Nvidia crypto mining chip sales fell off a cliff this quarter
Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company’s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Even as prices for digital currencies have soared throughout 2021, Nvidia has not cashed in on making the digital “shovels” for miners.
The kind of processors that Nvidia makes, GPUs, can be used to efficiently mine ethereum by solving complicated math problems. In March, the company introduced versions of its chips specifically targeted at cryptocurrency pros called CMP.
Nvidia said on Wednesday that CMP sales declined 60% sequentially in the most recent quarter, and that sales of the product line are expected to decline to “very negligible” in the fourth quarter.
Sales of Nvidia CMP cards declined from $266 million in the quarter ending in August to $105 million in the most recent quarter, ending in October.
Adding in $155 million in CMP sales from the May quarter, the chipmaker now says it has totaled $526 million in revenue during the product’s lifetime — under 3% of the $19.27 billion in revenue the company made during that period.
The lack of traction for CMP hasn’t hurt Nvidia at all. Its stock is up over 123% year-to-date. It said on Wednesday in an earnings report that overall sales were up 50% on an annual basis and that it made $3.2 billion in one quarter selling graphics cards to gamers and PC manufacturers.
In 2018, a drop in cryptocurrency prices hurt Nvidia’s stock and sales as used graphics cards hit the used equipment market, depressing prices.
2021 is different. This year, Nvidia’s latest generation GPUs for gamers have been hard to find at retailers because they sell out so quickly, and the company warned on Wednesday that it saw “overwhelming demand” in the holiday quarter.
When Nvidia announced CMP cards in the spring, they were explicitly framed as a tool to keep GPU supply available for gamers, instead of industrial miners.
“What we hope is that the CMPs will satisfy the miners and will stay in the professional mines,” Nvidia CEO Jensen Huang said in May, adding that the product line “protects” supply for gamers.
Nvidia sees gamers as a core market, and also believes that GPUs will become standard components of every cloud server. The bull case for Nvidia doesn’t necessarily need it to become the Levi’s of the cryptocurrency gold rush — it could become a key supplier for companies who want to create a “omniverse” or online world with 3D graphics, Huang said on Wednesday.
Nvidia also added software to its gaming-centric cards to make them less well-suited for mining cryptocurrency. The company said on Wednesday that nearly all the GeForce graphics cards it sells for desktops have the software, called Lite Hash Rate, turned on, in an “effort to direct GeForce to gamers.”
Still, the company says it cannot be sure that its surging sales of graphics cards isn’t related to the cryptocurrency world.
“Our GPUs are capable of crypto mining, though we don’t have visibility into how much this impacts our overall GPU demand,” Nvidia CFO Colette Kress said on a call with analysts on Wednesday.