AMD Worries Cryptomining GPU Demand Could Fall

[Crunchy Dragon]

AMD has claimed that lower demand for GPUs from cryptominers could adversely affect the company.

 

Quote

AMD has warned that reduced demand from cryptocurrency miners could “adversely” affect the firm’s GPU business.

The company — who along with Nvidia dominates the GPU manufacturing industry — disclosed in an annual report dated Feb. 27 that the dramatic growth of the cryptocurrency mining industry had a material impact on AMD’s revenue during the fiscal year.

“We believe that the rise of cryptocurrency prices and introduction of new cryptocurrencies created a demand for our GPUs in 2017. The cryptocurrency market has existed for several years and their prices and popularity increased in 2017. The mining operation of cryptocurrencies are typically performed using specifically designed application-specific integrated circuits (ASICs); however, the introduction of new cryptocurrencies (e.g. Ethereum) have made mining on GPUs more efficient, providing a higher rate of return for the end user.”

AMD experienced a soar in market shares due to cryptomining so it's understandable that they would worry about the GPU demand falling.

 

Quote

AMD’s share of the GPU market rose to 33.7 percent from 27.2 percent during the fourth quarter, while Nvidia’s dropped 72.8 percent to 66.3 percent, which John Peddie Research attributed partially to the fact that AMD was the primary benefactor of the $776 million worth of GPUs that miners purchased in 2017

AMD seems to be experiencing less of a shortage than Nvidia, since Nvidia caters more to gamers than AMD does.

Quote

Moreover, increased demand from cryptocurrency miners has presented AMD and — to a lesser extent — Nvidia with new business risks, as well. Demand from miners is less stable than gamers or other industries that utilize GPUs, which is likely why Nvidia has committed to favoring gamers over cryptocurrency miners when supplies are limited.

Consequently, fluctuating cryptocurrency prices — as well as regulations hostile to the industry — could cause the GPU market to be “materially adversely affected,” though this would most likely affect AMD to a much greater degree than Nvidia.

“The cryptocurrency market is unstable and demand could change quickly. For example, China and South Korea have recently instituted restrictions on cryptocurrency trading,” AMD concluded. “If we are unable to manage the risks related to a decrease in the demand for cryptocurrency mining, our GPU business could be materially adversely affected.”

Interesting, I haven't heard anything about Nvidia worrying about GPU demand falling. Guess it relates to how AMD experienced more of a shortage. 

 

I honestly expected to hear about this kind of news from Nvidia, although I didn't know how much AMD contributed to the cryptomining industry. 

 

Source: https://www.ccn.com/amd-warns-gpu-market-could-be-adversely-affected-if-demand-from-miners-dries-up/

[PCGuy_5960]

Makes sense, miners particularly love the RX 480/580.

[ItsMitch]

Just now, PCGuy_5960 said:

Makes sense, miners love the RX 480/580.

And all the other fucking cards they can gobble up

[Crunchy Dragon]

Just now, PCGuy_5960 said:

Makes sense, miners love the RX 480/580.

Don't forget about Vega, that's been struggling with availability longer than the 1060. 

[Guest]

Step 1: Radeum Coin

Step 2: Profit.

[Energycore]

Just now, SC2Mitch said:

And all the other fucking cards they can gobble up

Except for some reason R9 280s and 280Xs, you can find those for very cheap used. I'll see sometimes an auction for a working R9 280 closing below $100 on ebay.

 

OT: I think AMD might be worried about the used market being flooded like what happened in 2014. Back then the crypto space dove into a bear market for a year and change, and every card that had been used for mining was fed into the used market, taking away from new GPU sales.

 

Nvidia didn't care about that because people will buy a rusty toaster for $500 if it's got the Geforce branding on it.

[mynameisjuan]

Well if AMD would provide actual competition in the gaming scene then relying on mining wouldnt be an issue for them. 

[Ginger_]

I think the only reason amd will have any GPUs bought at this point is for mining or freesync. Nvidia beats them most of the time in performance per dollar, and with 2 years old cards.

