Gigabyte is a company suffering from the drop-off in cryptocurrency mining. Its GPU and motherboard production received a boost in the sales department last quarter. Those profits are expected to drop off as shipments are on the decline.
Gigabyte Faces a Setback
The past few months have seen a decline in the demand for GPUs and motherboards. Cryptocurrency mining has hit a setback due to declining currency prices. This has an effect on all companies manufacturing this hardware. For Gigabyte, it means a decline in sales and shipments. This drop-off was to be expected as the previous trend was unsustainable in the long run.
Several factors influence cryptocurrency prices. Market volatility is caused by regulatory developments and security concerns. Recent exchange hacks have made their mark on the cryptocurrency industry once again. With the declining prices, cryptocurrency mining also becomes a lot less appealing. Lower demand for Gigabyte graphics cards is a logical result of this ongoing trend.
For consumers, this trend will have a positive side effect. Prices of graphics cards have skyrocketed over the past few months. With Gigabyte product demand slowing down, prices are expected to return to normal once again. Card prices had spiked by as much as 50% prior to this cryptocurrency mining disinterest.
The Rough Numbers Are Worrisome
Growing disinterest in cryptocurrency mining pushed Gigabyte revenues to NT$5 billion ($163.9 million USD) in April and May of 2018. That is close to half the revenue compared to March. With cryptocurrency prices declining further, it is expected the next monthly revenue statement to be even worse., according to Capital Investment.
During Q1 2018, Gigabyte shipped 1.2 million graphics cards. It is expected 20% fewer units were sold during the second quarter. Monthly shipments during April and May are considerably lower compared to March 2018. This correlates with ongoing declining cryptocurrency prices. Unless prices surge for Bitcoin and Ethereum, no increased demand is expected for Gigabyte products.
There is a light at the end of this tunnel for the manufacturer. Nvidia has announced a new line of GPUs which will help boost overall shipments and sales again. The Volta graphics cards will not necessarily be appealing to cryptocurrency miners. That will heavily depend on how the prices evolve for all currencies in the coming months. Gigabyte is not banking on an influx of miners to improve its revenue and earnings.
Will manufacturers continue to see declines due to less enthusiasm for cryptocurrency mining? Let us know in the comments below.
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