Overview
- GPUs Are in High Demand – Used for gaming, AI, and crypto, but production can't easily scale up.
- Factories Are Expensive – Building a chip fab costs billions and takes years.
- Limited Equipment & Workers – Only ASML makes key machines, and skilled workers are scarce.
- Overproduction Risks – Too many factories could struggle if demand drops.
- Profit Priorities – AI chips are more profitable, so gaming GPUs get less focus.
- Geopolitical Factors – Chip production is concentrated in few countries, affecting supply.
GPUs are in high demand, whether for gaming, AI research, or cryptocurrency mining. But if so many people want them, why aren’t companies just making more? The answer isn’t as simple as just building more factories. There are major challenges that make increasing GPU production difficult.
{tocify} $title={Table of Contents}
Building a Factory Costs Billions
A factory that makes advanced computer chips, called a "fab", isn’t like a regular manufacturing plant. These facilities need to be extremely clean, use advanced machinery, and follow precise processes.
Setting up one fab can cost tens of billions of dollars and take years to complete. Even once it’s built, making it run smoothly is another challenge.
Limited Equipment and Skilled Workers
Even if a company wants to build a new fab, it needs special machines to make chips. ASML, a Dutch company, is currently the only one in the world that makes the high-tech Extreme Ultraviolet (EUV) lithography machines needed for advanced chip production. However, ASML can only produce a limited number per year, limiting the number of fabs that can be built.
On top of that, these factories require highly trained workers, and there aren’t enough of them to scale up production quickly, especially in regions where this kind of expertise is less common.
Too Many Factories Could Lead to Problems
The demand for GPUs isn’t always high. If companies build too many factories, they might struggle to keep them profitable when demand drops. This is why businesses are cautious about expanding too quickly.
Companies Prioritize Profits
Even though gaming GPUs are popular, they aren’t the most profitable product for manufacturers. AI-focused chips and other high-performance computing products bring in much more money. Because of this, companies choose to produce the most profitable chips first, limiting the number of gaming GPUs available.
Geopolitics Affects Chip Production
Most of the world’s advanced chips are made in a small number of countries. Because of this, international politics can impact supply. Some countries are investing in building new fabs, but it will take years before they can match current production leaders.
Conclusion
GPUs are expensive and difficult to produce, and there are many reasons why companies can’t simply make more. The high costs, limited resources, business priorities, and global politics all play a role in keeping supply limited. While more fabs are being built, it will take time before they have a big impact on the availability of GPUs.
Source: Reddit
Read also: Why Are GPUs Much Bigger Than CPUs