It has surely been a productive year for graphics card manufacturers such as NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD). The Two companies have seen enormous gains this past year. With NVIDIA currently up almost 61 percent, while AMD is up 9 percent since June of 2017.
A large part of these massive gains have been related to the sales of their high-end graphic processing units also know as GPUs. The sudden increase in demand of GPUs came from consumers hoping to capitalize on the cryptocurrency mining fad, especially in late 2017 when the price of Bitcoin rose to $20,000 However, AMD and NVIDIA lacked supply to meet these demands. Both companies had profits on the first quarter of 2018.
According to Harsh Chauhan “AMD has said that it got 10% of its total revenue in the first quarter from cryptocurrency mining. Given its total revenue of $5.3 billion last year, that would indicate it cornered roughly two-thirds of estimated cryptocurrency-related GPU sales. NVIDIA also said that cryptocurrency miners drove nearly 10% of its GPU sales last quarter.”
As cryptocurrency mining is a fairly new concept it is constantly changing. Bitman a large privately owned mining company headquartered in Beijing, China, who also designs ASIC chips has been NVIDIA and AMD biggest competitor in the mining sector.
The cryptocurrency mining landscape has drastically changed over the course of the past few years. Large mining companies such as Bitmain have been the biggest competition to NVIDIA and AMD in the mining sector. Bitmain regularly releases updated versions of their Application-Specific Integrated Circuit (ASIC) mining rigs.
ASIC miners are made for the sole reason for mining cryptocurrency. They are less expensive and more effective at mining and are for the most part accessible to general public.
As new and more powerful ASIC are being developed companies like NVIDIA and AMD have started to notices a decline in demand in their GPU. The price of their GPU has also declined as the supply is catching up with demand.
Because of the new ASIC, NVIDIA and AMD have both felt the reaction from the PC gaming network — who are not very excited about the increasing costs and rare accessibility of top of the line equipment that was intended for gaming, NVIDIA has taken steps to conciliate its users by releasing the GeForce GTX 1050 3GB graphics card.
Moreover, AMD and NVIDIA are at a pivotal point. Since they are getting out beaten by other companies who develop more affordable and methodical mining hardware. What should they focus on for the remainder of 2018? Should they go back to their main area of focus such as data management, artificial intelligence solutions, and gaming hardware.