Reports suggest that both AMD and Nvidia are planning to stop the production of some of their low- and mid-range GPUs.
A new challenge is approaching the market for affordable graphics cards — the shortage and rising cost of DRAM and VRAM memory.
The growth of Artificial Intelligence (AI) has greatly increased the demand for memory, using much of the available supply and driving prices up. This rise directly impacts the production cost of graphics cards.
Rising Memory Costs Affect GPU Manufacturing
In high-end GPUs, memory represents only a small part of the total cost. However, in lower-end and mid-range models, the higher price of VRAM (video memory) takes up a much larger portion of the profit margin.
Because of this, manufacturers are expected to focus on models that generate a higher Return on Investment (ROI) — mainly the high-end graphics cards.
If this trend continues, gamers who prefer more affordable GPUs will be hit the hardest. The market might see the disappearance of budget options or a significant price increase in models such as the RTX 5050, RTX 5060, RX 7600, or RX 9060 XT.
For someone looking to buy a GPU around $300, a 10% to 20% price increase is much more discouraging than for someone buying a $700 card.
This situation could also lead GPU manufacturers (AIBs) to reduce their product lines or even lower memory configurations in future models to cut costs — both outcomes are bad news for consumers.
