Zotac warns component shortages threaten the 'very survival' of GPU manufacturers and distributors — message to Korean customers suggests that the worst could be yet to come

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GPU vendors and distributors are feeling the AI pinch.

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Zotac, which manufactures some of the best graphics cards for gaming, has issued a stark warning about the consequences of the escalating memory shortage on its official online store in Korea, Zotac Korea TagTag Mall. The company warns that current conditions are "serious enough to raise concerns about the very survival of graphics card manufacturers and distributors going forward."

The original reason for Zotac's urgent message was to notify its Korean customers that the company had suspended its newly launched 2% cashback rewards program, but the company went on to discuss the state of the graphics card market more broadly. You can find a translation of Zotac's message, courtesy of Harukaze5719, embedded below. Click to expand the X post.

Zotac paints a grim picture of some graphics card models vanishing from shelves for an extended period in the near future. The company fears that it will be impractical to maintain a steady supply chain for GPUs other than those manufactured on Samsung's processes, which would only apply to remaining models from the RTX 30-series family. Adding salt to the wound, the company says the price of the silicon that's going to partners has skyrocketed to unreasonable levels.

The company uses the GeForce RTX 5090 and the GeForce RTX 5060 as prime examples of the outrageous price hikes. Consumers have already felt the ripples in the retail market over the last trimester. The GeForce RTX 5090, which could typically be found for around $2,500 in November 2025, now sells for $3,300 or even far more, a hike of at least 65%. Meanwhile, the same GeForce RTX 5060 that retailed for $300 around the same time has gone over $350, equivalent to a 17% increase.

Zotac claims it's doing its best to keep graphics card pricing as low as economically possible. The company's decision to axe its Korean rewards program, as insignificant as 2% may seem, could be a strategy to help maintain profit margins amid rising memory chip costs. But if the company's statements are accurate, further price hikes and supply shortages may be all but inevitable.

Zotac's existential worries may not be overstated, especially for graphics card partners that only sell GPUs from a single chipmaker. While many hardware companies have dipped their feet into other product categories, like motherboards, AIO liquid coolers, or gaming peripherals, not every company has diversified into these categories in recent years, and the sudden change in market conditions leaves little runway for adjustment.

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Zhiye Liu
Zhiye Liu
News Editor, RAM Reviewer & SSD Technician

Zhiye Liu is a news editor, memory reviewer, and SSD tester at Tom’s Hardware. Although he loves everything that’s hardware, he has a soft spot for CPUs, GPUs, and RAM.

13 Comments Comment from the forums
  • 80251
    So the problem isn't that the AI industry is buying up all GDDR6 and GDDR7 memory it's that the fabs are being monopolized to produce DDR5 memory?
    Zotac isn't still manufacturing RTX 3xxx videocards are they? The article seemed to suggest they were.
    Reply
  • Ar558
    This is exactly what the big Tech companies want. They want to kill the GPU market entirely. They can then force gamers to use Datacentre hosted gaming subscription services at higher prices. I expect minimum would be $30/month for basic ramping up to $200 for 4090 equivalent performance. This SAS model is what everything is becoming. Soon PC's will disappear entirely and they will become slave terminals requiring high speed broadband (prob minimum 100mbs but likely 300 for fully smooth service) and SAS for everything else. To get the same functionality as a current PC will likely require ~5 subs which will prob cost minimum $100/month but high end will be well over $300/month. It's all about extracting more from the consumer. Selling products isn't worth it for companies, they need you subscribed for life to make the big $.
    Reply
  • thestryker
    The PC hardware distribution chain has needed a shakeup for a long time, but the problem is that the companies getting squeezed the most are the ones who would have to do it which I think is why it hasn't happened. For the end user the concern is consolidation. It's not unimaginable that on the nvidia side MSI, Asus and Gigabyte are all that's left intact. PNY would be the other likely candidate due to their seemingly exclusive enterprise offerings. I'd expect to see some closures and/or consolidation if the bubble doesn't burst this year.

