Likely some of both. Many of the costs are going to the supply-chain bottlenecks, IE: meat packing plants, lumber mills, container ports, chip manufacturers. Demand is high and it's hard for new supply to be brought online so those in the right position benefit significantly. For example AMD and NVDA revenue up 50%+, income 100%+
Eventually these high margins will attract competitors and bring down the margins but it takes quite awhile to get a chip fab up and running, and similar with meat-packing, lumber mills, etc.
>For example AMD and NVDA revenue up 50%+, income 100%+
Eventually these high margins will attract competitors and bring down the margins
For those examples that is false hope. You can't just spring up a new competitor in the GPU filed out of thin air and expect it to work; Nvidia and AMD duopolies are so far ahead into the game experience wise that no startup could ever catch up no matter how much money you throw at it (even AMD is having a hard time keeping up with Nvidia and they've been at it for 30 years).
Not to mention the insane patent minefield that protects them from competition. Even Intel, a trilion dollar company with experience, patents and fabs can't catch up with the other two.
It is, but performance/value remains to be seen, which brings me back to my point that even the Intel juggernaut faces un uphill battle in this space vs Nvidia and AMD.
Granted, during the current shortage, basically any GPU will sell regardless of performance/value proposition which makes it very easy for Intel to enter the market right now, however, 2-3 years ago, when Nvidia and AMD GPUs were affordable and available everywhere, nobody would have ever considered buying Intel discrete GPUs as even their integrated ones were not well received.
To the first question, both. Many developed countries that did not practice QE are also seeing rising inflation. Having said that inflation in the US is particularly high, but then again there’s historical precedent for that. So it’s a messy picture, but a large chunk of current inflation seems global and systemic.
As for where is the money going? The rising costs are due to increasing demand and simultaneous reductions in supply. A lot of pent up demand deferred by the pandemic has been released. Meanwhile suppliers have lost capacity due to shutting down factories, slimming down work forces and not maintaining or replacing equipment.
A lot of the money from increased costs is invested in ramping up production again. This is pulling people back into employment and kickstarting businesses that were suffering in the lockdowns. It’s funding necessary work. But some of it is being taken by suppliers who find they can ramp up prices and people will still pay.
The current price changes are due to a lack of supply, which the market is rationing.
Remember firms will always try to charge a fortune for their stuff. It's only competition that stops that happening. Competition is excess supply, or at least excess supply capacity.
When competition stops being effective, prices go up.
There is a shortage because the oil producers have realised they can ride the OPEC supply restrictions and make more money. US oil producers are not part of the cartel, but they might as well be. As always, someone does well out of inflation.
If the second one, there where is all that money going? Who is that "cost" that is benefiting?