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.

Global Task Force, U.S. Tax Agency, SEC Dominate Crypto Headlines

Regulations are ruling the crypto headlines so far this week. Over the past 24 hours, we’ve learnt the Financial Action Task Force (FATF) is reportedly set to finalize new international standards for regulating cryptocurrency firms next month. The commissioner of the Internal Revenue Service (IRS) has stated his agency has “made it a priority” to issue more comprehensive crypto tax guidance “soon.” Finally, the U.S. Securities Exchange Commission (SEC) announced it would delay, once again, its decision on the VanEck and SolidX Bitcoin exchange-traded fund (ETF) proposal.

At the time of writing, bitcoin (BTC) and ether (ETH) are trading at $7,945.4 and $252.9; a 0.54% and 0.83% jump over the past 24 hours, respectively. As for the MVIS CryptoCompare Digital Assets 10 Index, it is currently tracking at 3,822.7 (-0.6%).

Global Standards for Regulating Crypto Firms Next Month

According to reports from CoinDesk, the FATF is set to finalize new international standards for regulating cryptocurrency firms next month. These standards, they report, are widely expected to subject crypto exchanges, wallet providers, and other businesses to the “travel rule” – a colloquial term given to a rule found in the Bank Secrecy Act (BSA) that requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution.

Introduced in 1996 in the U.S., the “travel rule” is designed to help law enforcement agencies detect, investigate, and prosecute money laundering and other financial crimes by preserving an information trail about persons sending and receiving funds through funds transfer systems. The arrival of such international standards would go beyond the basic know-your-customer requirements that are widely enforced in the crypto space at present.

IRS Commissioner: More Detailed Crypto Tax Guidance ‘A Priority’

According to letter from IRS Commissioner Charles P. Rettig dated May 16, the agency has “made it a priority” to issue a more comprehensive tax guidance for cryptocurrencies. The Commissioner’s letter was written in response to a request from 21 Congressmen to provide clarity on tax treatment in relation to cryptocurrency holdings.

In 2014, the U.S. tax agency issued a guidance for cryptocurrency. In his May 16 response letter, Rettig revealed the IRS will “soon” issue more robust guidance. “I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions,” the Commissioner wrote.

SEC Delays Decision on VanEck SolidX Bitcoin ETF

The SEC announced the postponement of a decision regarding the VanEck SolidX bitcoin ETF proposal. The postponed ETF proposal was initially filed over a year ago. In January – amid the U.S. Government shutdown – it was withdrawn, only to be resubmitted later that month. On March 29, the commission delayed the joint proposal for the first time. The SEC must announce its decision – or, for the final possible time, postpone its decision – on the proposed bitcoin ETF no later than August 19.

Notably, the U.S. investor watchdog is seeking comments from the public in relation to the proposed VanEck SolidX bitcoin ETF. To guide commentary, they included fourteen questions in Monday’s filing. Comments must be submitted within the following 21 days, whilst rebuttals to said comments are due within the next 35 days.