GPU Makers are Worried about a Potential Drop in Miner Needs
A drop in the GPU demand could impact the AMD business model, according to the same company. This is what the hardware-makers shared with the public recently using its 10-K annual filing. AMD, as one of the biggest producers of graphics cards or GPUs, has seen a huge boost in business in recent months, just like all other major producers of these computer components. This spike was most evident in the Q3 and Q4 of 2017 when the spectacular rise of many cryptocurrencies attracted the attention of would-be miners.
While mining companies and dedicated mining pools use specialized mining rigs, most individuals who want to start mining cryptocurrencies go for so-called GPU racks. Using several or even dozens of graphics cards, a mining rack can be constructed and it can start hashing out digital currency for its operators. That is why the demand for GPUs was so high that some regions took up airplane deliveries, which is a much more transportation means, simply because the demand and urgency were so high.
The companies that create GPUs were taken back by this trend. AMD only suggested at the end of 2017 that its recent boost in sales could be correlated to the activities of crypto mining operations. Before that, AMD was hesitant to acknowledge that there might be a connection between their product and the crypto domain.
Now, in their 10-K, the company stated that the trend could easily change. According to their report, the crypto market is unstable and the current demand could quickly drop. The company also noted the recent regulatory moves and restrictions imposed by China and South Korea on the domestic crypto markets. That is why the company must manage the risks related to this market and make sure that any change in interest does not jeopardize the company’s stability.
Similar ideas are coming from Nvidia, one of AMD’s main rivals. That company also recently stated that the crypto influence on their sales is hard to quantify, but acknowledged that the volatility is not going to go anywhere anytime soon. Yet, in spite of the negative overtones, both companies have inadvertently accepted that the crypto market is making an impact on their businesses.