The slowdown in crypto mining and lack of new GPUs from Nvidia is hurting Nvidia’s partners. According to the latest earnings report from Gigabyte – a Taiwan based motherboard and graphics card manufacturer has seen a drop in earnings thanks to weaker than expected GPU demand. According to recent estimates, Gigabyte’s GPU were down by around 50%. This has resulted it being down by $6 million in the second quarter of the year from $10 million in the first quarter, with its non-GPU interests holding steady as usual.
“As Gigabyte’s non-GPU business is less volatile and accounted for 49 percent of total revenue in Q1 and, investors should be able to conclude that graphics card revenue dropped to the tune of 50 percent plus from Q1 to Q2,” Seeking Alpha has suggested and that the low demand on crypto mining has caused this loss for Gigabyte’s revenue.
With ASUS, MSI and other AIBs that are expected to release their quarterly earnings this week, Gigabyte is the first to reveal how bad the lack of new product from Nvidia has hit its partners. June 2018 was the worst revenue month for Gigabyte since December 2016.
“From these sales numbers from Gigabyte, one can conclude that June was an unusually weak month in GPU land. Nvidia guided right when the GPU market was experiencing a bit of a crypto bounce in early May. I think this data point is the first hard evidence that Nvidia’s CEO comments on the Q1 call with respect to gaming demand and Q2 seasonal gaming revenue expectations were inconsistent and overly optimistic,” Seeking Alpha continued
Stuck with excess inventory
a previous report across all tech news outlets claimed that Nvidia is stuck with excess inventory of 10 series cards due to overestimating the crypto mining GPU demand and the demand from gamers. So much that one of the biggest Asian OEM partners allegedly returned 300,000 GPUs to Nvidia.
No new GPUs in the near future
When reporters asked when the new GeForce GPUs will launch, Nvidia CEO Jensen Huang responded, “It’s a long time from now.” But Nvidia has been sending invites for an event at Gamescom 2018 which is a gaming press conference. Gamescom was used to debut new software features to complement its hardware such as GeForce Experience streaming and PUBG getting Nvidia Ansel support.
What this means to AIBs
Without a new from nvidia, the third quarter for many AIBs is going to be bad, notably July and August in the lead up to a speculated September release window.
Are next gen Nvidia GPUs coming “a long time from now”?
One of Lenovo representative claimed it’s “time to market with NVIDIA 11 Series up to an 1180 down the road” which leads to a possible GeForce GTX 1180 announcement at Gamescom 2018.