6 Replies Latest reply on Mar 17, 2018 1:12 AM by brucer

    Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD

    kingfish

      New data on the GPU market has put formal numbers behind the visible impact of cryptocurrency mining on GPU prices. Unfortunately, we’ve also got fresh information suggesting the GPU price inflation cycle isn’t ending any time soon.

      Jon Peddie Research has released data on GPU sales in Q4 2017 showing that GPU shipments decreased 1.5 percent in Q4, in-line with normal seasonal expectations. Year-to-year GPU shipments decreased by 4.8 percent, driven mostly by declines in laptop shipments (desktop dropped 2 percent, but notebooks fell 7 percent).

      PR-1

      AMD’s market share rose by eight percent from Q3 to Q4 2017, suggesting an explanation for why Vega and Polaris chips are so over-priced (we noted this in our coverage earlier this week). If cryptocurrency miners are preferring Vega over Nvidia’s Pascal, it would explain why prices on AMD cards are blown sky-high — it reflects increased demand for those parts. JPR notes, “Over three million add-in boards (AIBs) were sold to cryptocurrency miners worth $776 million in 2017. AMD was the primary benefactor of those sales.”

      We can make some very rough estimates about how many additional GPUs AMD might have sold by referring back to some previously published figures about AMD’s graphics sales. In November 2016, JPR also released a chart with quarterly graphics sales for AMD:

      JPR-QuarterlyShipments

      If we assume that AMD’s RX 500 and Vega launches pushed its quarterly GPU sales back to an average of 4.9 million units shipped per quarter, that would work out to ~19.6 million GPUs shipped per year. If we treat the cryptocurrency sales as an adjunct to gaming sales (as JPR suggests) it means those 3 million additional shipments are a feather in AMD’s cap. But they aren’t driving enormous profits to the company, given its contracted GPU prices weren’t calibrated to account for enormous price inflation.

      There’s another reason we included this graph. Back in 2014, we speculated that the surge in AMD GPU prices could ultimately harm the company long term. As its share of the gaming market fell, it lost the opportunity to put brand-new Hawaii cards in the hands of gamers at a time when it was quite competitive (or even superior) to Nvidia on raw performance. And as the graph above shows, that’s exactly what happened. High prices on AMD GPUs drove sales down, and by the time the market prices were stabilizing, Maxwell cards were hitting the streets.

      “Gaming has been and will continue to be the primary driver for GPU sales, augmented by the demand from cryptocurrency miners.,” said Dr. Jon Peddie, president of Jon Peddie research. “We expect demand to slacken from the miners as margins drop in response increasingly utilities costs and supply and demand forces that drive up AIB prices. Gamers can offset those costs by mining when not gaming, but prices will not drop in the near future.”

      JPR-2

      Discrete GPUs shipped in 36.88 percent of all PCs, down 2.67 percent from the previous quarter and JPR’s assertion on long-term price trends seems to confirm what Massdrop said earlier this week. Gamers hoping for a quick resolution to this issue would be best-served by looking elsewhere, whether that means taking a chance on a used GPU, investigating using an AMD APU, or optimizing games to squeeze the most performance possible out of your current card.

       

      Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD - ExtremeTech

        • Re: Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD
          ajlueke

          It's a shame.  Part of the intent behind Polaris was to bring VR level gaming down to the $200 price point.  Definitely tough to be a gamer right now, especially if your GPU croaks.  Buying one of the major consoles would be far and away cheaper than updating a GPU at these prices.

          1 of 1 people found this helpful
            • Re: Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD
              pokester

              This industry has got to come up with a way for a person to buy at least one card card at suggested retail price or better. If they don't it can only hurt PC gaming in general. Get those premiums on the miners only. You would think some kind of rebate program that returns the difference in price and suggested price, limit on or two per household would be very doable. It really makes me wonder how much they really WANT to even fix the issue? Some sellers like Micro Center and Best Buy seemed to be doing better again but their prices are way high again now too.  I have heard some success stories of people buying cards with other hardware and telling them they are building a system and Micro Center offering them a better price. Never hurts to ask, or ask manager if the regular associate says no. 

                • Re: Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD
                  ajlueke

                  It mostly hurts AMD long term.  I don't imagine that crypto currency mining on GPUs will continue indefinitely, as someone will eventually develop a better mousetrap ala Samsung and Bitcoin.

                   

                  What it does do, is hurt AMD in the gaming space, as their install base will continue to decline and developers turn more and more to Gameworks and NVidia hardware.  The only thing preventing that from happening now is the AMD hardware inside the major consoles.

                   

                  The real problem is really the miners themselves either.  It's the resellers.  Resellers know that miners would buy up every GPU they can get their hands on, so they buy them first and inflate the price to what the market will tolerate.  To combat the resellers, the primary distributors (Best Buy, Newegg, Amazon etc.) then raise their prices to the same level.  They figure the end user is going to pay it regardless, so they may as well pocket the profits versus some schmo who is making money by contributing nothing to society (Just like the miners themselves, but that is another rant).

                   

                  I guess the resellers could monitor your purchases via your account, and your first two AMD GPU purchases at any SKU would be at MSRP, and any subsequent purchases would be at the elevated market price.  SKUs that have high inventory could be exempt and sell at MSRP.  The purchases could fall off your account in a rolling 6 month/year timeframe.  Of course, AMD would need to get all major resellers on board for the program to be effective.

                    • Re: Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD
                      pokester

                      Or just get the retailers to agree to do 1 or 2 as a rebate. Those rebate houses keep track of what addresses have filed for rebates. Yes there would still be abuse there too, but not as bad as it is now.

                        • Re: Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD
                          brucer

                          Better yet..  Do like many firearm manufacturers do.. AMD licenses its retailers,  sets a maximum retail price that you can sell their products for, and retailer gets a specific profit margin.. If retailer gets caught selling over the specific set maximum price, retailer doesnt get to sell AMD products anymore..  Amd could set a maximum order amount per customer or household, but dont know how they could set a specific number for a household..I have many friends that arent into computers and they own credit cards and would happily purchase a gpu in their name and me just pay them on the spot for it.. which I've already done..

                           

                          Could nvidia's GPP be something of this sort?

                           

                           

                          What I dont care for.. and dont get me wrong, I do some mining...  When AMD or Nvidia both, bows down to a company that wants to order thousands of gpu's and fulfills those orders and leaves a short supply..

                  • Re: Cryptocurrency Miners Bought $776M in GPUs in 2017, Mostly From AMD
                    redteam6

                    "Well son I remember when AMD sold their cards to gamers....It was a glorious time to be alive."

                      "Dad, you mean they actually had dedicated graphics cards for gamers? And you didnt have to rely on

                      Apus?"

                      "Yes son, and the mid range cards were $200 dollars"