Jensen Huang, the CEO of chip vendor Nvidia, said the reduction in crypto-mining activities of Bitcoin and altcoins has resulted in lower demand for GPUs and a parallel drop in cryptocurrencies.
Mining chip demand evaporates
Nvidia's results for the third quarter were disappointing, if not mediocre, with a sharp drop of 15% in the company's share price .
The GPU market, which was at its peak a few months ago , has now fallen to a critical level.
It should be noted that GPUs play a key role in setting up high-performance, low-cost clusters, which is great for solving problems in the digital currency mining sector.
Jensen Huang: "We were surprised"
On the one hand, the cryptocurrency markets are going through a difficult period, which is undermining the sale of GPUs.
The miners used the GPUs because they allowed to obtain a return of scale.
However, the price of bitcoin has fallen by half since December 2017, and recently it has fallen below $ 5,000. This means that GPUs are no longer profitable for mining activities.
Therefore, it will take 3 to 6 months to restore sales.
"We were as surprised as anyone. The hangover of crypto-currencies lasted longer than expected. When prices went down, we expected a faster increase in demand. "Demand has not grown as fast as expected. The offer accumulated without the company being able to stop the sale of GPU, which explains the aggressive depreciation of the quarterly result.
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