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The End Of GPU Cryptocurrency Mining, For Now
Quote:Cryptocurrency prices continue their downward slide making them no longer viable to mine on GPUs. The value of Ethereum has dropped to USD 256, down from its historic high of $1,250 this January. Bitcoin fell to below $6,000 Wednesday, way down from its late-2017 high of $19,000. A 79 percent devaluation isn't the worst of Ethereum's problems. The currency is facing stiff inflation from conversions to other cryptocurrencies or the Dollar. At its peak, ETH held 32 percent of all cryptocurrency market cap, beaten only by BTC at 39 percent. Now ETH only makes 14 percent.
Quote:The GPU business made up the vast majority of Nvidia's revenue at $2.66 billion. The company said strong performance in its gaming, professional visualization, and data-center products made up for a "substantial decline" in cryptocurrency sales. Gaming revenue was up 52% from this time last year at $1.8 billion thanks to strong sales of Pascal cards for desktops and Max-Q notebooks. Professional visualization products brought in $281 million, 20% better than a year ago, and data center revenue reached $760 million, up 83% from a year ago. Those data center results came thanks to sales of Volta products like the Tesla V100 and the DGX systems containing them, according to the company.

The company's OEM and IP bucket leaked 54% of the revenue it posted this time last year, down to $116 million, thanks to declines in demand from cryptocurrency miners for the green team's GPUs. The sequential drop of 70% in this line item underscores just how much crypto demand has faltered of late. Nvidia notes that it had predicted crypto-specific demand would be $100 million for this quarter, while actual revenues were $18 million. Furthermore, the company expects no meaningful contributions from cryptocurrency products to revenue for the remainder of its fiscal 2019. If there's a surer sign that enthusiasm for new mining power is dead, I'm not sure we'll find it.
Quote:The price boom of 2017 through early 2018 brought a lot of new miners into the market, and they all needed hardware to generate new coins. Thus, the law of supply and demand took over to wreck GPU prices. You were lucky to see cards selling for less than double MSRP. Now, Nvidia says revenue from selling to crypto miners has dropped substantially to just $18 million. In the first quarter of the year, Nvidia reported $289 million in revenue from “crypto-specific GPUs.”

The company doesn’t foresee another major uptick in mining, either. It projects sales to cryptocurrency miners will remain “negligible” going forward. Nvidia has adjusted its plans to compensate for that, too. It expected crypto would remain a large part of its sales before the bottom dropped out of the market. It had projected about $100 million in crypto-related revenue for the quarter.
Quote:However, now, we're seeing something that wasn't seen for a long time: actual decent pricing in graphics cards. It's still a process, but in that process, this Gigabyte AORUS RX 580 deal at Amazon is the proverbial pin in a haystack.

The Gigabyte AORUS Radeon RX 580 8GB (GV-RX580AORUS-8GD) is available now from Amazon for $209.99 (after a $20 mail-in rebate). If you're in the states and looking for a graphics card that guarantees 1080p performance at max settings, or a decent 1440p experience with somewhat reduced IQ, this could be the graphics card for you - and judging by its Best Seller status, it may very well be the same for many other customers. And for now, there's even stock - how about that. If you're shopping from outside the states and still find this deal mesmerizing (here in Portugal a similar graphics card would go for $410 so... yeah. Take the deal). Here's hoping this is a sign of the incoming times, and not just a freak event.
Quote:According to Jon Peddie Research, overall desktop GPU shipments have fallen by 16% YoY - a not unexpected turn of events considering the state of the crypto mining boom then and now (where it's virtually absent). The YoY change means that production volumes planned during the mining boom are now above and beyond the channel's capability to move them through user demand, hence the diminishing prices in graphics cards (aided by the dump of mining-bought graphics cards in the second-hand markets).

Overall, GPU shipments still increased by 10.64% compared to last quarter in the overall market, fueled mostly by Intel - AMD shipments increased 6.5% Nvidia increased 4.3% and Intel increased 13.1% compared to their own previous shipment quotas. Still, AMD's market share from last quarter decreased -0.6%, Intel's increased 1.5%, and Nvidia's market share decreased -0.97%. JPR also cites the US's additional tax on China imported goods, as well as descending stock market values as reasons for consumers (both singular and business) to be holding off on purchases.
Quote:While we've known for some time that the crypto bust left AMD and Nvidia with an excess amount of GPUs, the Jon Peddie Research group says this will continue on for almost half a year (up to this summer).
For consumers, however, this is all very good news. Most people shopping for new PC parts have probably noticed how low prices are for last-gen GPUs, especially in the mid-range. You can buy GTX 1060s and RX 580s comfortably within the low-$200 range, or even cheaper sometimes, and RX 570s are going for the mid-$100s during seemingly regular sales.
Quote:The Q2 2018 decline was large, but didn’t necessarily worry investors since crypto was a known bubble, and the yearly sales reports for the entire market still showed a small net increase relative to Q2 2017. In retrospect, this wasn’t a return to business-as-usual, but the beginning of a mammoth crypto hangover.

Sales fell further in Q3 and Q4, despite the fact that Q3 typically shows the strongest gains relative to Q2 in the normal seasonal cycle. According to Jon Peddie, sales in a typical Q3 period rise by an average of 14.9 percent. Last year, they fell 19.2 percent instead. Typical Q4 seasonality predicts a decline of 2.3 percent, not the 10.7 percent that actually occurred.

If you chart the full two years of declines, the GPU market at the end of Q4 2018 was roughly 71 percent the size it was in Q4 2016. The cryptocurrency hangover is substantial. The really ugly thing about these figures is that the GPU market for older cards — even brand-new cards — was actually excellent in Q4 2018, particularly if you were in the market for an AMD RX 570 or RX 580. Nvidia’s GTX 1060, 1070, and 1080 cards were also very good deals at multiple points. Despite this, Q4 2018 sales slumped hard.

In its last conference call, Nvidia stated it believes its GPU business decline will bottom out in Q1 and improve thereafter. We’ve seen some analyst predictions that the recovery and massive inventory correction will continue into Q2 before potentially improving in the back half of the year.
Quote:According to DigiTimes, NVIDIA and AMD partners are doing their best to digest unsold graphics card inventory via promotions and discounts. The idea here is that they can achieve increased amounts of revenue and move a lot of the graphics card stock they accumulated following (and counting on) the crypto craze. This move will certainly affect their bottom line when it comes to profits, but that's just what these companies have to do. Hardware sold at a tiny profit is always better than that which stays in the warehouse simply deprecating, and these companies know it best.

DigiTimes cites the example of MAD-partner TUL corporation which manages the PowerColor brand, saying that they achieved, via promotions, an increase of 115% in revenues on January (over their December values). This increase in revenue still compares negatively YoY, where it's still 85.7% lower compared to January 2018. And despite the increase revenue, profits declined to the red: the company had net losses of NT$10.31 million in January 2019 and EPS of negative NT$0.31. Some hard times could be coming for AIB partners, who will have to bite the bullet on pricing to move their stockpiles of older generation graphics cards.

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