Why Are Computer Parts So Expensive? (Top 10 Reasons)

It is difficult to afford CPUs, GPUs, motherboards, memory, and other parts of a computer system even in times of prosperity.

High-tech computer components require advanced manufacturing and development processes.

This indicates that computer parts are becoming more expensive than ever.

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Computer parts can be so expensive (Top 10 Reasons).

Computer components are becoming more expensive due to several factors. These include increased demand, lack of availability, supply chain issues, government issues, and changes in the social environment.

1. The Pandemic

In March 2020, millions of people around the globe locked themselves in their homes to prevent the spread of the COVID-19 pandemic.

Although this was originally intended to temporarily reduce the curve, it quickly became a months-long lockdown. The worldwide effects are still being felt today.

The lockdown reshaped social media landscapes and forced people to stay at home to discover new ways to communicate with outsiders.

This was possible because of the increased use of technology.

People have turned to technology to shop and work, to attend school and to connect.

The increased dependence on technology has led to more compatible devices which required more computer parts, which in turn resulted in higher production.

The lockdowns that caused the high demand for computer components meant that production could not keep up.

Production facilities were either closed completely or managed by a small staff. This severely reduced production.

When there is less production or higher demand, more parts will be expensive.

2. Demand

Laptop demand has soared due to the pandemic of global health.

The greatest increase in computers purchased since 2012 was 14.8%.

Pre-pandemic, consumers preferred new mobile devices to investing in computers. This caused a drop in sales for ten years.

This trend was reversed by panic attacks and a surge in laptop sales.

Students and workers were required to travel to school from home.

Each member in the household would need to have their own device.

This sudden increase in demand was immediately noticed by the computer industry. The computer industry quickly responded by increasing the prices of computer parts and computers in order to reflect both increased demand and decreased availability.

Prices are higher for parts that are in high demand or scarcity.

3. Mining

Data mining is on the rise.

Data Mining is the process of gathering, analyzing, and then using large data sets to influence business decisions.

Every bit sent over the internet travels through a Data Center.

People relied more heavily on the internet to learn and work.

Data mining is more efficient when there are more data centers. This means there’s more data available to analyze to gain insight that can increase revenue.

This demand has increased for servers that process and store this data.

Servers use the same computer components as other devices but on a greater scale.

A problem is back with the supply-demand imbalance in computer parts prices.

Crypto mining refers to the use of computers for complex mathematical calculations to validate transactions on the blockchain.

Mining refers to validating transactions. Partly, crypto is mined to reward the computer that validates these transactions. You could also reward a gold miner with small flecks for your mining efforts.

The most used crypto currency is

Bitcoin prices soared from $6,000 in March 2020 to $60,000 by November 2021.

A dramatic increase in Bitcoin prices caused a surge in cryptocurrency miners.

Cryptocurrency mining is however very expensive.

GPUs are the best way to mine cryptocurrency like Bitcoin.

High quality GPUs can handle the processing load of mining crypto.

A higher demand for GPUs from crypto miners and a decreased supply leads to higher prices.

4. Chip Shortage

The Pandemic caused a shortage of chips, which is a shortage of semiconductors.

After the pandemic, chip production saw a dramatic drop in output. Some semiconductor factories were forced out of business, while others saw a sharp drop in production. This caused a dramatic drop in production.

Semiconductors are also known as integrated circuits or microchips. They are made up of pure elements that have been doped in order to create impurities.

Conductivity can be affected greatly by these impurities. This allows a charge to travel through the base or turn it on.

This process is what computers use to communicate.

Without semiconductors the entire computation process would cease

Most electrical devices today use some kind of semiconductor. This includes everything from an electric toothbrush, to a car battery.

The decrease in available semiconductors and increased demand leads to an increase of the prices of products including semiconductors.

5.

The world was trying to open once more after the lockdowns had ended. A new factor came along. It had an adverse effect on the computer component prices.

Factory workers were encouraged to return to work.

While some employees had grown used to the liberties that the pandemic provided, others were more concerned about the risk of COVID infections. Many employees were also able to change careers.

It didn’t matter why, employers found it difficult to find workers to make computer components such as aluminum, copper and PVC.

Besides the scarcity of skilled workers in the area, those who returned were lured by higher wages and other perks.

To compensate for the rising wages, the prices that they charged to produce the goods were raised.

6. Supply Chain Crisis

The supply chain is the interconnected process through which a product has to pass in order for it to reach consumers.

The source of a semiconductor’s raw material may be from one country.

This raw material will then be shipped to another country in order to be made into a useful chip.

This chip can then be taken to another country, and put in a product such as a motherboard.

After installation, the motherboard will be shipped to another country.

Once it’s inside the laptop it goes to distribution points, where it can then be sold to the customer.

A broken or missed step can cause the chain to break.

The pandemic created major supply chain problems.

Some countries were placed under lockdown, to stop goods being produced and delivered from one country to the next.

Shipment barge log jams were an example of port’s decreased functionality.

Loaded barges could be left untouched for many weeks in the sand near ports that are accessible for loading and unloading.

All these disruptions to supply chains resulted in a significant drop in the availability of computer components. This was accompanied by an increase in demand. This led to an increase in computer part prices.

7. Freight Costs Increase

The vast majority of computer parts found in the United States were made in another country.

Container freight transports parts around the ocean.

In 2019, the container freight rates for 2019 were around $1,300

Container freight rates reached an unprecedented $10.323 record in August 2021.

The rate fell slightly in August but was still very high at $9,000 in January 2022.

The massive rise in shipping cost for computer parts to America is evident by the increase in computer components’ prices.

