AMD Projects Drop in Q1 Sales Due to Crypto Bear Market and GPU Mining Demand
AMD, one of the top graphics card makers in the market today, has made an announcement this week and it affirmed that it recently had its highest profitability in seven years, but that it currently expects some of it to drop due to the crypto mining market crisis.
The company, which had a revenue of $1.42 billion USD last quarter and $6.48 billion USD in the year, said that this was one of its best recent years. However, the revenues from crypto mining seem to have completely disappeared for the company, which will possibly impact the first quarter of 2019.
According to AMD, the first quarter of the year should bring a revenue of $1.25 billion, which is 12% less than now. The company explained that the sequential decrease is mostly driven by the fact that people have stopped buying GPUs to mine cryptos.
AMD has affirmed that it was aware that the revenues from mining could disappear at any moment. Back in 2017, Lisa Su, the CEO of AMD, affirmed that the demand generated by the crypto market, which was on the rise back then, would not last forever. This opinion was voiced again last year as the company deemed the crypto market to be too unstable to keep up with the demand.
During some time of 2018, crypto mining was responsible for over 10% of all the company’s sales. However, now the number is way lower and almost no sales at all come from the sector. The drop started in the second half of the year and continued until today.
With less demand, the prices have gone down, too. RX580, an AMD GPU, lost over 70% of its price during the year.
The CEO of the company, Su, projects a good year, though, even without the money from the crypto miners. According to her, 2019 is shaping up to be a great year. The company is set to launch its “broadest and most competitive product portfolio ever”, with new products from the Radeon, EPYC and Ryzen lines.
Nvidia, AMD’s main competitor, is also seeing its revenue decrease as miners basically stopped buying its products as well. The company has also seen a major sell-off in its stock last year.