Nvidia Posts Record Q3 Earnings, Sales of GPUs to Crypto Miners Reach $175 Million

[FrgMstr]

Who are NVIDIA selling Asics to?

Nvidia Posts Record Q3 Earnings, Sales of GPUs to Crypto Miners Reach $175 Million

https://news.bitcoin.com/nvidia-pos...s-of-gpus-to-crypto-miners-reach-175-million/

Nvidia released its earnings for the third fiscal quarter of 2021 this week, showing better-than-expected results, driven by sales of its graphics processing unit (GPU) chips. The firm reported graphics segment revenue of $2.79 billion for the quarter, beating analyst estimates of $2.1 billion.

Within the graphics segment also falls the gaming division. Nvidia said that its new line of graphics cards based on a new technology called Ampere drew strong interest from computer and videogame console developers. For example, one of the new models, the Geforce RTX 3080, went on sale in September and sold out immediately.

Nvidia said gaming revenue climbed 37% year-on-year to $2.27 billion, a record for the company.

The graphics processing units produced by Nvidia are mainly used in video game consoles and graphics cards but they have also become popular with cryptocurrency miners, particularly those extracting coins like ethereum (ETH), monero (XMR), and zcash (ZEC).

For the quarter in review, Nvidia sold at least $175 million worth of new generation GPUs to ethereum miners, helping the outperformance, according to a note from RBC Capital Markets analyst Mitch Steves. The analyst had guided sales to miners to come in at $150 million for the quarter.

Steves noted that the upcoming network upgrade of the Ethereum blockchain, also known as Ethereum 2.0, which is scheduled to take place sometime in December, demands that miners switch over to more efficient mining hardware. Nvidia’s new Ampere GPU chips are thought to meet that need.

However, GPUs are no longer effective for mining bitcoin (BTC), which has moved on to more efficient application-specific integrated circuit (ASIC) miners.

 

[Verado]

And that is the real reason you guys are wearing out your F5 buttons.

 

[FrgMstr]

I have been saying that NVIDIA abandoned the TAM, when in fact NVIDIA abandoned the gamers.

 

[Lakados]

I have been saying that NVIDIA abandoned the TAM, when in fact NVIDIA abandoned the gamers.

The only people they didn’t abandon was their share holders. They’ve been pushing for more profitable markets and the gaming arena which with competitors thins out the margins. I really hope DirectML takes off as a viable CUDA alternative because I would love to punish NVidia for this action.

 

[LukeTbk]

If those numbers are true, that does not match the idea they shipped 50k cards at launch and so on, they are probably already over 3 millions card sold already, edit: Not card just the ASIC and maybe less depending on the data center and other business. Same goes with all the talk that mining is dead and irrelevant, if personal mining at home is, does not mean that more professional affair is.

That sound enough to explain most of what is going on and could explain why outside the USA the AMD launch feel even worst than Nvidia, if the early rumors they can even better $/watt wise (most place do not even bother to show the card being out of stock, just not listed at all).

 

[LukeTbk]

The only people they didn’t abandon was their share holders.

And one could assume their best largests clients, and in miners case I can imagine getting the cards a month after another clients is a really big deal.

 

[FrgMstr]

Not knowing exactly which asic was sold to miners, 500k would be a good round number. Verified with an AIB contact as well.

Big miners don't buy cards any more, they buy ASIC direct and build their own.

This will piss off AIBs as well.

 

[Deleted whining member 223597]

Analyst estimates are now 100% fact? Sounds like people are jumping to conclusions again.

 

[FrgMstr]

Analyst estimates are now 100% fact? Sounds like people are jumping to conclusions again.

I 100% believe this report.

There have been signs of 100s of thousands of NV ASICs moving into the channel over the past months that never appeared, and now I know why.

 

[5150Joker]

This is less than 10% of the gaming revenue. Are we going to pretend this is a significant number?

 

[whateverer]

And the man who used to provide us investigative insights is now reduced to posting unverified rumors?

 

[FrgMstr]

And the man who used to provide us investigative insights iis now reduced to posting unverified rumors?

I posted this because some of this is starting to make sense to me now.

Edit:. I have seen so many movements going on in the industry that pointed to ASICs on the way to gamers, but those never showed up in the retail channel. This makes tons of sense and I will look more into it.

I still have not seen or heard anything solid on bad yields from Samsung. And I would have expected NV to throw Samsung under the bus during that earnings call if that were the case. Nothing points to bad yields in the numbers.

So if don't like my insight, fine. But if that is all you have to contribute to the conversation, stay out of my thread.

 

[whateverer]

I posted this because some of this is starting to make sense to me now.

