 It's China Joy! Sorry, what is China Joy? Well, apparently it's a big enough event for AMD to announce their latest GPU there. So, yep, another graphics card no one can afford thanks to scalpers and miners. Or is it? Yes, it is. But AMD's Radeon RX 6600 XT announcement also gives us an excuse to talk about why pricing for these parts is still so outrageous and some of the big changes that could finally put an end to the GPU shortage in the coming months. It also gives us an excuse to tell you about our sponsor, Seasonic. Never skimp on getting a quality power supply for your current or next computer build. Check out Seasonic at the link below to find award-winning power supplies to meet your needs. AMD's new Radeon RX 6600 XT is looking like a pretty standard launch so far. You got 32 compute units, eight gigs of GDDR6 memory, and 32 megabytes of Infinity Cache. Clock speeds are reasonably high, and we already know that RDNA2 is a ridiculously scalable architecture thanks to earlier looks at their mobile parts. They'll be available starting August 11th from third parties only, no AMD branded card this time around, although AMD says that there is a reference design that will likely make up the bulk of the early shipments. The reference design calls for only a single eight-pin PCI Express power connector with a total board power of 160 watts. That's not too shabby for what AMD is touting as a 1080p monster that beats out the RTX 3060 and pulls over double the GTX 1060's performance. And it's efficient enough to be CEC compliant, unlike certain gaming PCs from our friends at Dell. Got him. Make sure you get subscribed by the way, we have a whole video coming about that debacle. The only problem with this announcement is that if you hated the RTX 3060's MSRP of 329 US dollars, the RX 6600 XT's $379 price tag is going to be even more painful. It is roughly as fast as its price difference suggests, if AMD's benchmarks are to be believed however, so it could still end up being a great value, at least by today's standards. It's an open secret that GPU prices have been steadily rising over the past few generations. I mean, heck, the GTX 1080 launched at 599 and the 1080 Ti, a GPU that held its status as a top tier gaming card for over three years, cost just 699. Ah, memories. But unfortunately, memories may be all there is left to that kind of pricing, at least for the foreseeable future. And trust me, I hate it too, but that's just the way it is. As for why it's the way it is, there's a litany of reasons, but a few key factors stand out. Starting with of course, the corporate greed angle that's been thrown around ever since the launch of Nvidia's RTX 20 series. The thing is, believe it or not, both Nvidia and AMD for that matter, loved their shareholders much more than they will ever love you or me. But it's also not the only reason. There are some very real logistical problems that are steadily pushing pricing up as companies try to remain profitable. Though to be clear, the companies I'm referring to there are not Nvidia or AMD, neither of which are struggling to remain profitable. In fact, compared to a year ago, both of them reported nearly double the gaming revenue in the most recent quarter with healthy gross margins of anywhere from 50 to 65%. So the business of designing GPUs, partnering with a chip foundry like TSMC or Samsung, and selling the chips to board partners is as healthy as ever. It's the board partners, folks like EVGA, ASUS or MSI who are feeling the squeeze and passing that squeeze along to you. Take memory for example, DRAM supply has been seriously hampered by the silicon shortage with contract pricing going up by five to 10% in the first quarter of this year, then a staggering 20 to 25% in the second quarter with a projected eight to 13% more again, coming in the third quarter. That is over a 50% cumulative increase in the price since the end of 2020. And SPOT prices have been consistently worse with current prices sitting at easily double the contract price and trend force saying that at the scalp-pocalypse's peak, SPOT prices were up as much as 200% higher than contract pricing, which is wow. So that is why Nvidia can the rumored high memory RTX 30 series, eh? At least for now. And this isn't likely to let up. Demand from game consoles and GPUs remains high. And the realities of wafer production mean that eight gigabit and 16 gigabit GDDR6 chips need separate allocations. So this crucial manufacturing capacity is split. The consoles use 16 gigabit chips while consumer GPUs currently use eight gigabit chips. And the majority of eight gigabit capacity is reportedly feeding Nvidia's lower end 30 series GPUs, which leaves very little on the bone for anyone else. Thankfully, the 6600 XT is going to be using 16 gigabit chips. So for this launch anyway, it's less of a concern. The final DRAM factor though is somewhat unexpected and it's servers. That's right. This whole thing is colliding with a big boom in server orders and servers, they need DRAM. Lots and lots of DRAM. And all of that is just the memory. Next up, we've got copper. You know that stuff that good heat sinks are made of, among other things? Well, copper's gone from a little under $2.20 per pound in mid 2020 to double that as