Responding to strong market demand, AMD is planning to increase production of graphics cards which are currently in short supply. The recently launched RX Vega GPUs have virtually disappeared from shelves, with crypto mining gaining popularity among investors and enthusiasts. The revenue from the company’s Graphics Division has reached almost a billion dollars in the last quarter of 2017. Recognizing the shortages, AMD is trying to satisfy both gamers and miners.
More GPU Power Needed
Increasing interest in cryptocurrency mining during the past year has compelled companies like AMD to address the rising demand for hardware components. Skyrocketing prices of bitcoin and the other cryptos have lured many new investors and ordinary enthusiasts into the mining business. GPUs are used to mine altcoins like Ethereum and Monero which require more moderate computing power.
The miners’ appetite has forced Nvidia, AMD’s main competitor, to take steps to ensure gamers have a chance to get hold of its video processors. It recently asked retailors to limit the number of graphics cards that can be purchased at a time. AMD also admitted that its Radeon cards were in short supply and acknowledged that mining applications were responsible for the shortfall. Promising to increase production, the company hopes to satisfy the growing demand without disappointing any of its customers.
“The graphics channel is very low, and we are certainly working to replenish that environment”, said CEO Dr. Lisa Su, quoted by Polygon. Because the availability of graphics cards is “lower than we would like it to be,” she added:
We are ramping up production.
Her announcement represents a sharp turn after last fall when Lisa Su predicted that the demand from cryptocurrency miners would start to level off in Q4. “As we look at it,[crypto-related demand] continues to be a factor, but we’ve seen restocking in the channels and stuff like that. So we’re being a little bit conservative on the cryptocurrency side of the equation,” she said in October.
Speaking to investors during a conference call, Dr. Su presented the latest corporate earnings report, referring to the cryptocurrency mining market as a good part of AMD’s business. Advanced Micro Devices has announced $1.48 billion USD of revenue in the fourth quarter of 2017. $958 million of that total came from its Computing and Graphics division, where the year-on-year increase reached 60%. Sales of graphics cards, like the new Vega 56 and Vega 64, have been a key factor.
Short on Memory Though
Other important players may influence AMD’s ability to make good on its promises to satisfy gamers and miners. While ramping up production, the company must take into account the already recognized shortages of RAM. GDDR5 and HBM2 – the two main types of memory used in its RX 400, 500 and the new RX Vega graphics cards – are also undersupplied. In that respect, AMD’s management assured investors and customers it would work with its partners to overcome the deficit.
Retailers also have a say when it comes to priorities on the GPU market. Some of them have already signaled their intention to implement their own measures to prevent cryptocurrency miners from buying the bulk of the available graphics cards. They simply want to make sure that gamers get their share of the stock.
Another crucial factor is the fluctuating demand for mining equipment that tends to follow the ups and downs of the cryptocurrency market. The profitability of mining operations is highly dependent on the rates of the mined coins, as their prices affect the rate of return of mining projects.
Do you think demand for cryptocurrency mining components will grow in 2018? Tell us in the comments section below.