Edit:. I have seen so many movements going on in the industry that pointed to ASICs on the way to gamers, but those never showed up in the retail channel. This makes tons of sense and I will look more into it.

I still have not seen or heard anything solid on bad yields from Samsung. And I would have expected NV to throw Samsung under the bus during that earnings call if that were the case. Nothing points to bad yields in the numbers.

So if don't like my insight, fine. But if that is all you have to contribute to the conversation, stay out of my thread.

Well yes, the higher earning with no criticism of Samsung immediately told me that it was not Samsung. if anything, it could just be the unprecedented combination of Gaming demand PLUS Etherium demand.

Remember, NVIDIA has never had to deal with Normal consumer demand Plus a mining Rush on release of any of their previous cards (the GTX 1070 rush came a year after launch)

https://www.tomshardware.com/news/gpu-prices-increase-ethereum-cryptocurrency,34865.html

I liken this to the 290x's disappearing act,, because it is the closest card launch to the 3080 (in terms of mining PLUS consumer demand ), so I would expect it tio be similarly impossible to find!

 

[cdabc123]

I 100% believe this report.

There have been signs of 100s of thousands of NV ASICs moving into the channel over the past months that never appeared, and now I know why.

I dont believe most of this can be attributed to mining. There are very few coins that are terribly profitable and ether only is with its recent price jump. Additionally there are asics out there for ether already.

Do you have information on asics nvidia is pursuing? That would be very interesting if they were pursuing asics for anything other then mining and they really dont seem like the type of company to pursue mining asics

 

[BBQisGood]

The bitcoin .com and barrons .com articles posit an interesting theory but looking for the originating source, RBC analyst Mtich Steves, does not turn much other than other news outfits summarizing the opinions of the market analysts.
However there is a summary of analysts, including Steves, and their thoughts on the Q3 Earnings report at: https://finance.yahoo.com/news/nvidia-analysts-upbeat-following-impressive-191556935.html

RBC's Key Takeaways From Earnings Call: Core Data Center revenue, excluding Mellanox, is expected to be up mid-single digits quarter-over-quarter, Steves said.

Mellanox represented about 13% or $600 million of Nvidia's revenues in the third quarter. The analyst expects Mellanox revenues to be closer to $500 million in the fourth quarter.

Nvidia indicated Gaming revenues, which increased 37% both year-over-year and sequentially, are not seeing meaningful contribution from cryptocurrency mining sales, the analyst said.

The guidance implied operating margin of over 40% in the fourth quarter after the 40% mark in the third quarter.

"While the gross margin guidance was a bit lower than expected we see no change to the long-term NVDA thesis," the analyst said.

So sounds like selling to miners might be happening, but does not particularly support the idea that the company is favoring sales which end up at end-point customer miners over sales which end up at end-point customer gamers.

 

[Lakados]

Not knowing exactly which asic was sold to miners, 500k would be a good round number. Verified with an AIB contact as well.

Big miners don't buy cards any more, they buy ASIC direct and build their own.

This will piss off AIBs as well.

I’m not too sure how much it will anger them as most of the big miners will design their own boards but likely still have to contract out the manufacturing to them anyways.

 

[Lakados]

The bitcoin .com and barrons .com articles posit an interesting theory but looking for the originating source, RBC analyst Mtich Steves, does not turn much other than other news outfits summarizing the opinions of the market analysts.
However there is a summary of analysts, including Steves, and their thoughts on the Q3 Earnings report at: https://finance.yahoo.com/news/nvidia-analysts-upbeat-following-impressive-191556935.html

So sounds like selling to miners might be happening, but does not particularly support the idea that the company is favoring sales which end up at end-point customer miners over sales which end up at end-point customer gamers.

Higher margins, and if they didn’t jump on it then AMD or somebody else does. And if NVidia gets their stuff in early and they build their systems for NVidia’s AISC parts it becomes hard to move away from them. It guarantees a solid revenue stream for the next decade.

 

[FrgMstr]

So signs

So sounds like selling to miners might be happening, but does not particularly support the idea that the company is favoring sales which end up at end-point customer miners over sales which end up at end-point customer gamers.

By my information, NVIDIA had sold less than 100K 3080/90 globally to date. Estimated 500K to miners. You make up your own mind.

 

[cdabc123]

To make matters potentially worse for the crunch of GPU supply, Bitcoin is having another massive run, this chart is the past 8 years, and you can see what it's approaching its previous historical high of early 2018.

View attachment 301657

Crypto is running abit right now. However profitability still isnt close to what it was. I think the issue is these cards have a resale value higher or close too there price making them a lucrative buy wither or not anyone plans to mine on them.