Prices can be more than just for container freight.

Before the pandemic, many commercial flights transported manufactured goods.

The flight was grounded and travel was discouraged. Air freight became more expensive because of a reduction in the number of available planes.

8. TSMC Price Hike

Taiwan Semiconductor Manufacturing Company, is a major manufacturer and supplier of semiconductors.

TSMC declared in August 2021 they would increase prices anywhere between 10-20% within the next few years.

The large price rise was caused by the increased demand as well as the lingering pandemic effects such as shutdowns (or shelter-in place mandates) and water scarcity.

The price rises are bad news.

The higher the number of semiconductors required for a device, the more expensive it will be.

Vehicles and other products that don’t need many semiconductors won’t see their price rise as much.

The price rise in semiconductors is felt by products such as GPUs and CPUs.

This increase will be passed on to the consumer in the form of higher prices for the parts.

9. Computer Companies First Receive Available Parts

The availability of components for computers is limited, which may impact the price of parts.

Common misconception: Large tech-producing corporations buy and sell components before they reach the consumer.

Large corporations are able to place large quantities of parts orders. This allows smaller companies to have fewer parts on the receiving list.

This is because fewer parts will be made available to consumers and the prices for those parts will rise due to scarcity.

10. Scalping

Scalping refers to the practice or reselling of products for a higher margin.

The scalers took advantage of all the factors that contributed to higher computer parts prices due to the pandemic and were able to anticipate them.

These hackers were able to continue buying high-value parts for resale through intermediaries such as eBay.

Some distributors were less ethical and took advantage of the shortage to increase profits.

Unscrupulous distributors deliberately keep products back and have rationed the products slowly at a much higher cost to increase profits.

Scalpers demand exorbitant fees. This will drive up the cost of computer parts.

When is the Computer Parts Price Going to Drop?

Unfortunately, it is not expected that computers will become more affordable until 2023.

This prediction is based on the normal supply level of semiconductors at that time.

It is anticipated that order holdbacks can be filled by 2023. The demand for semiconductors should match the output of semiconductor producers.

A crypto bearish, or another factor that can positively affect the price of computer parts, could also be a factor.

When crypto prices fall, it is called a bear market.

If this happens, mining components such as GPUs will see a decline in demand. This will cause a drop in demand but a rise in supply.

Lower prices can be achieved when there’s less demand and greater supply.

The third option for computer hardware’s future prices is for current price levels to become the norm.

The profit margins of computer parts manufacturers have increased significantly as more people turn to technology in everyday life.

Nvidia, AMD, and other suppliers are highly sought-after products.

The market demand shouldn’t cause producers to reduce their prices. Consumers won’t pay more for a lower price.

It is very difficult to get into the market for computer components for startups.

Since there is no competition, main providers can set their own prices without interference from other producers.

Discounts on Computer Parts

Saving money is easy when you consider rising prices for computer parts.

1. You can think small

It is easy to get caught up in all the technical terms used in the computing industry. You don’t necessarily need the best and most advanced parts of your computer to use it daily.

This Intel Core i9-12900K offers 192 FPS but will set you back approximately $599.

This Intel Core i5-12400 is a good deal at $199. It’s very suitable for most users.

The GeForce-RTX 3090 GPU Market Machine is also impressive, with an incredible 10,496 cores and a clock speed of 1.40GHz.

The price of this GPU is $2700

But, the GeForceRTX2060 can be purchased at $599.

Despite being only half as powerful as the 3090, the RTX2060 still ranked 51st out of 673 GPUs.

2. Assess the Problem

Although it may seem tempting to purchase new computers when you are having computer problems, it’s best to first diagnose the problem.

You might think that upgrading your GPU is the best thing for you, especially if images aren’t looking great.

It might not be your GPU that is the problem.

It is possible that your monitor cannot keep up with the GPU’s speed. This could result in poor image quality.

Another example could be a slow internet connection.

This may not be a problem on your computer. It could be your ISP’s slow Internet speed.

3. Forgo Aesthetics

Computer components, just like other products, are designed to increase sales by appealing visually.

Some parts of the website, including GPUs have attractive visuals that entice customers to come in.

Use of cool lighting and stylish casings won’t improve product performance.

You should look for products with the highest power that will best suit your needs. However, these may not be as flashy or expensive as high-end versions.

4. Take a good look around

It is tempting to grab the first item you find that works, but it is better to shop around.

You have the ability to compare prices for different options that will meet your needs.

Take into consideration the large discounts offered by Cyber Friday and Black Friday.

Sometimes, computer parts are on sale just like with other products.

Rebates are another thing you should watch out for.

Parts manufacturers often offer a mailin-rebate in conjunction with their products.

Simply fill them out and submit them.

Which is the Best Location to Buy Computer Parts In Your Area?

If you are looking to buy computer parts, contact the manufacturer.

Directly ordering from the manufacturer has many benefits.

Products can be offered at a discounted price by the manufacturer.

Third-party sellers will need to order the product directly from the manufacturer. The manufacturer will charge an additional shipping fee if the product is not delivered to their location.

This happens because manufacturers sell directly with their customers and don’t require additional overhead.

The manufacturer can also be bought directly and receive a warranty.

Direct sales are offered by many computer component makers, including Nvidia, Intel and Logitech.

You should only shop with companies that are experts in computer technology when you’re looking to buy parts from third-party resellers.

These companies are more knowledgeable about their products and can answer all your questions.

It is becoming more common for dedicated computer shops stocking a greater range of products to fit specific needs.

MicroCenter.com, along with Newegg, PC Connection, and Best Buy, is one of the most recognizable third-party retailers.

 

 

 

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