Let us take a look at key factors that contribute to the high prices of GPUs.

1. Supply and demand imbalances
   • High demand for GPUs from gamers, AI/ML researchers, and cryptocurrency miners can outpace available supply, driving up prices [1] [2] [4].
   • When new, more powerful GPUs are released, demand surges and prices rise until supply catches up [3].
   • Conversely, when crypto mining profitability drops, used GPUs flood the market and prices fall [4].
2. Manufacturing and material costs
   • GPUs are complex to manufacture, requiring advanced semiconductor fabrication processes and expensive materials like silicon wafers [3].
   • Newer process nodes (e.g. 7nm, 5nm) are more costly to produce, increasing GPU prices [2].
   • Supply chain disruptions and shortages of key components can constrain GPU production and availability [4].
3. Tariffs and taxes
   • Import tariffs on GPUs and components, especially between the US and China, can significantly increase costs for manufacturers that get passed on to consumers [2] [4].
   • Sales taxes, VAT, and other levies further increase the final price consumers pay for GPUs in many countries [2].
4. Lack of competition
   • Nvidia and AMD have a duopoly in the dedicated GPU market, allowing them to keep prices high [3].
   • Until Intel’s Arc GPUs mature, there are few alternatives to drive prices down through competition [3].
5. Retailer and reseller markups
   • Retailers increase prices based on supply/demand and to boost margins [1] [3].
   • During shortages, scalpers and resellers capitalize on scarcity to charge exorbitant prices [1] [4].
6. Exchange rates and regional pricing
   • GPUs are priced in USD, so the relative strength of the dollar impacts global pricing [2].
   • Regional supply/demand differences and import costs lead to varying prices by country [2].

So in summary, the high cost of GPUs is due to a perfect storm of expensive manufacturing, supply constraints, high demand from multiple computing segments, lack of vigorous competition, tariffs and taxes, and scalping. As cryptocurrency mining demand has waned recently, prices are starting to stabilize and fall in some cases [3] [4]. But GPUs are likely to remain pricey for the foreseeable future given the ongoing challenges in production and persistent demand for their unmatched parallel processing capabilities.

• GPUs are priced in USD, so the relative strength of the dollar impacts global pricing [2].
• Regional supply/demand differences and import costs lead to varying prices by country [2].

So in summary, the high cost of GPUs is due to a perfect storm of expensive manufacturing, supply constraints, high demand from multiple computing segments, lack of vigorous competition, tariffs and taxes, and scalping. As cryptocurrency mining demand has waned recently, prices are starting to stabilize and fall in some cases [3] [4]. But GPUs are likely to remain pricey for the foreseeable future given the ongoing challenges in production and persistent demand for their unmatched parallel processing capabilities.

References

[1] toolify.ai: Exploring the Factors Behind Expensive GPU Prices
[2] tomshardware.com: eBay Historical GPU Prices 2023: November 2023 Update
[3] gadgetmates.com: GPU Prices: Factors Affecting Graphics Card Costs
[4] news.yahoo.com: eBay Historical GPU Prices 2023: November 2023 Update

Based on a chat with claude-3-opus on perplexity.ai