 

[Zarathustra[H]]

So, Nvidia is happy to profit from cryptominers, but they are unlikely to make the same mistake they made last time, increasing production to try to chase the market, because they got stuck with so much leftover inventory.

So this time, they are just happy to let supplies languish, make their products impossible to find on the market, and instead crank up prices to earn more per unit.

Does that about sum it up?

I really fucking hate miners.

 

[Zarathustra[H]]

To make matters potentially worse for the crunch of GPU supply, Bitcoin is having another massive upswing, which means trickle-down profitability improvement for GPU mining. This 8-year chart shows what's now happening as BTC approaches its previous historical high.

The people that casually ran Nicehash in 2017/2018 on their gaming PC's and always post "GPU mining is dead bro" have not been paying attention.

View attachment 301657

It will crash again, and the HODL trolls will disappear crying into their lairs.

Non government backed "currencies" simply will never work, crypto or not.

In the mean time everyone will feel the pain, because of these misguided crypto-bro's.

It's a crying shame.

 

[DPI]

Crypto is running abit right now. However profitability still isnt close to what it was. I think the issue is these cards have a resale value higher or close too there price making them a lucrative buy wither or not anyone plans to mine on them.

Profitability is moving in the direction of what it was, was my point. And based on posts I read, many people fundamentally don't understand how mining farms determine ROI -- they believe "a card ROI's when it pays for itself". In reality, a card only has to beat depreciation - that's the ROI point. So if a farm purchases a quantity of GPU's @ $300ea., they don't get thrown away in the trash when decommissioned, they get sold/dumped for let's say $189ea., making $111 the depreciation and ROI point. Obviously there are more nuances to the calculus since there are other variables in constant flux, but that's the biggest basic misunderstanding I see over and over.

To be clear I'm not endorsing mining, and wouldn't ever tie up capital in GPU's again for that purpose, mostly because I've found better ways to grow money. However If BTC continues its climb, the bad GPU stock situation will get even worse and eBay prices of GPU's will climb even higher - particularly for Ampere (RX6000, fortunately for gamers, aren't as profitable due to their slower memory). Plan accordingly.

 

[cdabc123]

Profitability is moving in the direction of what it was, was my point. And based on posts I read, many people fundamentally don't understand how mining farms determine ROI -- they believe "a card ROI's when it pays for itself". In reality, a card only has to beat depreciation - that's the ROI point. So if a farm purchases a quantity of GPU's @ $300ea., they don't get thrown away in the trash when decommissioned, they get sold/dumped for let's say $189ea., making $111 the depreciation and ROI point. Obviously there are more nuances to the calculus since there are other variables in constant flux, but that's the biggest basic misunderstanding I see over and over.

To be clear I'm not endorsing mining, and wouldn't ever tie up capital in GPU's again for that purpose, mostly because I've found better ways to grow money. However If BTC continues its climb, the bad GPU stock situation will get even worse and eBay prices of GPU's will climb even higher - particularly for Ampere (RX6000, fortunately for gamers, aren't as profitable due to their slower memory). Plan accordingly.

I'm familiar with the roi situation with crypto I used to be heavily into mining. Last burst of people mining didnt happen till well after mining remained profitable (3-6 month roi) for a good portion of they year. Planing on it it moving towards profitability is a foolish investment as you could make that differance just trading the crypto.

Another differance from last time is there is currently only a small handful of coins worth mining last time there were dozens which drew people in overtime.

Sure btc is moving up but dont assume crypto is a free market. It will hit plenty of resistance if it gets high enough as some people are trading extreme quantities of these coins.

No farm is buying gpus to mine ether. Its easy enough to get asics for that coin. However many people are buying any 3xxx series card they can and if its worthwhile to throw it at a crypto when they get it in sure it will happen.

I am more interested in the claim nvidia is pursuing asics. Being short on fab capacity makes me highly skeptical that nvidia would push out crypto asics. I would be interested if they were pursuing asics for other larger feilds however.

 

[GoodBoy]

So signs

By my information, NVIDIA had sold less than 100K 3080/90 globally to date. Estimated 500K to miners. You make up your own mind.

The 175 million, if we estimate a cost of the chip/memory at $550, comes out to 318,000 sold to miners. If the cost is less or they aren't buying the vram, then the quantity would be higher, probably 500,000 at a $350 each cost.

But why would they sell so much to miners, when they can make even more selling the video card? They make some amount on the chip itself, but the video cards sell for hundreds more.

It will keep miners away from GPU sales, but the ratio seems out of whack.

Insufficient heatsink supply? Partner cards wouldn't be affected by this... so not that.

