AMD Q4 2018 Results Show “Non-existent” Demand for Crypto Mining GPUs
American GPU manufacturing company AMD released their Q4 2018 financial results January 29, 2019; whilst the company recorded the best results in the past seven years, AMD expects their Q1 2019 figures to take a dip partly because of the near “non-existent” demand from cryptocurrency miners.
Sinking Demand Bites AMD
Courtesy of the continual decline in the price of cryptocurrencies observed throughout 2018, it seems that heydays for digital currency miners are nearing their end. What was once an extremely profitable side-gig can no longer even breakeven, and the same reflects in the financial reports of GPU manufacturing companies.
According to their Q4 2018 financial report, AMD missed their revenue target by $20 million. The firm hinted that a major contributing factor for the missed target might be the non-existent revenue from their crypto mining business segment.
Forecasting their revenue for Q1 2019, AMD noted they expect it to hover around the $1.25 billion mark, plus or minus $50 million. The firm substantiated on the lackluster sale of their blockchain-related GPUs, stating:
“The sequential decrease is expected to be primarily driven by continued softness in the graphics channel and seasonality across the business. The year-over-year decrease is expected to be primarily driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue and lower memory sales.”
It’s interesting to note that despite the below-par performance of their crypto-related business segment, AMD recorded one of the best performances in recent years. The company earned a total of $6.48 billion in revenue in 2018, which is almost 23 percent more than their revenue in 2017 (approx $5.25 billion).
Will Crypto Mining Reclaim its Sheen?
AMD’s disappointing GPU sales should hardly come as a surprise and additionally, the present forecast was foreshadowed by their Q3 2018 results, highlighted the plummeting sales of their cryptocurrency mining equipment.
In fact, AMD is not the only GPU manufacturing company bearing the onslaught of the bear-trodden crypto market. Rival firm Nvidia also reports less than encouraging results from their mining business.
Seeing the minimal demand for GPUs, Nvidia had to revise their forecasted revenue figure from $2.7 billion to $2.2 billion. This didn’t bode too well for their share as it tanked by almost 15 percent shortly after the announcement.