 

I would love to buy a Vega 56 for my freesync monitor, but 400 msrp on a blower card is straight retarded. 

[Crunchy Dragon]

7 minutes ago, Energycore said:

OT: I think AMD might be worried about the used market being flooded like what happened in 2014. Back then the crypto space dove into a bear market for a year and change, and every card that had been used for mining was fed into the used market, taking away from new GPU sales.

 

Nvidia didn't care about that because people will buy a rusty toaster for $500 if it's got the Geforce branding on it.

Hmm that would make sense.

 

Razer toaster anyone?

[Okjoek]

7 minutes ago, mynameisjuan said:

Well if AMD would provide actual competition in the gaming scene then relying on mining wouldnt be an issue for them. 

It's easy to say that, but as I learned from watching AdoredTV the odds are really stacked against AMD for making that happen. You can't simply outdo the competition easily will less resources and gamers want nVIDIA and vote with their wallets and mindshare. which is money AMD doesn't have for R&D. It's a negative feedback loop that's very hard to break.

 

AMD is being smart by siding with miners because they needed to find a niche where they leverage their compute horsepower. In a lot of ways mining, as much a double edged sword as it is has breathed some life into RTG which for now is very fortunate for them. It leaves them at the mercy of the volatility of the crypto-market though.

[BuckGup]

The RX480/580 was a steal at $199 to begin with

[Blademaster91]

6 minutes ago, Okjoek said:

AMD is being smart by siding with miners because they needed to find a niche where they leverage their compute horsepower. In a lot of ways mining, as much a double edged sword as it is has breathed some life into RTG which for now is very fortunate for them.

Not that smart in the long run when AMD is screwing over their gaming audience with a GPU only decent for compute tasks. Miners dump their cards onto the second hand market at a inflated price compared to their competition while you also can't even find any Vega card at a sane price.

13 minutes ago, mynameisjuan said:

Well if AMD would provide actual competition in the gaming scene then relying on mining wouldnt be an issue for them. 

It would be smart for AMD to do something for their more loyal enthusiast consumers,right now marketing to miners only just gets Nvidia even more sales though I wouldn't pay $400-500 for a higher TDP blower card anyway.

[mr moose]

I hate it when tech journalists (or any for that matter) try to decipher 10k forms.  Yes AMD are worried about the mining dropping off, it makes up a percentage of their sales. But you may as well ask a lawyer to interpret the specs of a GPU and tell you how good it will perform.   There is a lot of information in those forms that pertain to financials and intentions rather than concrete market analysis. 

[Energycore]

12 minutes ago, Blademaster91 said:

Not that smart in the long run when AMD is screwing over their gaming audience with a GPU only decent for compute tasks. Miners dump their cards onto the second hand market at a inflated price compared to their competition while you also can't even find any Vega card at a sane price.

Wait, which card has AMD made that's specifically made for miners? As far as I know, Vega was marketed to gamers first. Then gamers didn't buy it, but miners did, to the point where they're now very hard to buy.

13 minutes ago, Blademaster91 said:

It would be smart for AMD to do something for their more loyal enthusiast consumers,right now marketing to miners only just gets Nvidia even more sales though I wouldn't pay $400-500 for a higher TDP blower card anyway.

Like what? Turn completely away from other profit sources? That's not smart business. If you feel angry that AMD's marketing to miners, you can switch but that's on you, not on AMD. They have no obligation toward you.

 

Just imagine this argument in any other context "we've got a bunch of new clients coming in, but since our old clients are upset that we're selling their product (that they haven't bought yet), we won't market to these new clients". You know what that's called? I call it pandering.

[Blademaster91]

31 minutes ago, Energycore said:

Wait, which card has AMD made that's specifically made for miners? As far as I know, Vega was marketed to gamers first. Then gamers didn't buy it, but miners did, to the point where they're now very hard to buy.

Like what? Turn completely away from other profit sources? That's not smart business. If you feel angry that AMD's marketing to miners, you can switch but that's on you, not on AMD. They have no obligation toward you.

