PC Components

Why Are Computer Parts so Expensive?

Computer Parts

Computer parts are expensive for many reasons, including:

  • Raw material costs,
  • Advances in technology,
  • Low supply,
  • High demand,
  • Inflation,
  • Scalping.

While there are ways to find the parts cheaper, such as looking to pre-built computers, prices are expected to continue rising unless these issues are resolved.

Keep reading to learn where they stem from and how they affect each computer part.

Raw Material Costs

Computers may not be as large as a vehicle, but there are a lot of costs that go into producing the materials needed for each part.

Every component you purchase is priced based on:

  • Material
  • Research
  • Development
  • Manufacturing

Certain resources used for production, such as neon, are challenging to locate and costly to extract. These costs transfer directly to the rising expense of most computer parts.

Advances in Technology

Everyone is interested in the next best thing, but it comes at a cost.

As new computer parts come out, consumers are tasked with paying for the time, effort, and knowledge it takes to move that component forward. You will notice larger disparities between generations of major components, such as GPUs and CPUs because those parts’ advancements are much more significant.

While components used for storage still move forward in terms of capacity and speed, they do not hold a candle to the effort of pushing graphics and performance to new heights.

Low Supply

Current events have had a significant impact on the price of computer parts. While price increases are expected as time progresses, the pandemic and present conflicts create instability in producing chips that many components rely on.

The COVID-19 pandemic has reduced production through:

  • Quarantines
  • Diminished supply chains
  • Labor shortages

The pandemic hit the chip industry hard by limiting the number of workers in an area, giving ill workers the time they need to recover, and accommodating the necessary sanitization efforts.

Conflicts in areas like Ukraine, a significant producer of neon gas, also hurt the ability to produce components.

High Demand

The COVID-19 pandemic also effectively increased the demand for many computer parts, regardless of their intended use. As people spent more time at home, they needed devices that could entertain them and allow them to work from home.

Many took the time at home to cultivate hobbies and careers that require higher-quality computer parts, including online gaming and graphic design.

People also took a significant interest in cryptocurrency. Those looking for a way to mine valuable cryptocurrencies like Ethereum need to use high-end graphics cards to complete the task at a profitable rate. 

While high demand has always been an issue, the pressure of the pandemic caused the gap between supply and demand to grow, leading to more expensive computer parts.

Inflation

While most of the expense surrounding computer parts relates to these shortages and advancements, the inflation rate affects computer pricing.

This is why you see higher expenses on parts that might not be related to supply and demand issues, such as storage components.

These computer parts are less likely to jump in price, but they will continue to inflate.

Scalping

The supply and demand issue is also a significant breeding ground for scalping. This is when someone, usually an individual, purchases as much stock as possible and resells the parts for more than the MSRP.

Scalpers can make quite a bit off computer parts, and they usually can price them at 1.5x to 3x MSRP and still have buyers. This is more common with GPUs than any other part.

Stores have taken measures to prevent scalping as much as possible, such as limiting purchases to one per customer. Still, the most effective way of combating this issue is by refusing to interact with scalpers.

Expense by Part

The most common computers parts bought include:

  • CPUs
  • GPUs
  • RAM
  • HDD and SSD

These parts have different expenses, and their prices are affected in varying degrees.

CPUs

Central Processing Units are essential to a functioning setup, but there is less demand for these parts. Tasks such as mining cryptocurrency do not require an advanced CPU, and most older parts still perform well compared to newer CPUs.

They are still expensive as far as computer parts go, but you should not have a problem finding one at its MSRP on the shelf.

GPUs

Graphics processing units are the computer part hit the hardest by issues like chip shortages and increasing demands. The number of communities searching for advanced GPUs compounds any existing shortages.

While companies have attempted to combat the issue by bringing back older models with slight adjustments, finding a GPU on the shelf at a reasonable price isn’t easy.

RAM

Most RAMs use older manufacturing processes, and the demand for these parts has remained relatively consistent through the years.

While DDR4 and DDR3 RAM should not have shortages, DDR5 processes are likely to suffer price increases.

HDD and SSD

Storage parks like HDD and SSD are still affected by shortages, but the effects are minimal.

The story might be different if the storage-based cryptocurrency Chiacoin took off in 2021, but most storage is readily available at a reasonable price.

The price difference is not always a bad thing. While HDD And SSD accomplish the same fundamental goal, the technological design of SSD merits a higher price. They are faster and use less electricity, often making them a better choice than HDD.

Pre-built Computer Expenses

One of the ways that consumers are getting around the high prices for parts is by purchasing pre-built computers and using those components.

Builders can purchase expensive parts like GPUs from the manufacturer at the MSRP, and they are not victims of scalpers or price gouging.

This allows them to charge a reasonable price for the complete setup, and consumers can buy the entire system for about as much as the graphics card would run them.

Cutting Expense When Buying Computer Parts

The easiest way to limit the expense when buying computer parts is by insisting on purchasing from a brick and mortar store over a scalper. This requires patience, but it can cut the price in half.

If you have difficulty finding parts on the shelf, check with your local parts store to learn when they restock. Follow Twitter accounts and Discord channels dedicated to monitoring restocks, and make it a habit to check shelves when you are out and about.

Computer parts have always been expensive and will continue to increase, but this cost is often worth the entertainment and uses you get from the upgrades.

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