of today. And a lot of that has to do with speculation that a global economic rebound will boost demand for metals used in manufacturing and in construction. If that sounds like it'll impact a lot more than copper, you're right. Aluminum prices are skyrocketing. They're up about 45% since this time last year. Steel and nickel are up nearly 30%, plastics are up 47%, and neodymium, which is used for magnets in fans and headphones, is up a staggering 88%. Even tin and lead, which make up solder, are up nearly 36 and 14% respectively. So all of that means that virtually every material that goes into producing a GPU, or really any consumer electronics, is significantly more expensive than it was just a year ago. With the sole exception being gold. Mm-mm-mm-mm. And the fun keeps coming if you're a US resident and the GPU that you want is made in China. Tariffs are famously misrepresented by politicians and enthusiasts alike. But the TLDR is, US consumers get to pay the US government between 10 to 25% more for electronics manufactured in China right now. Which, as of the end of 2020, has GPUs falling in that 25% bracket. There's no tariffs on merch from lttstore.com though. So buy a t-shirt like this one, and you'll be amazed how many fellow tech fans approach you to talk shop. It's actually kind of great. The final head of the GPU pricing hydrate is of course the silicon shortage itself. Now we can see from AMD and Nvidia's financial reporting that they've been telling the truth all along. Sort of. Like clearly they are producing plenty of GPUs. But even if we account for Nvidia taking on average 10% more profit margin than they did in 2015, both of them are experiencing clearly unprecedented levels of demand. And when demand goes up, pricing goes up. This shortage is affecting industries everywhere from electronics all the way to automobiles. And recent reports show that even Apple, who to date has seemed relatively insulated thanks to their careful production forecasting, is starting to feel the crunch. AMD's Dr. Lee Sisu said during an interview with Barron's that supply is expected to remain quite tight until 2022. And while AMD may be making inroads on supply, the silicon shortage as a whole is likely to continue well into next year thanks to the disruptions that COVID has caused in labor, logistics, and materials. Thankfully, Taiwan's worst drought on record did let up in late June, which should take some of the pressure off of TSMC, who happens to be the world's largest chip foundry. In other good news for consumers looking to buy a GPU, one of the major factors influencing demand for these processors, mining, has begun to wane in recent weeks, following crackdowns on crypto mining by the Chinese government. Since crypto's pricing began to fall in early May, GPUs have at least begun to experience a slow return to normal, as miners have begun fire-sailing GPUs in the Chinese market. Although pent-up demand from gamers means that prices are likely to remain high for the foreseeable future. That is, until we get a mainstream GPU that is shipping in serious enough volume to put enough cards in gamers' hands that it puts pricing pressure on the more premium ones. Get subscribed then, by the way, so you don't miss our review of the RX 6600 XT when it launches. It's based on AMD's Navi23 die, which should mean better yields per wafer, helping to chip away, pun intended, at the supply constraints. That is, assuming it ends up being a solid card. Now, at this point in the video, you might have noticed that I didn't ever offer an opinion on the state of the gaming GPU market. That's because, in my opinion, it doesn't matter what I think. That's the hottest take you're gonna get from me today. The unfortunate facts are that there is little that can be done about GPU pricing right now, but the good news is that once economic recovery efforts are in full swing, demand for raw materials should begin to fall off, and with any luck, we'll be able to live in a world where the fun comes back into PC building. You could try to accelerate the end of the ride by keeping your money in your pocket when the 6600 XT briefly hits store shelves, but truthfully, it probably won't change anything. Just like I never changed the segues to my sponsors. Not even to build Redux. Thanks, Redux, for sponsoring this video. Redux offers hardware with no markup pricing, so you pay only the $75 build fee and then whatever you already would have spent to get the parts. Plus, with Redux, you get a two-year warranty for the parts and labor on your expertly built PC. Use their online PC builder to customize what's going inside based on the games you wanna play and your budget, and that's it. It really is that simple. Redux wants to bring PC gaming to the masses, which is why they only charge a small build fee and they don't cut corners on quality. So click the link in the description to create your dream PC today. While you're down there, maybe check out our recent video on Nvidia actually discontinuing support for their Kepler GPUs and whether you really need to upgrade. It's kind of a strange sentence to say about a GPU that first launched nine years ago. Man, another nine years. You go back nine more years, that's GeForce 4. Isn't that crazy?