Nvidia Crypto Mining chip sales fell 60% in Q3

Zhen-san Huang, President and CEO of Nvidia Corporation, speaks during the company’s event at Mobile World Congress America in Los Angeles, California, USA, on Monday, October 21, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Even as the price of digital currency rises throughout 2021, Nvidia has not made money in creating digital “shovels” for miners.

The type of processor that Nvidia makes, the GPU, can be used to efficiently mine etherium by solving complex math problems. In March, the company launched a version of its chips specifically aimed at cryptocurrency professionals called CMP.

Nvidia said on Wednesday that CMP sales had fallen by 60% in recent quarters and product line sales were expected to be “very negligible” in the fourth quarter.

Sales of Nvidia CMP cards have dropped from $ 266 million in the August quarter to $ 105 million in the most recent quarter ending in October.

Adding $ 155 million to CMP sales since the May quarter, the chipmaker now says it received a total of $ 526 million in revenue over the product’s lifetime – well below the company’s 3% of $ 19.27 billion in revenue during that time.

The lack of traction for CMP did not hurt Nvidia at all. Its stock is up 123% per annum. It said in an earnings report on Wednesday that overall sales grew 50% year-on-year and that it had sold graphics cards to gamers and PC makers at $ 3.2 billion a quarter.

In 2018, the fall in cryptocurrency prices hurt Nvidia’s stock and sales as used graphics cards hit the used equipment market, leaving prices disappointing.

2021 is different. This year, it was hard for gamers to find Nvidia’s latest generation of GPUs at retailers because they sold out so quickly, and the company warned Wednesday that it saw “irresistible demand” in the holiday quarter.

When Nvidia announced CMP cards in the spring, they were created as a tool to keep GPU supplies available to gamers instead of industrial mining.

Nvidia CEO Jensen Huang said in May that “what we expect is that CMPs will satisfy miners and stay in professional mines,” adding that the product line “protects supply for gamers”.

Nvidia sees gamers as a core market and also believes that GPUs will become the standard component of every cloud server. The bull case for Nvidia doesn’t necessarily need to become the cryptocurrency gold rush levies – it could become a key supplier for companies looking to create an “all-around” or online world with 3D graphics, Huang said Wednesday.

Nvidia has added software to its gaming-centric cards to make them less suitable for cryptocurrency mining. The company said on Wednesday that almost all GeForce graphics cards it sells for desktops have software called Light Hash Rate, launched in an effort to “bring GeForce to gamers”.

Nevertheless, the company says it cannot be sure that the growing sales of graphics cards are not related to the cryptocurrency world.

Our GPUs are capable of crypto mining, although we have no idea how much this affects our overall GPU demand, “Nvidia CFO Collet Cress said in a call with analysts on Wednesday.

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