Major Chip Maker AMD’s Revenues Surge Due to Cryptocurrency Mining

JP Buntinx | April 27, 2018 | 10:04 am

Major Chip Maker AMD’s Revenues Surge Due to Cryptocurrency Mining

JP Buntinx | April 27, 2018 | 10:04 am

Cryptocurrency mining has been an interesting industry for AMD and NVIDIA. The former has noted a strong earnings increase, although they remain wary of this industry. Especially with all cryptocurrencies losing value, the manufacturer isn’t too concerned about the future demand for new GPUs. Putting Wall Street investors’ minds at ease is a top priority for the company right now.

AMD’s Position in the GPU Mining Industry

Last year and early 2018 have been rather profitable for GPU manufacturers. With a lot of consumers attempting to mine cryptocurrency, demand for graphics cards has soared .For companies such as AMD and NVIDIA, this created a rather unexpected windfall. With GPU sales through the roof in late 2017, both companies saw a positive end to the fiscal year. In Q of 2018, however, the cryptocurrency craze has quieted down quite a bit.

Due to this negative development, there were concerns regarding future successes for AMD. Wall Street investors expect demand for its GPUs to drop off spectacularly. That does not appear to be the case, even though there is still some reason for concern. Cryptocurrency miners may flood the market with second-hand graphics cards.  AMD chief executive Lisa Su is not too troubled by this prospect:

“We don’t see a significant risk of secondhand GPUs coming into the market. We do see a bit of volatility and that’s why we are putting into our forecast for the second quarter and the second half a little bit lower blockchain demand, but that’s more than made up for by the other new products and the way the new products are ramping in the business.”

Cryptocurrency Rebound can Result in More Demand

Even though the first quarter of 2018 wasn’t great for cryptocurrency, things are turning around. All prices are going up again this past week. GPU-mined currencies such as Ethereum have noted a strong increase over the past 30 days. If this trend remains in place, manufacturers such as AMD may see revenue from cryptocurrency miners increase once again.

During Q1 of 2018, cryptocurrency mining-related sales made up 10% of AMD’s revenue. That is not a small number, but also nothing spectacular. Even if the mining business would collapse entirely, AMD remains confident they can generate a higher profit in Q2 compared to the same quarter in 2017. The influx of second-hand GPUs has not materialized yet, although UBS warned investors about such an impending trend earlier this month.

For AMD, their future success doesn’t hinge on the cryptocurrency mining craze either. Its revenue forecast for Q2 2018 has been raised by company analysts, which is interesting to take note of. Which role cryptocurrency mining will play in those earnings, remains a bit unclear. AMD video cards are primarily sought after by gamers, and with new titles coming out this year, that demand will not slow down.

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  • CPUsAreHistory

    AMD is not about crypto mining and its profits come from CPU, GPU, APUs, servers, computing, cloud, gaming consoles, embedded, computing, etc.. Crypto mining is just a cherry int he pie, that Intel and other companies don’t have because they lack high-end gpus..

    AMD incoming large profits are coming form servers, cloud, etc., since AMD has starting to produce at large scale Epyc, etc..

    In addition, AMD is not starting to sell gpus to Intel so that it can replace Intel’s antiquated discrete gpus. All of Intel obsoleted gpus will have to be replaced, that is up to about 200 million gpus that Intel will have to buy from AMD since otherwise all of AMD APUs will wipe out Intel’s CPU with the old discrete gpus.

    AMD is now the largest gpu seller in the world, since it is not only powering all the game consoles with their Radeon brand, but Intel’s, OEMs, etc. Intel sold 70% of the gpus in the world (discrete only) and NVIDIA and AMD the other 30%, now AMD is and will be the abolsute highest seller of gpu in the world.

  • Reynaud Perret

    Very interesting your article. Honestly, I do not know much in the extraction of the virtual currencies there. I always limited myself to the trading of crypto currencies as I make currently it on the platform Stock-crypto. However, I find mining of crypto rather interesting. I would get more information from this subject before throwing me. Thank you.

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