According to a quarterly financial report, AMD, a semiconducter and hardware manufacturer company, saw ‘negligible’ sales of GPUs in the last financial quarter, and predicts equivalently low sales figures for Q3, demonstrating that crypto miners are not buying AMDs GPUs anymore.
The last quarterly report indicated that around 6% of its revenue came from crypto sales, down from 10% the previous quarter. Predictably, the subsequent quarter shows lower crypto revenue, indicating that crypto miners are no longer buying GPUs- or at least are definitely not buying GPUs from AMD.
Crypto in 3Q18/4Q is almost zero, so that’s been cleansed going forward. You can do some estimates yourself looking at hash rate increases and dividing hash rate / GPU to get $s spent. But that’s spent at retail, and many times AMD/NVDA only recognize the silicon chip revenue
— cyw60 (@cyw60) October 27, 2018
There are a number of reasons for the downtrend- not only are ASICs and specialized mining hardware increasingly the only way to profitably mine cryptocurrency, but mining in general has recently seen lowered rewards, as miner saturation increases and block rewards are decreased- not to mention that crypto value at large is down from its peak two years ago when the mining craze kicked off.
The report directly attributes the consistent ‘quarter-over-quarter decline was due to significantly lower graphics revenue driven by high channel inventory.’ In other words, the cost of manufacturing GPUs was not largely offset by eventual sales.
AMD had excessive inventory from crypto that needs to be worked through which Jensen guided to zero already. Gotta see how ray tracing unfolds before throwing it away...
— Nuss_Banger (@Nuss_Banger) October 27, 2018
This implies that AMD currently has an overstock of GPUs, and while they made a slight profit on them, the lowered revenue indicates that they aren’t being sold as quickly as their being made. With this in mind, if AMD lowers their manufacturing output, they can still make profits even with lowering sales volume.
Nonetheless, the sales report tells a story of the mining craze cooling- either miners are slowing down, turning exclusively to ASIC based mining, or mining is seeing a temporary lull. Watching the sales of GPUs and ASICs is a telltale indicator of interest in mining, which can have significant predictive power over the supply-and-demand ebbs and flows of various cryptotokens.
Overall the figures also reflect the centralization of mining power. ASICs are cost prohibitive to most miners, and GPUs, which are affordable to even hobbyists are decreasingly competitive to the more powerful ASIC rigs. Many have expressed concerns over the trend towards ASIC dominance, like Martin Holst Swende who wants to effectively put an end to ASIC mining on the Ethereum blockchain.
Just had a very productive chat with @OhGodAGirl about ProgPOW. I'm now pretty convinced it achieves its goals of being resistant to performance gains on fixed function hardware (ASICs etc), and that we should adopt it for Ethereum.
— Nick 'delegatecall me maybe' Johnson (@nicksdjohnson) September 19, 2018
Looking at AMD’s report, GPU is currently a ways away from being truly competitive with ASIC rigs, but efforts to make changes in the way blockchains reward mining which would disincentivize the advantages ASIC mining has over GPU mining could reverse this trend, which would not only be a boon for AMD’s GPU sales, but could reverse crypto’s trend towards centralization and the dominance of blockchains by corporate mining pools.
Read more: Mining competitor to Bitmain launches next gen miners, Mining Ethereum is unprofitable right now, but this could lead to a price rally
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