Gigabyte and Asus Struggle to Unload Excess Mining Hardware
Right now, the major news across the world is the plummeting value of Bitcoin, which seems to have no end in sight. But while the focus is on investors scrambling to get rid of their cryptocurrency or holding on for dear life, hardware manufacturers are also taking part in the beat down. Due to last year’s optimism in the crypto industry, manufacturers were hyped about the profit they stood to gain from selling graphics card and motherboards that they produced them in excess. Unfortunately, the optimism has all but turned into pessimism, and these manufacturers have been left holding the bag.
Gigabyte and Asus are reportedly finding it difficult to sell off their “excess hardware stock” thanks in part to the dwindling interest in mining and virtual currencies.
Taiwanese manufacturers, who were deceived by the temporary bullish run in the crypto market, upped the production of mining hardware at the start of the year. However, things have now taken a turn for the worse as interest in getting new mining hardware seems to be the last thing on the mind of miners. Never-ending complications from the US-China trade war and a sudden dip in the price of cryptocurrency are some of the reasons why interest have cooled.
Earning reports from both companies have painted a grim picture of how terribly they have been hit by a slump in cryptocurrency prices. “Asus saw a 43 percent drop in earnings in Q3 compared to last year, and Gigabyte recorded its lowest quarterly level since 2008.” MSI, which posted a “6.6 percent loss for Q3 year-over-year,” appears to be the only hardware manufacturer that is doing okay.
The surplus in hardware is not only limited to manufacturers in Taiwan.
In a recent report, Nvidia announced that the sale of its graphics card has suffered a huge decline. So severe was the loss that it led the company to cut all ties with the mining business. As Collette Kress, the CFO of Nvidia, puts it: “We believe we have reached a normal period as we are looking forward to essentially no cryptocurrency as we move forward.”
AMD is currently in the middle of a push to offload its mining hardware. The company launched a “promotional explainer page” recently to “familiarize people with the various use cases and applications for blockchain.” Only time will tell if the project will be successful.
Thanks to the loss of interest in cryptocurrency and mining, hardware manufacturers – Asus and Gigabyte – have been left with tons of excess mining hardware, which they are struggling to offload. This has led to Asus to record a 43 percent drop in its Q3 earnings when compared to last year, while Gigabyte saw its lowest quarterly level since 2008.
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