    The fact that the AIBs don't have a direct distribution method is part of why they've been crunched so hard despite the booms that have happened. This time there's a straight up shortage which is why distributors are at risk. During the last crypto boom for example the distributors saw plenty of profits as they could offload stock of less desirable things and raise prices on video cards at the same time. I'm not really sure what the current mess is going to end up looking like at the distribution level, but it's likely to be bad.
    Reply
  • bill001g
    Ar558 said:
    This is exactly what the big Tech companies want. They want to kill the GPU market entirely. They can then force gamers to use Datacentre hosted gaming subscription services at higher prices. I expect minimum would be $30/month for basic ramping up to $200 for 4090 equivalent performance.
    I never looked at how nvidia and other vendors actually offered their cloud based gaming so maybe I missed something.

    Sure they can run the game and render the frames at 4k and 60fps on the server. The big question is how do they get those frames sent to your house. The bandwidth between the video card and the monitor is massive. It is over 10gbit a second for just 60fps at 4k.

    The only way they do this is to massively compress the data. Netflix does this but they can take half a day to process a movie and reduce the compression loss. With games there is no time to do this.

    Does it really pay to use a 4090 to render a really good frame in a game and then discard 90% of the data.

    Be better off to just use a cheap card locally and render much lower images to begin with.

    What is more likely to happen if the majority of gamers can not afford GPU is the game companies put more effort into making a "fun" game rather than shinny eye candy. Many of the games I liked best had very average graphics and games that made a point of having fancy visuals I was disapointed with because most ran like garbage on release which distracted from the gameplay.
    Reply
  • Overtkill
    EVGA..... Ring any bells peeps?
    Reply
  • KennyRedSocks
    Ar558 said:
    This is exactly what the big Tech companies want. They want to kill the GPU market entirely.

    How will any of this kill integrated GPUs or are you suggesting that DRAM prices are supposed to do that?
    Reply
  • magbarn
    I'm sure the world would howl in protest if the US was somehow able to monopolize and buy 70% of the world's crude oil annual production and keep it to themselves. So why is one industry able to do the same thing? There should be regulation preventing one industry to basically completely corner the market. If this continues, there were be multiple bankruptcies as even down to PSU/Case manufacturers are going to feel this squeeze if majority of end users stop buying/upgrading due to insane ram shortages.
    Reply
  • JayGau
    bill001g said:
    I never looked at how nvidia and other vendors actually offered their cloud based gaming so maybe I missed something.

    Sure they can run the game and render the frames at 4k and 60fps on the server. The big question is how do they get those frames sent to your house. The bandwidth between the video card and the monitor is massive. It is over 10gbit a second for just 60fps at 4k.

    The only way they do this is to massively compress the data. Netflix does this but they can take half a day to process a movie and reduce the compression loss. With games there is no time to do this.

    Does it really pay to use a 4090 to render a really good frame in a game and then discard 90% of the data.

    Be better off to just use a cheap card locally and render much lower images to begin with.

    What is more likely to happen if the majority of gamers can not afford GPU is the game companies put more effort into making a "fun" game rather than shinny eye candy. Many of the games I liked best had very average graphics and games that made a point of having fancy visuals I was disapointed with because most ran like garbage on release which distracted from the gameplay.
    And how do you run those "fun" games without good graphics if there are no GPUs on the market, not even budget ones? If you mean iGPU-level graphics, it's the equivalent of going back to PS3-graphics level games. Otherwise, we still gonna have to pay insanely overpriced subscriptions to play bad looking games on Nvidia servers.

    If that happens I will likely have to find something else to do. I am now a relatively old man and playing video games needs to come with something else than just funny characters jumping on the screen. I need a show, something that has enough spectacular bling bling to keep me interested, like a good movie. Even though the story is top notch, if the game looks like it comes straight from 2006 I gonna have a very hard time to finish it.
    Reply
  • Darkbreeze
    Overtkill said:
    EVGA..... Ring any bells peeps?
    Nope. Never heard of them. Ever.

    But this is what I've been saying for a long while now. EVGA saw the writing on the wall long before anybody else did and said, nope, we're getting out while the gettin's good. And then got right the heck out of bed with Nvidia. And turns out, although it might have looked foolish at the time, they might very well have been prophetic in a way nobody expected.
    Reply
  • linx86
    Odd considering Zotac also got called out a few days ago for canceling orders due to a "pricing error." I bet we'll be seeing a lot more of those.
    Reply