As the cryptocurrency is still showing volatile tendencies, the mining business has been one of the most affected ones: the activity, once very lucrative and attractive when, say, each BTC was worth nearly $20,000, is now less enticing as the world’s leading crypto asset is still struggling in the $3,500 range. Mining can still be a very profitable activity, just not as much as a year ago.
That development has naturally affected companies that manufacture pieces of equipment for mining, like GPU (Graphics Processing Unit) producers and semiconductor firms. Such is the outlook for the market-leading (along with Intel) AMD: analysts in the industry have recently warned that the enterprise could suffer the “crypto hangover” effect for a while.
Advanced Micro Devices (AMD) is currently awaiting the release of its Q4 report, which is coming in the next few days. The analysts say that problems could present themselves for the famous company, according to a note from business portal MarketWatch on January 25th.
Low Retail Prices
Christopher Rolland, a financial expert at Susquehanna (an international quantitative trading firm,) defended AMD, saying that the company has managed expectations in an efficient way. However, the lower retail prices for GPU items are bound to cause issues. For example, one of miner’s most popular “toys,” the AMD’s popular Radeon RX580 GPU, is now being offered at $180, which is significantly down from the $550 it cost in February, nearly a year ago.
According to analyst Matthew Ramsay, “following a messy Q3 that saw a material impact from near-term GPU channel sell-in challenges, we believe inventory impacts could linger to start the year, and model Q1 2019 slightly below consensus.”
AMD CEO Lisa Su had previously alerted the community about the situation and provided a forecast after the company released the report of the Q3: “Client and server processor sales increased significantly although graphics channel sales were lower in the quarter. We are expecting that it might take a couple quarters to completely get back to a normal channel.”
It is no secret that the cryptocurrency markets experienced a turn for the worst in 2018. Bitcoin started the year at nearly $20,000 and closed it hovering between $3,500 and $4,000, and top altcoins never quite recovered to pre-collapse levels. That outlook heavily affected GPU producers like AMD and Nvidia: because of the market’s volatility, there was a sharp decrease in profitability in the crypto mining field, and low prices resulted in a disappearance in crypto-related sales.
A little bit more about AMD
With 49 years in the market (having been founded on May 1st, 1969) AMD (Advanced Micro Devices) is one of the veterans in the tech industry, being known as a semiconductor company. Its headquarters are in Santa Clara (California) and Austin (Texas,) both in the United States of America.
The firm develops computer processors and related items for consumer and business markets. Its primary offerings to the market include microprocessors, motherboard chipsets, embedded processors, and graphics processors. It is only surpassed by Intel in its field.
By Andres Chavez