 

Just imagine this argument in any other context "we've got a bunch of new clients coming in, but since our old clients are upset that we're selling their product (that they haven't bought yet), we won't market to these new clients". You know what that's called? I call it pandering.

AMD's crypto drivers,marketing Vega FE for "blockchain pioneering",all of the retailers selling AMD cards by the bundle with mining risers? Doing all of this while they still rehash their 2xx series with no real competition to Nvidia. I'm not even angry that AMD is marketing to miners,good for them because mining isn't going anywhere although gamers are going to buy something else. it's just ironic that they're for some reason worried when they put it onto themselves by not making cards available to their gaming audience,so it's no more pandering than selling to the miners only.

[Energycore]

4 minutes ago, Blademaster91 said:

AMD's crypto drivers,marketing Vega FE for "blockchain pioneering",all of the retailers selling AMD cards by the bundle with mining risers? Doing all of this while they still rehash their 2xx series with no real competition to Nvidia. I'm not even angry that AMD is marketing to miners,good for them because mining isn't going anywhere although gamers are going to buy something else. it's just ironic that they're for some reason worried when they put it onto themselves by not making cards available to their gaming audience,so it's no more pandering than selling to the miners only.

I don't think giving competition to Nvidia is a realistic, or sensible, business decision. For one, right now AMD does not have anywhere near enough R&D money to match them. And more importantly, back when AMD did match them or was even ahead, people still bought Nvidia anyway. That's not going to change if AMD starts being competitive in the gaming market again. At best, they'll increase their marketshare by a small amount as enthusiasts start buying their stuff again. But your average joe is still going to buy Nvidia.

 

So the fact that "gamers are going to buy something else" was already true for the most part, even when AMD had a fighting chance at the performance crown. It's only fitting that knowing this, AMD turns to some other market niche.

 

As for their statement that they're worried that the crypto market will decline, I think every business worries that their target market is going to decline. The fact is, the value of crypto is right now in a very unclear place. It could go up as much as 40% over the weekend, or lose as much. So yes, the risk is there and it's good that AMD acknowledges it. I think the best for them is to ride the wave up while this lasts, and be ready to eject as soon as there is indication that this is running out. Because it's a fact that they're going to take in a lot more profits selling to miners who are only performance-oriented, than to gamers that have as a collective a very clear bias toward the color green.

[MoonSpot]

Damn right AMD is worried, and they should be.  AMD has already experienced massive writedowns, which if they repeat would wipeout all the headways they've made profit wise.  Apparently AMD has committed to increasing GPU supply, so their ass could easily be left hanging in the wind if the timing for next crypto bust doesn't line up in AMDs favour.

https://techreport.com/news/33189/amd-signals-that-itll-make-more-gpus-to-alleviate-demand

 

Outside of crypto AMD doesn't have an edge against nvidia, so if they have to primarily rely on gaming and the sciences/engineering again it quickly doesn't look good for them again on the GPU front.

[cj09beira]

8 minutes ago, Blademaster91 said:

AMD's crypto drivers,marketing Vega FE for "blockchain pioneering",all of the retailers selling AMD cards by the bundle with mining risers? Doing all of this while they still rehash their 2xx series with no real competition to Nvidia. I'm not even angry that AMD is marketing to miners,good for them because mining isn't going anywhere although gamers are going to buy something else. it's just ironic that they're for some reason worried when they put it onto themselves by not making cards available to their gaming audience,so it's no more pandering than selling to the miners only.

they made 2 drivers in june early august, that mostly fixe the problems of having perf go down with time, which means that polaris could still be used, it it wasn't for that vega would be even more rare to see on stores, also amd is probably taking that money and investing into gaming not mining, plus its not like consumers would buy their cards at a volume that is fair considering their position in the market, amd has been struggling to sell their product even when they have a good one.

1 hour ago, Blademaster91 said:

Not that smart in the long run when AMD is screwing over their gaming audience with a GPU only decent for compute tasks. Miners dump their cards onto the second hand market at a inflated price compared to their competition while you also can't even find any Vega card at a sane price.

