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In A Distorted Computer Component Market, Buying Is Better Than Building

A project log for Luggable PC Mark II

A PC chassis built around a 24" monitor and standard compact PC components, designed to be carried ("lugged") around.

RogerRoger 06/03/2018 at 19:360 Comments

The typical rule of thumb is that building your own computer from components is far cheaper than buying a prebuilt machine. Buying parts from Newegg.com, Amazon, Fry's Electronics, etc. results in a better machine for less money than getting something from Dell. This was certainly true when I embarked on the Luggable PC project but a few notable events have since occurred to make an exception to the rule.

The blockchain fad is the biggest disruption. Cryptocurrency miners' demand for graphics processors drove up their prices tremendously. At the beginning of my Luggable PC project, a NVIDIA 1060 card with 6 GB memory is considered a good mid-range GPU. (Or an entry-level unit for the more demanding world of virtual reality). A desktop 1060 video card was available for around $200 and I expected its price to drop as I designed and built my luggable PC. Instead, it spiked up to over $400 at times and is now hovering around $300.

The second disruption is in 3D-NAND flash memory. It is a big step change in price/performance so flash memory makers had no choice but to switch to 3D NAND technology or risk going out of business long-term. In the short-term, chip fabrication facilities have to be taken offline for this conversion, which meant a shortage of flash memory, 3D and otherwise, across the market. Driving up prices of solid state drives.

The third disruption is in DDR4 memory. There isn't as clearly a single factor here but manufacturing capacity seems to be lagging market demand over the past year or so. Right now, DDR4 memory is nearly double the price of similar capacity DDR3 memory when historically they should be closer to price parity at this stage of technology maturity.

There are a few other factors at play, but the short-term trend is clear: many computer components have risen in price over the past year, counter to the long-term historical trend of ever-cheaper electronics.

Computer manufacturers like Dell deal in large quantities, and therefore they buy through supply contracts whose prices are independent of day-to-day market disruption. The upside of this approach is that, in times of supply shortages, Dell pays far less for their parts than market price.

Today's example: a particular configuration of Dell Inspiron 15 7000 Gaming laptop is available for $750 after promotional discount codes. Let's look at the components and the current (approximate) market price for their desktop counterparts.

With these rough estimates, we're already up to $700 and we're still missing some major components necessary for a working computer.

That's $1000 to build a desktop or luggable PC with similar specs as this $750 Dell laptop. And while the screen might be physically larger, the whole computer definitely won't be as lightweight and portable. Such laptop-only traits - light weight, tight integration, ability to run on battery - usually demand a price premium over equivalent desktops.

But things are weird in a distorted market.

(Cross-posted to NewScrewdriver.com)

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