US-based chipmaker Advanced Micro Devices (NASDAQ:AMD) said on Wednesday its revenue from graphics cards (GPUs) sold to cryptocurrency miners declined in the second quarter and is expected to remain weak in the current quarter also.
The company published upbeat quarterly financial results, which however supported recent trends among chipmakers to see declining interest from crypto miners after the recent surge in demand which led to higher prices, a shortage of GPUs in stores and a rage among gamers, who also crave for that equipment.
AMD did not disclose exact crypto-related sales figures, but noted that the revenue of its Computing and Graphics segment fell 3% quarter-on quarter to $1.09 billion, mainly due to “lower revenue from GPU products in the blockchain market”. However, it was up 64% from the same period of 2017.
“For the third quarter of 2018, AMD expects revenue to be approximately $1.7 billion, plus or minus $50 million, an increase of approximately 7 percent year-over-year, and non-GAAP gross margin to increase to approximately 38 percent, driven by the sales growth of Ryzen and EPYC products, partially offset by lower sales of GPU products in the blockchain market,” AMD said.
A recent analysis by Capital Investment Management suggested that graphics card board manufacturers are going to face a tough couple of months as interest in cryptocurrency mining is on the decline, following the drop in prices for major cryptocurrencies after the peaks at the end of last year and the beginning of this year.
In May, Nvidia, one of AMD’s major rivals, warned it expects its crypto-specific revenue for the second quarter to be about one-third of its first-quarter level.
Earlier this week, another chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC) reported strong crypto mining demand for the second quarter, but warned that demand for chips from crypto miners is likely to soften in the third quarter because of weaker prices for cryptocurrencies.
AMD Q2 results impress
However, AMD impressed investors, posting its highest quarterly net income in seven years. The net income was $116 million in April-June against a net loss of $42 million recorded the same period last year and $81 million in the previous quarter. Total revenue rose 53% year-on-year and 6% quarter-on-quarter to $1.76 billion.
In April, AMD CEO Lisa Su said that she didn’t believe the company had to worry about the decline in mining demand as it couldn’t present any significant risks for the business.
AMD’s upbeat results led to a 5.2% jump in its stock price on NASDAQ.
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