Why is the graphics card getting more and more expensive? NVIDIA profit margin doubles in 20 years

In recent years, the price of game graphics cards has become more and more expensive, especially after nVIDIA launched Turing graphics cards in 2018, the price of the flagship graphics card went directly from 56,000 to 10,000 yuan. Looking back, the price of graphics cards is really going up all the way, with NVIDIA’s gross margin doubling from 30% to 60% over the past 20 years.

NVIDIA recently updated its April investor report with some interesting data that we can see AMD’s revenue surging over the years, from $5 billion in fiscal 2016 (the calendar year is about 2015) to $10.9 billion in fiscal 2020.

Why is the graphics card getting more and more expensive? NVIDIA profit margin doubles in 20 years

In addition, NVIDIA also published the GM gross margin indicator, in 1999 NVIDIA gross margin of only 30% plus, in the semiconductor company is not high, in 2014 to 50%, in 2019 to further increase to 60% plus, doubled in 20 years.

More than 60% of the gross margin in semiconductor companies that is quite high, Apple iPhone gross margin is only about 40%, in terms of earning power alone NV is better than Apple, selling a GPU can make more than half of the profit.

Objectively speaking, 60% gross margin is not only a game GPU, but also a contribution to the data center and other markets, like the Tesla series of acceleration cards, like the thousands of dollars of graphics cards, making more money than consumer graphics cards, which is also the industry’s practice.

However, the game card is still the main source of NVIDIA, more than half of the revenue is from the game GPU, so the price of game cards in recent years also contributed a lot to NV’s gross profit, after all, the competition in recent years is a bit weak, not price increase is not normal.