Nvidia Expects 2/3 Decrease in Crypto Mining Revenue Due to Bitmain’s ASIC Miners
The world’s largest GPU Manufacturer Nvidia has posted its financial report for the first quarter of 2018 on 10th of May. The revenue for Q1 totaled $3.21 billion and 9% of it is related to GPUs for cryptocurrency mining. As the rise of cryptocurrencies, the demand for Nvidia GPUs in the market place also grows which leads to a successful Q1 in terms of sales. However, Nvidia expects the sales related to crypto frenzy will decrease by 2/3 over the 2nd quarter as Bitmain has launched its ASIC miners.
“GPU business revenue was $2.77 billion, up 77 percent from a year earlier and up 12 percent sequentially, led by Gaming and Datacenter. Gaming revenue was up 68 percent from a year ago and down 1 percent sequentially. Gaming GPU growth was fueled by demand for the best experience while playing eSports, momentum of the Battle Royale genre, and AAA cinematic games… OEM sales included $289 million related to GPUs for cryptocurrency mining.”
According to the report, cryptocurrency generated profit account for 9% of Nvidia’s total sales, which is quite substantial in consideration to its worldwide impact. It was also the first time for Nvidia to indicate cryptocurrency related bussiness in their financial report. Jensen Huang, CEO of Nvidia, also acknowledged the cryptocurrency’s contribution to their business. He stated:
“Crypto miners bought a lot of our GPUs in the quarter and it drove prices up”.
In this instance, the short supply of GPUs and the current high prices have caused a lot of complain from the PC enthusiast community.
AMD, Nvidia’s main competitor has also made a lot of profit from crypto related business. Crypto mining represents 10% of the AMD total revenue in Q1 of 2018 which amounted to $1.67 billion. Like Nvidia, AMD also expects a decline in their mining revenue in the near future.
The expectations are far too optimistic, besides the volatility of bitcoin, ethereum and other cryptocurrencies, Bitmain also has big impact on the marketplace.
Bitmain has launched it ASIC Ethereum Antminer E3 last month. It shows Bitmain is expected to take a significant portion of chip-related market share. Bitmain’s announcement of 3 brand new ASIC miners which run on the Equihash, ETHhash, and Cryptonite algorithms have threatened the existence of the GPU mining industry. These ASICs are much more powerful compares to traditional GPU process in crypto mining.
In the meantime, Google’s TPU AI ASIC chips also reduce the market share of GPUs in AI area. It is understandable to see Nvidia reduce their expectations in cryptocurrency profits.