Tuesday, March 13th 2018
NVIDIA Bracing for a Cryptocurrency Demand Drop
In what could bring cheers to PC gamers, and tears to miners, NVIDIA is reportedly wary of a possible drop in cryptocurrencies through 2018. This directly affects the company, since GPUs are used in mining various cryptocurrencies, which triggered inflation in prices of graphics cards from Q2-2017 to Q1-2018. Over the past couple of weeks, prices of popular high-end GPUs such as the GeForce GTX 1080 Ti have cooled, although not back to their original levels. NVIDIA's manufacturing division, which sub-contracts silicon fabrication to TSMC, is calculating the impact a cryptocurrency slump could have on its supply-chain, and are being conservative with their orders to the foundry. A drop in demand could leave the company with vast amounts of unsold inventories based on an old-generation architecture (Pascal, in the wake of Volta/Ampere), which could result in multi-billion-dollar inventory write-offs. According to a Digitimes report, NVIDIA has placed restrictions on its add-in card (AIC) partners on marketing cryptocurrency mining abilities of their graphics cards, and selling directly to large miners.
In addition to a slump in demand for cryptocurrencies, 2018 could see introduction of purpose-built crypto-mining ASICs that are tailored for popular cryptocurrencies. Purpose-built ASICs tend to be extremely economical for medium-thru-large scale miners, in comparison to GPUs. The third horseman is policy. While several governments around the world have developed an appreciation for blockchain technology for its resilience to tampering, fraud, and data-theft (which could be implemented in safekeeping government- and bank-records); governments are, understandably, anti-cryptocurrency, as it undermines sovereign legal tender issued by central banks, and aids tax-evasion. Several governments through 2017-18 have announced measures to crack down on cryptocurrency mining and use as tender. This has led to a further drop in public interest in cryptocurrencies, as large ICO investors are weary of losing money in a highly volatile market. Close to half the ICOs have failed.
Source:
DigiTimes
In addition to a slump in demand for cryptocurrencies, 2018 could see introduction of purpose-built crypto-mining ASICs that are tailored for popular cryptocurrencies. Purpose-built ASICs tend to be extremely economical for medium-thru-large scale miners, in comparison to GPUs. The third horseman is policy. While several governments around the world have developed an appreciation for blockchain technology for its resilience to tampering, fraud, and data-theft (which could be implemented in safekeeping government- and bank-records); governments are, understandably, anti-cryptocurrency, as it undermines sovereign legal tender issued by central banks, and aids tax-evasion. Several governments through 2017-18 have announced measures to crack down on cryptocurrency mining and use as tender. This has led to a further drop in public interest in cryptocurrencies, as large ICO investors are weary of losing money in a highly volatile market. Close to half the ICOs have failed.
38 Comments on NVIDIA Bracing for a Cryptocurrency Demand Drop
(And even then, should cost less, given that TITAN exists and that is truly high-end besides 2-3 years in the market now)
dreamer ...
a 1080 maybe but i can't see a 1080Ti going down to 500€ from 1200+ .... 700 maybe (that would still be a drop close to -50% but ... i doubt the retailer and e-tailer will follow )
good point ... i can resell my 1070 100$ above what i paid for it and still be 100$ under the max retail price ... (not that i need to...)luuucky .... even the cheapest 1080Ti was above 800€ for me :D (and before F'Mining craze too )
looks like nvidia do enjoy these "new gpu prices".... and even when gtx 1080 ti dropped from 1200$ to 999$ makes nvida to start worrying, nvidia want their 1200$ price tag back and solid!
I think that miners will NOT panic anytime soon (so NO mass gpu drops in second hand market), because most minesrs have what is called a "crystall ball" - they are almost certain that cryptos will make +100% from current USD price levels (back when ETH was 1300$ and BTC 20k$) - so even if minig will start to be unprofitable in next 4-8weeks (that is if prices do not rise) - they still will mine wait for that 100% price rise, because it happened once and many of them made good profit then - they just cant forget that. Who can guess for how many months miners can live like this (paying real $ for electricity accumulating much less valueable cryptos and not trading for $ anny of those) and waiting for that +100%.
But bottom line is nvida wants its gtx 1080 ti 1200$ price tag back and now!
my eth mining profit has dropped by around %75 over the last six weeks.. this seems to be a trend..
my current thoughts go along the lines of.. i should strip down my 8 x 1070 mining machine and flog the cards on ebay while they are still worth something..
gpu mining is still just profitable.. if the current downward trend continues it soon wont be.. "if" this point is reached and i say "if".. gpus on ebay will be worth two a penny..
i.. in a small way have a decision to make just like nvidia does.. for me its a hard one.. for the likes of nvidia i assume its more so.. nether of us wants to end up with a load of worthless gpus..
trog
And those millions of ex-mining cards will flood the market (refubrished, recertified, with new boxes, OEM) for sure. This might be huge hit for both companies, since they wont be able to sell anything.
Cryptomarket is milked by bots and big players, leaving less and less money.
to me the only thing that will save the day will a huge rise in crypto prices.. this is the big unknown..
trog
High prices more likely than not do not feed back to AMD/Nvidia too well. AIBs and resellers are in the position to benefit more from current price hike.
They are worried about both excess inventory if mining market should suddenly drop away as well as massive influx of previous generation cards being flooded to 2nd hand market that will compete with the new generation.
steemit.com/technology/@cloh76/bitmain-to-release-ethereum-asic-miner-the-antminer-f3
GPU based mining rigs are not even close.
For NVIDIA ... that might be an issue.
They also have a much larger war chest and credit limit, whereas AMD is stretched rather thin. I'd be more worried about AMD honestly. Although with ryzen doing so well, I doubt either will have issues. They are probably more worried about the write off if they were to overproduce their current cards.Nvidia does not benefit if a 1080ti sells for $1000 or $1200. The AIB and reseller do. Nvidia charges the same rate per chip regardless.
There are a number of different points that could potentially be a problem for PC gamers looking for GPUs at or near MSRP.
Firstly we are seeing nVIdia and potentially AMD having to predict what an inherently unpredictable market such as crypto will be doing when considering manufacturing numbers. If they guess wrong there is a surplus or even worse of a supply deficit.
Since both nVidia and AMD are FABless they rely on companies like TSMC. However, TSMC also manufacture ASIC. Even if nVidia and AMD don't grossly under or over estimate their manufacturing needs they may have to compete with increased demand for ASIC if or when miners move to ASIC from GPU mining. If ASIC demand becomes to high it could effect supply of nVidia and AMD GPUs.
Companies commissioning ASIC manufacture from TSMC may also be willing to pay more which could make TSMC prioritize ASIC over other companies needs.
So there are a lot of ways that GPU prices could remain high even if all the crypto miners stop buying up all the nVIdia / AMD stock.
The sky is falling,....
we are totally F@#ked,......
At least some people got rich off it while it lasted. Good riddance to the beanie baby moneys.