It's no secret that NVIDIA and Advanced Micro Devices (AMD), the only two manufacturers of high-end GPUs, have increased their processor profits thanks to the cryptocurrency boom. Their processors are used to mine cryptocurrencies such as Ethereum and ZCash, which are created by running calculations on GPUs.
However, in recent months, cryptocurrency prices have decreased, new specialized equipment for mining these cryptocurrencies has appeared, and demand for processors has decreased significantly.
According to a study by BlueFin Research Partners, sales of NVIDIA graphics cards in North America in the second quarter of 2018 decreased by 50% when compared with the figures for the first quarter. For AMD, the situation looks even worse; the company sold only 35-40% of volumes in the first quarter. Such indicators are explained by the fact that AMD initially had a larger market share, since its processors were applicable to the mining of a larger number of different types of cryptocurrencies. While both companies have been hurt by the cryptocurrency market, there is one additional risk for AMD that investors should pay attention to.
NVIDIA's current gaming CG looks much more competitive than AMD's. NVIDIA's high-end graphics cards (GeForce GTX 1080 Ti and Titan Xp) have no direct competition from AMD, and AMD's high-end RX Vega 56 and RX Vega 64 graphics cards are on par with NVIDIA's GeForce GTX 1070 Ti and GeForce GTX 1080 cards.
However, since the die size of the Vega processor chips AMD's 56/64 is much larger than the GeForce GTX 1070 Ti/1080, and since the Vega cards use much more expensive HBM2 memory, NVIDIA's cost structure for its products is significantly better than competing parts from AMD, potentially giving NVIDIA some flexibility to lower prices to levels AMD can't afford.
So, if demand for graphics cards declines significantly across the entire cryptocurrency industry, it is clear that NVIDIA will be more aggressive in trying to grab a share of the gaming community to try to soften the blow from the decline in demand for GPUs for mining.
According to fool.com
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