Ever since cryptocurrencies blew up at the end of 2017, GPU manufacturers like AMD and Nvidia have been enjoying massive sales revenue, thanks to cryptocurrency miners who purchase graphics cards for mining purposes.
However, ever since the cryptocurrency market crashed after reaching its peak of over $800 billion, we saw a similar decrease in the demand for GPUs, as the reward for miners is no longer as lucrative as it was before.
According to an AMD report, their total revenue for the first quarter of 2018 (Q1 2018) was $1.65 billion, with over 10% of that coming from sales to cryptocurrency miners. During its earnings conference call on Thursday, NVIDIA reported that it has recorded over $289 million in sales revenue to miners in the same timeframe – out of its total sales revenue of $3.21 billion.
Nvidia Chief Executive Officer Jensen Huang addressed the reason behind the unusually high sales revenue in a conference call.
“Crypto miners bought a lot of our GPUs in the quarter and it drove prices up. I think that a lot of gamers weren’t able to buy into the new GeForce as a result…The reason why they bought [GPU cards] is for gaming, but while they are not gaming; while they are at school, at work, or in bed — they will turn it on and do a little mining. There’s nothing wrong with that.”
However, both companies predict that the unprecedented sales record will drop significantly in the second quarter of 2018 – but not because of the cryptocurrency market slump.
Recently, Bitmain, the world’s largest application-specific integrated circuit (ASIC) miner manufacturer released a new product that would send all existing GPU miner manufacturers out of business. The Antminer E3, otherwise known as the ASIC miner for Ethereum, is the bigger, better and faster version of current GPU miners. Since Ethereum is the most frequently mined cryptocurrency, this new invention will most likely render slower GPU miners useless.
Nevertheless, AMD CEO Lisa Su views this incoming threat as something that is “healthy” for the company, as she realizes that ‘cryptocurrency mining’ is not the only use case for GPUs.
“I do think the blockchain infrastructure is here to stay. I think there are numerous currencies. There are numerous applications that are using the blockchain technology. We don’t see a significant risk of secondhand GPUs coming into the market. I think what you find is that, one, there are number of different currencies, and, two, a lot of these users that are buying GPUs these days are actually buying them for multiple use cases, both commercial and consumer.”
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