During an earnings call, the Santa Clara, California-based chipmaker AMD revealed that graphics card sale to cryptocurrency miners declined during the quarter that ended in June. Apparently, there was a boom in sales of GPUs all across the world as miners prefer them for their computing abilities. AMD believes that this crypto-induced boom is over for the predictable future.
According to AMD’s Q2 report, Computing and Graphics division saw a fall in revenues in the second quarter by 3%. Total revenue, however, increased by 53% year-on-year, leading to the company stock value increasing by 5% after the announcement. The quarter-over-quarter decline is primarily related to lower revenue from GPU products.
In the first quarter, the sales of graphics cards to cryptocurrency miners accounted for around 10% of the total sales of the chipmaker. This happened as, in December 2017, Bitcoin’s prices shot to the moon. During this period, AMD’s market share in the GPU rose from 27.2% to 33.7%. In the month of September last year, the AMD Vega 56 cards were released but they sold within minutes on the high demand among cryptocurrency miners.
Yet, being heavily dependent on the miners did not turn out to be a good business strategy as the crypto-sector is filled with uncertainties, even though the rising demand resulted in increased revenues. Such challenges plague the crypto-sector and like the prices, demand had to be unstable too. In a US Securities and Exchange Filing earlier this year, AMD wrote that they must find ways to manage the risk related to decrease in demand for cryptocurrency mining, otherwise the GPU business could be adversely affected.
While the declining demand for GPU cards from cryptocurrency miners lead to tensions in AMD, the gamers take it as a boon though. This is because there was a shortage of GPU cards in the market when miners were right behind them. And it resulted in the prices becoming unaffordable for the gamers. For instance, AMD’s high-end OEM 4GB RX 580 GPU had risen to a price of $3,600 but now has fallen to $2,500.
The GPU business has certainly been affected due to the decreasing demand for GPUs. Hopefully, if cryptocurrencies shoot up like they did last year, the demand would surely increase once again.