DEFINITION of 'Graphics Processing Unit (GPU)'

A  Graphics Processing Unit (GPU) is a chip or electronic circuit capable of rendering graphics for display on an electronic device. The GPU was introduced to the wider market in 1999, and is best known for its use in providing the smooth graphics that consumers expect in modern videos and games.

BREAKING DOWN 'Graphics Processing Unit (GPU)'

The graphics in videos and games consist of polygonal coordinates that are converted into bitmaps – a process called “rendering” - and then into signals that are shown on a screen. This conversion requires the Graphics Processing Unit (GPU) to have a lot of processing power, which also makes GPUs useful in machine learning, artificial intelligence, and other tasks that require large number of complex and sophisticated computations.

Before the arrival of GPUs in the late 1990s, graphic rendering was handled by the Central Processing Unit (CPU). When used in conjunction with a CPU, a GPU can increase computer performance by taking on some computationally-intensive functions, such as rendering, from the CPU. This accelerates how quickly applications can process, since the GPU can perform many calculations simultaneously. This shift also allowed for the development of more advanced and resource-intensive software.

Processing data in a GPU or a Central Processing Unit (CPU) is handled by cores. The more cores a processing unit has, the faster (and potentially more efficiently) a computer can complete tasks. GPUs use thousands of cores to process tasks in parallel. The parallel structure of the GPU is different than that of the CPU, which uses fewer cores to process tasks sequentially. A CPU can perform calculations faster than a GPU, which makes it better at basic tasks.

The term “GPU” is often used interchangeably with “graphics card,” though the two are different. A graphics card is a piece of hardware that contains one or more GPUs, a daughterboard, and other electronic components that allow the graphics card to function.

A GPU can, however, be integrated into the motherboard or be found in the daughterboard of a graphics card. Initially, high-end computers were the only ones to feature graphics cards. Today, most desktop computers typically use a separate graphics card with a GPU for increased performance, rather than rely on a GPU built into a motherboard.

While GPUs were initially popular with video editing and computer gaming enthusiasts, the rapid growth of cryptocurrencies created a new market. This is because cryptocurrency mining requires thousands of calculations in order to add transactions to a blockchain, which is something that could be profitable with access to a GPU and an inexpensive supply of electricity.

In recent years, two prominent graphics cards manufacturers, Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD), have experienced a rapid increase in sales and revenue as a result of cryptocurrency mining.

This had the side effect of frustrating non-mining customers, who saw prices increase and supplies dry up. As a result, retailers occasionally limited the number of graphics cards that an individual could purchase. While miners of the more popular cryptocurrencies, such as bitcoin, have shifted to using specialized and more cost-effective chipsets called application-specific integrated circuits (ASICs), Graphics Processing Units are still used to mine lesser-known currencies.

  1. National Diamond

    A theory of competitive advantage developed by Harvard Business ...
  2. Bitcoin Mining

    Bitcoin mining is the process by which transactions are verified ...
  3. Logo

    A graphical mark used to identify a company, organization, product ...
  4. Integrated Circuit Card

    An integrated circuit card is a type of payment or identification ...
  5. Chip Card

    Also known as a smart card or memory card. A chip card is a plastic ...
  6. Bank Card Association

    An organization owned by financial institutions that licenses ...
Related Articles
  1. Tech

    Ether Mining Boom Causes Graphics Card Shortage in Germany

    A Germany-wide shortage in powerful graphics cards is due to rapid increase in the number of cryptocurrency mining rigs.
  2. Tech

    NVIDIA CEO Believes Cryptocurrencies Have Longevity

    Nvidia has benefited from the spike in cryptocurrency mining over the past several months.
  3. Investing

    NVIDIA Up 88%, But Still Room for a Rally: Mizuho

    Analyst Vijay Rakesh thinks NVDA shares can still appreciate another 12%.
  4. Insights

    How Long Can Cryptocurrency Mining Power Chip Makers?

    It’s important to note that a similar surge in demand was witnessed in 2013.
  5. Investing

    NVIDIA Wants Retailers to Favor Gamers Over Miners

    NVIDIA is asking retailers to limit sales of its graphics cards to cryptocurrency miners.
  6. Investing

    Can AMD Regain GPU Market Share From NVIDIA?

    In the past few years, NVIDIA (NASDAQ: NVDA) has taken a dominant lead in the market for stand-alone "discrete" GPUs over Advanced Micro Devices (NASDAQ: AMD), its only major competitor. However, ...
  7. Insights

    AMD versus Nvidia: Who Dominates GPUs?

    A look at AMD and Nvidia, focusing on their latest GPU technology, and what is in store in the future.
  8. Investing

    AMD, NVIDIA: Bitcoin Run Could Be Short Lived

    AMD and NVIDIA's shares have been surging thanks to demand for bitcoins but that may end as the speculative market becomes less profitable.
  9. Tech

    How Nvidia Makes Money (NVDA)

    The stock of Nvidia Corporation rocketed to the record high of over $220 per share this month. This is how the company makes money.
  10. Investing

    AMD Tanks on Forecasts of 1st Revenue Drop in 7 Qs

    Despite AMD beating estimates for Q3 earnings, investors worry about AMD's reliance on GPU sales.
  1. What are the main types of chips produced by semiconductor companies?

    Learn about two ways in which chips in semiconductors industry are categorized: by functionality and by type of integrated ... Read Answer >>
  2. Why would an investor consider purchasing electronic stocks for their portfolio?

    Discover why an investor would consider buying electronics securities as part of an investment portfolio and which stocks ... Read Answer >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center