Chipmakers Nvidia, AMD Ride the Cryptocurrency Wave
Lately shares of Nvidia Corp. and Advanced Micro Devices Inc. have gained at least 14% since the beginning of June, spurred in part by about a 10-fold boom from April to June in the ethereum market, the currency that can be used to buy computing power in internet.
The link between ethereum and these Silicon Valley chipmakers?
It lies in the really powerful graphics processors, designed to make computer games more realistic, that can be used also to gain access to encrypted digital currencies.
While some of that has come from optimism around new products for other markets, analysts are projecting that sales related to cryptocurrencies will result in a spike in revenue for both companies.
The sharp increase in demand from cryptocurrency miners has rapidly depleted excess channel inventory for Nvidia and AMD graphics cards for an estimates of additional sales of $875 million.
Computer-card manufacturers, like Asustek Computer Inc., which buy chips from Nvidia and AMD, are making products specifically for the cryptocurrency-mining market, but they’re leaving off all or most of the video connections from the finished products, meaning that even if the cryptocurrency market is soon mined out, the cards will be no use to gamers and therefore less likely to cause a glut by flooding the resale market.
But Nvidia declined to comment on the cryptocurrency market opportunity. AMD said it’s sticking to its focus on gamers.
“The gaming market remains our priority,” the company said in an emailed statement, repeating what it said earlier this quarter. “We are seeing solid demand for our Polaris-based offerings in the gaming and newly resurgent cryptocurrency-mining markets based on the strong performance we are delivering.”