Nvidia is bearing the brunt of dwindling crypto mining demand: Report | Tech News

Nvidia is bearing the brunt of dwindling crypto mining demand: Report

Nvidia has reportedly delayed the launch of its next-gen graphic cards as it overestimated crypto mining demand.

| Updated on: Aug 19 2022, 23:33 IST
Nvidia has been put in a spot after one of its partners in Asia returned 300,000 GPUs.
Nvidia has been put in a spot after one of its partners in Asia returned 300,000 GPUs. (AFP)

Has the bitcoin bubble already begun to burst? A group of researchers in a study published earlier this month claimed that the bitcoin price surge late last year was actually manipulated. Despite the apprehensions, crypto valuations are expected to surge in the coming months. Amid a cloudy future for cryptocurrencies, technology firms may have begun to bear the brunt.

The first victim is Nvidia which is reportedly stuck with a huge inventory of GeForce 10 series graphics cards as it overestimated the demand for bitcoin mining. The company has said it will not launch new GPUs (Graphic Processor Units) for a "long time", reported Seeking Alpha via Semiaccurate. The company has been put in a spot after one of its partners in Asia returned 300,000 GPUs.

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Another website WCCFtech reported that Nvidia and AMD both inflated prices of graphics cards in the wake of growing craze of cryptocurrency mining. The move had drawn flak from gamers who were not able to get their hands on the latest GPUs.

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Earlier this year, Jen-Hsun Huang, NVIDIA's CEO, had hinted at shifting the focus back to the core gaming community.

"We're working really hard to get GPU down to the marketplace for the gamers and we're doing everything to advise retailers and system builders to serve the gamers. And so, we're doing everything we can, but I think the most important thing is we just got to catching for supply," he is quoted as saying.

Nvidia Did See It Coming
Nvidia seemed fully aware of the possible burst of cryptocurrency mining bubble. The company had predicted the GPU prices will come down after the third quarter of this year.

"Strong demand in the cryptocurrency market exceeded our expectations. Cryptocurrency mining accounted for a higher percentage of revenue than the previous quarter. Keep in mind that's very difficult for us to quantify down to the end customers' view. Our main focus remains on our core market, as cryptocurrency will likely remain volatile," Colette Kress, NVIDIA's executive vice-president and chief financial officer is quoted as saying.

As WCCFtech pointed out, Nvidia didn't predict the mining trend to fade away so early. The company did expect a plunge, but continued to inflate the supply.

Everyone Did
Digitimes had predicted a similar downward trend for the cryptocurrency mining in the coming months.

"The sources said that the cryptocurrency mining heyday seen between April 2017 and March 2018 suffered an abrupt downturn in April due partly to the Bitcoin value plunging to under US$7,000 from a peak of nearly US$20,000 recorded in December 2017 and partly to governments of China, South Korea, the US and many European countries rushing to clamp down on digital-coin exchanges following exposures of scams, frauds and market manipulations," said a Digitimes reported.

"Accordingly, the sources expected the graphic cards supply chain to return in the second half of 2018 to the previous state of serving mainly the gaming sector seen before the rise of the cryptocurrency mining craze. And those makers with weaker deployments in the gaming sector may see their overall shipments of graphic cards fall significantly in the future," it added.

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First Published Date: 21 Jun, 14:48 IST