The past twelve months have been interesting for graphics card manufacturers. Both AMD and Nvidia benefited from the sudden cryptocurrency mining craze. For the latter company, they may have overestimated the popularity of this trend. As such, there is now an excess of GPU inventory, which poses its own set of problems.
Crypto Mining Takes off
Given the massive increase in the cryptocurrency prices throughout late 2017 and early 2018, an interesting trend took place. More specifically, there was a major increase in the demand for GPUs. For Nvidia and AMD, this was considered a positive development. Being able to sell more units due to this trend was quite a bonus.
Now that everything has returned to normal, demand for GPUs is tapering off. Nvidia may have overestimated the popularity of cryptocurrency mining after all. After announcing no new generation of GPUs will be produced soon, the company now has a new problem. Its current generation of hardware is suffering from a supply surplus. It is also one of the reasons why no new hardware will be developed.
This situation is not exactly what people had expected. While Nvidia never banked on crypto mining to a large degree, it seems their predictions were off by quite a margin. As such, it remains to be seen if there will be any lower prices for these cards moving forward. The units will need to be sold in one way or another. Gamers have been struggling to find cards at a decent price, but it seems they will be in luck from now on.
The Future of Nvidia in Mining
One thing to keep in mind is how all cryptocurrency markets can, and will, rebound. As such, it is expected a lot of users will begin mining again. Unfortunately for Nvidia, one of their Asian OEM partners returned 300,000 GPUs in the process. That is not a positive development and creates a worrisome situation.
Additionally, it seems shipments may increase for other reasons as well. PC gaming is still a booming industry as of right now. With these cards being back in stock at normal prices, a lot of sales could be generated fairly quickly. For Nvidia, it may take a few more quarters before they can move major units, though. The upcoming Asian Games 2018 may effectively be a catalyst in this regard.
Whether or not Nvidia will blame crypto mining for this development remains unclear. The firm seemingly overestimated the demand, but that is to be expected. Cryptocurrency is a volatile industry and the current prices are far from appealing. As such, mining is at a low in the GPU department, whereas ASICs are still in high demand. This is an interesting situation worth keeping an eye on.
How soon do you expect Nvidia to liquidate their excess inventory? When will they announce the creation of a new GPU? Let us know in the comments below.
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