AMD Expects “Near Zero” Revenue From GPU Sales to Crypto Miners

Omar Faridi
  • AMD, one of the world’s largest computer chip manufacturers, expects “near zero” revenue from the crypto and blockchain sector.
  • AMD’s crypto-related revenue skyrocketed earlier this year, but may be down now due to the declining prices of cryptocurrencies

Advanced Micro Devices, Inc. (AMD), a leading multinational computer chip manufacturer, recently stated that its revenue from the crypto and blockchain sector will likely be “near zero” in Q3 2018. This, after AMD’s earnings from the crypto industry skyrocketed earlier this year, primarily due to the rising demand for graphics cards used in mining cryptocurrencies.

AMD’s CEO Lisa Su commented on the chipmaker’s expected decline, by noting that:

For Q2, we were approximately 6% of revenue for blockchain. For Q3, we’re planning very little blockchain.

Lisa Su

Declining GPU Sales

A drop in the sales of AMD’s graphics cards (GPUs), which are used to mine various digital currencies, could partially be attributed to a substantial decline in the market capitalization of the crypto market. Notably though, the price of most cryptocurrencies has recently begun to rise again, with Bitcoin (BTC) currently trading at above $8,100.

Notably, the flagship cryptocurrency dropped below $6,000 toward the end of June, and is currently down nearly 40% from its all-time high of nearly $20,000, according to data from CryptoCompare.

Despite the expected decline, AMD added that revenue from its newly-designed Ryzen processors and large data centers should make up for the losses. The chipmaker's chief financial officer (CFO) Devinder Kumar noted that "graphics revenue was down primarily driven by blockchain sales partially offset by stronger data center sales."

Kumar also pointed out that AMD introduced "Forty-four consumer and commercial Ryzen-based desktops and notebooks" this year. He added that the company expects to launch "a total of 60 Ryzen-based systems" by the end of 2018, in order to meet consistent customer demand. Per AMD’s executives, this should help generate a sizable revenue for the multinational firm during Q3 2018.

A Crypto-Driven Correction

Notably, the multinational investment bank UBS issued a warning in April on the falling prices of cryptocurrencies, noting these could result in a substantial revenue loss for AMD, even more so than its competing chipmaker Nvidia. UBS had also stated that Nvidia's revenue streams consisted of "its coin mining SKU so AMD would be net/net more exposed to a crypto-driven correction in the GPU market."

Back in February, CryptoGlobe reported that cryptocurrency miners had been increasingly buying graphics cards made by AMD and Nvidia. In fact, online retailers were quickly running out of stock due to a large number of orders for GPUs.

Goldman Sachs CEO Denies Company Ever Had Crypto Trading Desk Plans

Francisco Memoria

The CEO of Goldman Sachs, David Solomon, has recently told a U.S. House of Representatives panel that the financial giant never had plans to launch a cryptocurrency trading desk, claiming reports suggesting so weren’t correct.

Speaking during a hearing on ‘holding megabanks accountable’ in which the average citizens’ lack of trust in the financial system a decade after the crisis was discussed, Solomon claimed a story Bloomberg broke on Goldman Sachs’ plans to launch the trading desk weren’t correct.

Addressing Ohio U.S. Rep. Warren Davidson who questioned him on these reports, the CEO noted Goldman Sachs is “watching and doing work to try and understand the cryptocurrency market as it develops,” and added that:

We have some clients that have certain functionality that we’ve engaged with on clearing physically settled futures, but other than that we never had plans to open a cryptocurrency desk.

As CryptoGlobe covered initial plans for its cryptocurrency trading desk were announced back in May of last year, but anonymous sources then told Business Insider in September the financial institution dropped plans to launch it for the time being.

During the hearing Solomon noted that “at some point” Goldman Sachs may look into launching its own cryptocurrency trading desk, although he added that “when dealing with cryptocurrency it’s a new area, there are a lots of issues.”

Other financial industry giants present in the hearing included JPMorgan Chase’s CEO Jamie Dimon, which initially addressed bitcoin by saying it was a fraud, and after a few controversial months ended up claiming he “probably shouldn’t say any more about cryptocurrency.”

In February of this year his firm launched its own cryptocurrency called ‘JPM Coin’, which is set to instantly settle transactions for its clients. Dimon himself has hinted it could in the future see consumer use. During the hearing, he reiterated he believes blockchain technology has value, not cryptocurrencies.

Charles Scharf, the CEO of BNY Mellon, was also present. He cited issues the financial institution sees surrounding cryptocurrencies, and these include know-your-customer (KYC) and anti-money laundering (AML) challenges for institutions, as well as a lack of clarity on qualified custodians.