Skip to main content

Nvidia, AMD and Intel could be 'lured into' dire chip shortage overcompensations

Investing in GPU stocks may be a bit of a trap
(Image credit: Pixabay - CorrieMiracle)

With the pandemic having sent the world into a tech buying frenzy, the chips inside our PC components have all but passed into myth. And as manufacturers scramble to fill the gap in supply, Jon Peddie Research has issued a warning about the dangers of overcompensation.

“The risk," says Peddie, "is that semiconductor suppliers will be lured into over-reaction and believe that suddenly 100s of millions of new users have appeared and the demand will stay high. That’s not only not realistic, it’s also not true—where are they coming from—not this planet?”

This may be a pessimistic outlook, but it is grounded in experience.

While this may be the first time a global pandemic has impacted a chip shortage, it's not the first time we've seen an overreaction to increased demand. Back in 2018 we witnessed Nvidia stock (among others) plummet due to sales falling short of expectation and a crash in cryptocurrency-related GPU sales.

Race on

Best racing wheels

(Image credit: Future)

Best PC racing wheels : perfect for any circuit.
Best VR headset: which set is right for trackdays?

Now, we're just coming out of a similar spike—this time thanks to a host of intermingling factors that toppled the market to form the tragic state of PC building we're in today—and investors are all aflutter in the fallout.

But Jon Peddie and company are convinced that pandering to the increased demand is a bit of a trap. Nvidia and AMD certainly appear to be a little more hesitant to throw their lot in with cryptocurrency demand than they once were, so perhaps they're already well-aware of the potential dangers ahead.

Katie is a confessed logophile with a love of metaphor and an insatiable creative urge. She's also an RPG, sim and survival game enthusiast who harbours an overt disdain for MMOs, un-managed cables and software that doesn't include a dark mode.