It would be smart for AMD to do something for their more loyal enthusiast consumers,right now marketing to miners only just gets Nvidia even more sales though I wouldn't pay $400-500 for a higher TDP blower card anyway.

except they aren't doing that, they are focusing on gaming and hpc ( doesn't help for mining thanks to high prices), plus from my point of view they are the ones being screwed as consumers don't pay much attention to them at all,

its not a good time to release cards right now, with a massive node improvement and better memory right around the corner its best for them to focuses on getting that right than having another product out right now, they could release a vega with faster memory without much hassle at all but prices for those cards would be even higher and miners would get them all, its a good time to focus on getting the drivers perfect.

[cj09beira]

9 minutes ago, Energycore said:

 

profitability of eth and most other big coins isn't great right now as you are getting around 50 bucks per 580 (and thats on cheap electricity costs of 0.1) so i expect some people to start giving up soon, especially those with small amounts of cards, difficulty of eth for example is crazy high right now, it takes almost a full month to get 0.05 eth, something i did every 4-5 days just 6 months ago.

and with eth wanting to move away from pow i see the mining craze fading away, not as rapidly as before (thanks to there being more coing to mine) but it seems to me like its slowing down, although also expect gddr6 cards to ignite that flame again (not sure how much) as soon as they show up, as the faster memory will make the cards more profitable, 

[Energycore]

Just now, cj09beira said:

profitability of eth and most other big coins isn't great right now as you are getting around 50 bucks per 580 (and thats on cheap electricity costs of 0.1) so i expect some people to start giving up soon, especially those with small amounts of cards, difficulty of eth for example is crazy high right now, it takes almost a full month to get 0.05 eth, something i did every 4-5 days just 6 months ago.

and with eth wanting to move away from pow i see the mining craze fading away, not as rapidly as before (thanks to there being more coing to mine) but it seems to me like its slowing down, although also expect gddr6 cards to ignite that flame again (not sure how much) as soon as they show up, as the faster memory will make the cards more profitable, 

$50 per month per 580 means a 6 month ROI if you pay $300, I think that's pretty great if you ask me.

 

Eth going proof-of-stake will definitely mean a decline in GPU mining. There are other coins of course, but none like ETH when it comes to its profitability.

 

There's a chance that people will still be able to mine ETC (Ethereum Classic) after the PoS launch though. I'm also concerned that the PoS launch has been put off multiple times now.

 

If GDDR6 cards have great performance mining ethereum or any other ethash coin, the expected outcome is for older cards to become less profitable as the network hash rate rockets up - and so does difficulty.

[cj09beira]

7 minutes ago, Energycore said:

 

profitability was around 200 6 months ago, plus you cant find a card at good prices

my point is that profitability is going down hard

[dizmo]

I would have thought this was obvious.

[Mr.Meerkat]

2 hours ago, Energycore said:

Except for some reason R9 280s and 280Xs, you can find those for very cheap used. I'll see sometimes an auction for a working R9 280 closing below $100 on ebay.

*cough cough* $100 is not cheap for a 280...2 years ago, I bought 5 7950s for £30-40/ea while had I wanted to buy 280s, it would have costed me £50/ea~. That is a 43% price increase from 2 years ago, not quite the bargain eh? 

[Energycore]

7 minutes ago, cj09beira said:

profitability was around 200 6 months ago, plus you cant find a card at good prices

my point is that profitability is going down hard

I don't think it ever was $200 for a single 480/580

 

I started mining 6 months ago, and the estimate was around $30-$40. The peak, the highest I saw it, was close to $100 when ethereum cost $1400.

5 minutes ago, dizmo said:

I would have thought this was obvious.

That's why I think we're making too big a deal about this. Obviously companies are aware of the risks they're in if they've got any savvy at all. But here we are discussing this as though it's something completely unexpected

[Energycore]

Just now, Mr.Meerkat said:

*cough cough* $100 is not cheap for a 280...2 years ago, I bought 5 7950s for £30-40/ea while had I wanted to buy 280s, it would have costed me £50/ea~. That is a 43% price increase from 2 years ago, not quite the bargain eh? 

Yeah, I know they're not cheap, but they're the only cards left at any reasonable price