Chinese New Year Along With Litecoin Mining Contributed to AMD Graphics Card Scarcity

The Chinese New Year and increased altcoin mining were the prime reasons for the recent scarcity and higher prices for graphics cards made by Advanced Micro Devices, according to the company.

The US semiconductor giant confirmed the reasons for the price rise to tech blog Digital Trends.

Prices for graphics cards based on AMD's Radeon R9 290X graphics processing unit (GPU) are being sold for more than $700 (£420, €510), up from its launch prices at about $500. The R9 290X cards were virtually out of stock a few days ago.

SuperBiiz is selling the Sapphire AMD Radeon R9 290X 4GB card for $739.99, while the MSI Radeon R9 290X card is selling for $710, according to Digital Trends.

Even though these manufacturers are pricing their products independently, they usually follow the pricing models set by AMD.

Chinese New Year Amid High Demand

During the two-week long holiday in China that began on 31 January, the facilities that make AMD cards were essentially shut down, wreaking "havoc on supplies" of cards such as the Radeon R9 290X, the company told Digital Trends.

Most of the companies that make graphics cards based on AMD GPUs such as Sapphire, XFX, ASUS, MSI are based in Taiwan and China and their manufacturing facilities are also located there due to cheap labour and material costs.

The factory shutdown due to the holiday was amid high demand for the cards from miners of altcoins such as litecoin.

Litecoin, like Bitcoin, is a cryptocurrency. Litecoin is inspired by and technically nearly identical to Bitcoin. It confirms transactions faster, every 2.5 minutes, rather than every 10 minutes for Bitcoin.

It is mined by using GPUs, which are rarely used for bitcoin mining. At present, bitcoins are primarily mined by using application-specific integrated circuits (ASICs), which are customised for particular uses.

The increased demand by litecoin miners has emptied the shelves of AMD's Radeon hardware, which is used to build mining platforms. The increase in prices has happened despite GPU-based Litecoin mining becoming more difficult due to the ever-increasing number of miners in the field.

AMD added that the supply stream continued since the celebrations concluded.