Thursday, March 7, 2019
With the dissipation of the cryptocurrency mining fad, graphics card players have begun cutting product prices in a bid to clear out excess inventory at the expense of profitability, according to industry sources.
Graphics card vendors had taken in large volumes of GPU inventory from AMD and Nvidia in the past six months, but demand for graphics card has started picking up recently thanks to their price-cut campaigns. So far, graphics cards of Radeon RX580 and below grades have seen their prices slipping quickly, while those of Nvidia's GeForce GTX 1060 and 1070 have also been dipping significantly, the sources said.
Although Nvidia, AMD and graphics card vendors are expected to see rising revenues, profits will be unsatisfactory and may even be halved from previous high levels. The inventory digestion process may not end until mid- to late-2019, the sources noted.
AMD-based graphics card vendor Tul saw its January-2019 revenues increase dramatically by 115% on month to arrive at NT$161 million (US$5.19 million), but fall 85.7% compared to January 2018, the peak of the cryptocurrency mining fad. The company had net losses of NT$10.31 million in January 2019 and EPS of negative NT$0.31.
Taiwan-based first-tier players have mostly seen losses from their graphics card businesses for the past two months.
Although Nvidia has been planning new products for the entry-level to mid-range segments including GeForce RTX 2060, GTX 1660Ti, and the upcoming GTX 1660 and GTX 1650, to maintain its profitability, graphics card players are only expected to earn little from the new cards.
With Nvidia releasing new cards and cutting prices to clear out its previous-generation inventory, AMD is currently under heavy pressure to lower its quotes, while players selling AMD-based cards are also facing strong competition from Nvidia-based ones.
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