NVIDIA Bracing for a Cryptocurrency Demand Drop

[btarunr]

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.



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[Chaitanya]

John Oliver covered this ponzi scam of Crypto currency on last episode of Last week tonight nicely. While it would be great for gamers to find GPUs at cheaper prices it certainly would hurt bottomline for gpu makers and a good chance investors would be angry.

 

[_JP_]

Not really seeing the problem with said slump if it makes the 1080Ti cost around 500€, being a sane price for high-end.
(And even then, should cost less, given that TITAN exists and that is truly high-end besides 2-3 years in the market now)

 

[RejZoR]

GTX 1080Ti will never be 500€. It wasn't before the crypto insanity and won't be after it. 700€ though, that is what it should cost. I paid 799€ for mine, but it's one of the beefiest aftermarket ones so I know why I paid so much for it. I got it just before the crypto nonsense totally blew up.

 

[GreiverBlade]

if it makes the 1080Ti cost around 500€, being a sane price for high-end.

ouch.... i should feel sad to have paid around that price for a 1070 (and that was before mining craze ... now they are around 600-700€) but oh well ... MSRP is a unicorn where i live ... 379$ MSRP while the F[ool]E[dition] is 449$? AH! what a joke...

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...)

I paid 799€ for mine, but it's one of the beefiest aftermarket ones so I know why I paid so much for it. I got it just before the crypto nonsense totally blew up.

luuucky .... even the cheapest 1080Ti was above 800€ for me (and before F'Mining craze too )

 

[techy1]

"Over the past couple of weeks, prices of popular high-end GPUs such as the GeForce GTX 1080 Ti have cooled"
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!

 

[trog100]

i have an 8 x 1070 dedicated mining machine.. i like to think i know a little about the crypto scene..

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

 

[W1zzard]

i have an 8 x 1070 dedicated mining machine.. i like to think i know a little about the crypto scene..

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

great input. what are your thoughts on switching to other currencies? or waiting for new ones to emerge?

 

[arroyo]

I think AMD and NVIDIA started to fear about 2018. They both had crazy profitable year 2017, but cryptomining end was just a matter of time.

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.

 

[R00kie]

That photo in the article is painful to look at...

 

[trog100]

great input. what are your thoughts on switching to other currencies? or waiting for new ones to emerge?

not good.. i think if eth which is currently the most profitable thing to mine ceases to be profitable there will be a mad scramble for something else which is profitable.. the mad scramble wont be very successful..

to me the only thing that will save the day will a huge rise in crypto prices.. this is the big unknown..

trog

 

[Liviu Cojocaru]

I can see the SH GPU market flooded with cheap cards in a few months time

 

[londiste]

"Over the past couple of weeks, prices of popular high-end GPUs such as the GeForce GTX 1080 Ti have cooled"
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 am willing to bet that this is patently not the case.
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.

 

[Gasaraki]

Any smart company will do this, they can't bank on crypto being popular to feed their bottom line.

 

[Fabio]

not good.. i think if eth which is currently the most profitable thing to mine ceases to be profitable there will be a mad scramble for something else which is profitable.. the mad scramble wont be very successful..

to me the only thing that will save the day will a huge rise in crypto prices.. this is the big unknown..

trog

yes, but to see a huge spike in price , also for crypto , it take some time, and before that new cards can came, asic can came, and your actual hw will wort less than nothing. So, if you want to sell to gamers, you have to done realy soon as nwe gpu will arrive relatively soon

 

[arroyo]

This is what will be the end of GPU mining (220 Mhash, 800W, 3000$):
https://steemit.com/technology/@cloh76/bitmain-to-release-ethereum-asic-miner-the-antminer-f3
GPU based mining rigs are not even close.

 

[Imsochobo]

I think AMD and NVIDIA started to fear about 2018. They both had crazy profitable year 2017, but cryptomining end was just a matter of time.

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.

I doubt it has a major impact for them at all.

 

[Fabio]

This is what will be the end of GPU mining (220 Mhash, 800W, 3000$):
https://steemit.com/technology/@cloh76/bitmain-to-release-ethereum-asic-miner-the-antminer-f3
GPU based mining rigs are not even close.

so many gpu that can flood the maket, and many of them still under warranty! ahahah and they are almost dead, lol, hard time to replace all those f*** up card

 

[arroyo]

For AMD definately not be much impact. They have consoles, CPUs ... their market is diversificated.
For NVIDIA ... that might be an issue.

 

[TheinsanegamerN]

For AMD definately not be much impact. They have consoles, CPUs ... their market is diversificated.
For NVIDIA ... that might be an issue.

Nvidia has the switch, which is still selling well. Nvidia also has the stranglehold on the high end PC gaming market ATM, after the failure of VEGA in both performance and, more crucially, availability. Nvidia also supplies chips for things like tesla's autopilot, and dominates the GPGPU server world as well as the AI development world.

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.

"Over the past couple of weeks, prices of popular high-end GPUs such as the GeForce GTX 1080 Ti have cooled"
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!

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.

 

[rtwjunkie]

For AMD definately not be much impact. They have consoles, CPUs ... their market is diversificated.
For NVIDIA ... that might be an issue.

It won’t be. This is why they are cutting back on what they produce and send to the AIB’s. If anything, a sudden slump in mining demand for cards will hurt the AIB makers.

 

[TheTechGuy1337]

John Oliver covered this ponzi scam of Crypto currency on last episode of Last week tonight nicely. While it would be great for gamers to find GPUs at cheaper prices it certainly would hurt bottomline for gpu makers and a good chance investors would be angry.

I love John Oliver, but as with any news coverage even comedic. They can't go over everything. Bitconnect did indeed run with its tail between its legs, but what was not covered was time. Anyone that got in Bitconnect within the first 7 to 8 months made money, and I am not talking chump change either. The money was pouring out of that program, and it lasted over a year before it went belly up. It sucks for those that got in at the last minute, but hundreds of thousands of people walked out in the green. Are lending platforms like Bitconnect a ponzi? Probably. Some say they have bots that buy and sell through arbitrage, but most people do not believe it. Will people stop investing in these lending platforms? Hell no...People who missed out on platforms like Bitconnect or Davor want in....and so the cycle continues. Unregulated currency is a risky investment, but you do so at your own risk. Don't invest if you are not willing to lose it. That's my motto.

 

[Octavean]

John Oliver covered this ponzi scam of Crypto currency on last episode of Last week tonight nicely. While it would be great for gamers to find GPUs at cheaper prices it certainly would hurt bottomline for gpu makers and a good chance investors would be angry.

Yeah, I watched that "Last week tonight" ep and it was really funny as usual.

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,......

 

[rainzor]

This is what will be the end of GPU mining (220 Mhash, 800W, 3000$):
https://steemit.com/technology/@cloh76/bitmain-to-release-ethereum-asic-miner-the-antminer-f3
GPU based mining rigs are not even close.

7 optimized RX580s get that hash rate at similar power consumption levels. Sure, ASIC is easier to setup and maybe cheaper at first, but if mining goes south it will become worthless, unlike GPUs. I'd be on a lookout for a Baikal Giant N, a Cyptonight ASIC that hashes the same as 10 optimized RX Vegas while using just 60W and costing way less. That being said, i fully agree that GPU mining will eventually die off.

For AMD definately not be much impact. They have consoles, CPUs ... their market is diversificated.
For NVIDIA ... that might be an issue.

No, actually it will hit AMD much more just like it did when the first crypto bubble popped. Of course i'm not talking about going under or anything like that, but hit in revenue for sure.

 

[xkm1948]

Good news