Sales of Nvidia’s Ethereum Mining Chips Decrease by $134 Million for These Reasons!
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Answer Sales of Nvidia’s Ethereum Mining Chips Decrease by $134 Million for These Reasons!
In the middle of the second quarter of 2021, I expected Nvidia, the largest computer chip maker in the United States, announced that its cryptocurrency mining products will generate $400 million in revenue.
But the wind ran as the ships did not desire.
Its chip production line, known as cryptocurrency mining processors (CMP), posted sales of just $266 million in the second quarter, even though the company posted better-than-expected total revenue of $6.5 billion and profit of $1 billion, according to an earnings report released today. yesterday.
In April and May, with a lack of international demand crippling chip production, Nvidia reorganized its business to attract a core demographic that had previously been the core of its operations: gamers.
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Why did Nvidia’s Ethereum mining chip sales drop?
Ethereum miners who could use the same type of Nvidia GPU were devouring chips and demanding larger amounts of them to use to mine Ethereum, verify transactions, and get rewards.
As the demand for it increased with the rise in the price of Ethereum.
GPUs were selling for three to four times the normal price, which drove gamers out of the market.
To combat this, Nvidia has throttled its GeForce graphics cards, making them less powerful in mining hardware.
Nvidia indicated at the time via a blog post that GeForce was created only for games.
Nvidia relies on gamer-oriented graphics cards for its revenue, accounting for 65% of this revenue.
But graphics cards destined for the mining business only represent 7% of the revenue.
However, the company’s revenues were affected by the lack of demand for its own equipment destined for mining Ethereum, due to the fact that the Ethereum network is gradually moving from mining to stakes, in addition to the recent upgrade that contributed to reducing the returns and rewards of Ethereum miners, as part of the Ethereum transaction fees are burned Instead of giving to miners.
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All of these factors contributed to the lack of demand for Nvidia’s cards, and thus reduced its sales and profits.
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