AMD, one of the most important graphics and processor manufacturers, has publicly stated that their GPU sales coming from blockchain related applications has slowed down a bit. AMD Q3 financial reports show that blockchain and mining hardware sales are indeed falling. This conclusion was announced in the 2018 Financial Results Call, where they also announced a fall in revenue of 6% from Q2. This goes to remember that GPU mining is slowly fading away, with people not interested in this field.
AMD Q3 Financial Reports
AMD took a loss this quarter, maybe in every way possible. Truth, this is a financially poor period, but AMD and NVIDIA both were helped by the blockchain segment of their production to reach that extra mile ot break above or even; but that did not happen this quarter.
More so, blockchain related products did not help do this, and they hope this trend will continue in the next future. The AMD Q3 financial reports also show that other hardware mining companies like Bitmain can expect tough times ahead, because of the slowdown of hardware mining demand.
NVIDIA, the other big competitor in the graphics space, had already adjusted their financial expectations to this new reality, and his CEO Jen-Hsun Huang reaffirming that they were a gaming company first and not a mining hardware company.
Why Has Demand Slowed Down?
The demand of GPU’s for mining has slowed down recently due to two reasons: The decline in cryptocurrency prices in a bear market that has been here all year; and the fact that GPU’s are being slowly phased of for ASIC’s.
The first one is pretty easy to explain: mining profitability is going down due to a lack of performance of cryptocurrencies in the market. If there is no real profit to be made by mining, no new GPUs will be sold. This is unlikely to change in the near future. Bitcoin prices have gone down over 70% since last December.
The other factor is a little more complex. ASICs are specially designed chips that greatly improve the mining performance for a currency in specific. So while GPU’s are versatile and can mine lots of cryptocurrency algorithms, ASICs can handle just one algorithm but with an important gain in performance.
ASICs are being the preferred solutions for specialized and profit-oriented mining operations, because they offer the advantage in mining performance, at the expense of versatility. Maybe this will change next year with the new tariffs that the US government is applying to mining hardware, but this is uncertain at this point.