendor in China shared this insight with reviewer 51972, who evaluated 31 different versions of the RTX 5080. The vendor explained that most manufacturers struggle to achieve a healthy margin when selling at MSRP due to the high costs associated with VRAM and GPU components.

Chinese Vendor to 51972 — Image Source: Uniko’s Hardware

The vendor indicated that roughly 80% of the bill of materials (BOM) cost for NVIDIA’s RTX 50 series is consumed by the GPU and VRAM, leaving minimal profit margins for other components such as cooling systems and packaging. Manufacturing these ancillary components often costs only a few dozen to a hundred dollars, making the overall production cost for an RTX 5080 approximately $900. Consequently, selling it at the $1000 mark may not be attractive for many vendors.

“To be honest, it is very difficult for factories to implement MSRP nowadays. The BOM cost of a chip and video memory accounts for 80% of the cost. The cost of a set of radiators + packaging materials is dozens of dollars and almost a hundred dollars. Therefore, the current market policy is to increase the MSRP a little to respond, and the rest will be sold with OC. It is expected that supply will be stable in March, and we don’t even have many test sample cards sent by the media now.”

– Vendor to 51972 (machine translated)

Moreover, when vendors distribute the graphics cards, they tend to stock these items at higher rates to enhance their profit margins, which ultimately leads to inflated prices for the end consumer. The vendor noted that selling GPUs at a premium price becomes easier when they incorporate factory overclocking, justifying a higher price point that boosts profit margins.

NVIDIA GeForce RTX 5080 Vs RTX 4080 Super: Newer But Is It Better?

This pricing trend is evident as premium versions of the RTX 50 series are frequently listed for several hundred dollars above the base MSRP. Additionally, the situation has worsened with graphics cards like the RTX 5090, RTX 5080, and RTX 5070 Ti being sold at steeply inflated prices. AMD’s RX 9070 XT and RX 9070 models have also seen significant price increases, with the base configurations experiencing jumps of up to $130 shortly after their launch. Such trends indicate that AIBs and distributors maintain considerable flexibility in their pricing strategies.

Ultimately, what the market requires at this juncture is improved supply availability to help stabilize prices. The vendor confirmed that availability is anticipated to improve in March, which may give consumers better opportunities to purchase graphics cards without excessive markups.

For further details, you can refer to the news source: @unikoshardware

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