Q2 sales of CMP mining chips fell short of Nvidia’s forecasts. Instead of the planned revenue of $ 400 million, the company earned only $ 266 million on chips.
In the middle of last quarter, the world’s largest GPU manufacturer Nvidia predicted that in the second quarter the company’s profit from the production of special chips for cryptocurrency mining will reach $ 400 million. However, according to the income statement, during the period, chips for CMP mining were sold only for $ 266 million. The company reported higher-than-expected revenues – $ 6.5 billion in total revenue and $ 1 billion in profits.
In April and May, when a shortage of semiconductors led to a cut in chip production, Nvidia reorganized its business to focus on gamers. Then the demand from ETH miners, who use gaming video cards to mine cryptocurrencies, once again led to a rise in prices. Video cards were sold for three to four times the usual price, which pushed gamers out of the market. To change the situation, Nvidia programmatically lowered the hashrate of GeForce gaming graphics cards, making them less efficient for mining farms.
The move redirected demand from large miners to the CMP product line that the company unveiled in February. When developing Nvidia CMP, engineers optimized the chip for maximum mining efficiency. The voltage on the cores of the chip is reduced, as well as the frequencies, but the cooling is improved. In addition, these cards lack video outputs to reduce production costs. However, it is still more profitable for miners with small farms to buy gaming graphics cards, as they are much easier to sell on the secondary market.
GPU manufacturing accounts for 65% of Nvidia’s revenue, with CMP line sales accounting for just 7% of that revenue. The lower than expected demand for CMP chips may be due to the fact that video cards for ETH mining pay off slower than ASIC miners. In connection with the imminent transition of Ethereum to the Proof of Stake (PoS) consensus, large mining companies and ASIC miner manufacturers are increasing investments in ETH mining in order to have time to recoup their investments and earn money from mining before the launch of the new version of the network.
