Encrypted currencies help AMD's performance soar but the tide of digital currencies is dangerous
Mining continues to support the sales of chip makers, and AMD has also increased its market share.
Market research firm Jon Peddie Research released the latest chip industry report, revealing graphics processor (GPU) shipments and market share of vendors in the fourth quarter of last year. AMD's market share in 2017 has increased significantly, from 13% in the third quarter of last year to 14.2%; both Intel and NVIDIA have declined.
Jon Peddie also mentioned that unlike AMD or NVIDIA, Intel's market share is less affected by digital currency, because Intel integrates GPU or iGPU in desktop or laptop computers, so the rise of digital currency The tide has little impact on Intel's GPU sales.
In terms of shipments, GPU chips fell 4.8% year-on-year, desktop chips fell 2%, and notebooks fell 7%. But digital currency players have significantly supported the chip industry. Last year, miners contributed more than 3 million independent graphics processors, with sales reaching $776 million.
AMD's shipments in the fourth quarter increased by 8.08% quarter-on-quarter, Intel fell by 1.98%, and NVIDIA's shipments fell by as much as 6%.
According to Jon Peddie, AMD is the most profitable chip maker in the mining boom. AMD is the main chip device for digital currency mining. With the rise of digital currency in the fourth quarter of last year, the demand for chips has also been significantly boosted.
At the end of last month, AMD’s fourth-quarter earnings report showed that the adjusted EPS reached US$0.08 in the fourth quarter, exceeding market expectations of US$0.05. Before AMD released its earnings report, analysts pointed out that the high level of digital currency such as Bitcoin at the end of last year will not only promote AMD's performance in the fourth quarter of last year, but also the performance guidance for the first quarter of this year.
"The current situation is that miners are swallowing up the supply of discrete graphics cards, and current production cannot keep up with the huge demand." Jon Peddie mentioned that miners have contributed more to GPU sales than games, although the game It is the most important driving force for GPU sales.
In the second quarter of last year, the digital currency mining industry also boosted GPU sales in the quarter. However, in the third quarter, digital currencies faced global tightening, PC games also experienced strong growth, and the impact of mining on GPU sales was weakened.
However, Jon Peddie, president of Jon Peddie's research department, said that chip demand from miners may slow down in the future, and gamers who already have GPU chips can "mine mines when they are not playing" to offset some of the demand, but " Prices will not fall for some time to come."
At present, AMD is the preferred GPU for mining in Ethereum, with demand above NVIDIA;
Encryption-related revenues already account for 6%-8% of AMD's overall revenue, which has less impact on NVIDIA's business;
AMD's low cost and short payback period make it the preferred GPU for mining in Ethereum, higher than NVIDIA. However, revenue related to encryption has accounted for 6%-8% of AMD's total revenue, which is a considerable amount and will be hindered by AMD's control. The Ethereum “Equity Proofâ€, which is being turned to, has not yet provided industry support to make it a sustainable long-term revenue project for AMD.
For AMD and Nvidia, how big is the encrypted mining market? Given its size in the GPU market, we use Ethereum to evaluate it. RBC estimates that the total market size of only Ethereum mining is $1.87 billion. Only GPUs account for two-thirds, so Ether Square's GPU market is worth $1.25 billion. Note that these figures only include Ethereum, and once other currencies become profitable regions, the market size will be even larger.
Note that in the analysis, the price of Ethereum will be the deciding factor, because the lower price will affect the profitability of the miners, thus affecting their demand for GPU. Please note that the price of Ethereum at the time of writing has dropped from $1400 to $850. The RBC analysis assumes that the price of Ethereum is 5-8 months when it is 720 dollars, which is a very attractive return for most people. However, if Ethereum prices drop significantly, we expect mining companies to suffer lower returns and a longer return on investment.
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