Maybe they are selling them asics that would be at a 3060 quality-level... getting rid of the lower performing chips this way, but that would mean the yields are crappy. And that model isn't even for sale yet, so also seems unlikely.

The good news is, if the estimates are correct, 500k to miners, 100k to videocards, then they are cranking out ~600k chips every 3 months, or 200,000 chips a month. How many damn more do miners need... Should be easy to direct chips to video cards and quickly load up the market. Which would make sense since it's the Christmas shopping season. If they do this the stock should show up any day now.

Edit: If they can charge a higher price for just the chip to miners, then this makes a lot more sense. Also, getting the miners satisfied up front makes overall demand for the chip easier to predict, and prevent another 1080Ti-style market flood (in the channel).

 

[erek]

I 100% believe this report.

There have been signs of 100s of thousands of NV ASICs moving into the channel over the past months that never appeared, and now I know why.

big miners have the capacity to build out their own PCBs and so forth specially for mining?

does any of those numbers go into the Data Center systems?

 

[FrgMstr]

ON TOPIC PLEASE

 

[cdabc123]

Steves noted that the upcoming network upgrade of the Ethereum blockchain, also known as Ethereum 2.0, which is scheduled to take place sometime in December, demands that miners switch over to more efficient mining hardware. Nvidia’s new Ampere GPU chips are thought to meet that need.

Mr Steves is mistaken, Ethereum 2.0 is a shift away from needing "efficient" hardware as it assigns weight to the nodes reducing the need for compute based verification.

On cryptos that utilize staking it normally doesnt take more then a decent CPU (and funds backing the node) to profitably "mine" the crypto.

 

[FrgMstr]

Mr Steves is mistaken, Ethereum 2.0 is a shift away from needing "efficient" hardware as it assigns weight to the nodes reducing the need for compute based verification.

On cryptos that utilize staking it normally doesnt take more then a decent CPU (and funds backing the node) to profitably "mine" the crypto.

I would not be versed enough to know that. What I do know is that NVIDIA produced a lot of ASICs that never got to gamers' hands.

 

[Sir Beregond]

I have been saying that NVIDIA abandoned the TAM, when in fact NVIDIA abandoned the gamers.

All the gamer is to Nvidia now is a demographic to milk. Can't tell you how many arguments I've had with people on other forums when they keep going on and on about non-gaming uses for these cards to justify the price inflations. Meanwhile I am thinking they are still calling them "GeForce" cards. Looks to me like gamers are getting screwed.

 

[FrgMstr]

I am going to repost this, from another thread here as it has to do with exactly this conversation.

And with @FrgMstr's reveal, or at least informed opinion that nVidia was caught selling over 500K units to miners and a measely 100K units to the regular Joe, what is to say AMD doesn't pull the same shit?

I would suggest to you that is not AMD's gameplan. 6800 cards are nerfed for high-end mining (about 60 hash). AMD is jumping through hoops to make sure gamer GPUs get to gamers. Selling to miners does nothing for its brand or mindshare. For AMD to move forward in the gaming market it knows it has to sell cards to gamers.

They next big hurdle that AMD is going to have to deal with is AIB custom card pricing. Since NV has left a gaping hole in the gamer card market, AIBs are going to be charging premiums for everything it can bring to market. AIBs are not happy with NV right now at all. NVIDIA has had a disastrous effect on their Q4 revenues. NV continues to be the 800lb gorilla that can't be pushed around and AMD surely wants to take that gorilla down a few weight classes. Right now, the first way it can start to chip away at that is get the AIBs every possible 6800 ASIC it can deliver. That is why AMD is shipping ASICs daily through Q4.

 

[cdabc123]

I am going to repost this, from another thread here as it has to do with exactly this conversation.


I would suggest to you that is not AMD's gameplan. 6800 cards are nerfed for high-end mining (about 60 hash). AMD is jumping through hoops to make sure gamer GPUs get to gamers. Selling to miners does nothing for its brand or mindshare. For AMD to move forward in the gaming market it knows it has to sell cards to gamers.

They next big hurdle that AMD is going to have to deal with is AIB custom card pricing. Since NV has left a gaping hole in the gamer card market, AIBs are going to be charging premiums for everything it can bring to market. AIBs are not happy with NV right now at all. NVIDIA has had a disastrous effect on their Q4 revenues. NV continues to be the 800lb gorilla that can't be pushed around and AMD surely wants to take that gorilla down a few weight classes. Right now, the first way it can start to chip away at that is get the AIBs every possible 6800 ASIC it can deliver. That is why AMD is shipping ASICs daily through Q4.

Is the "nerfing" not solely due too the vram setup of the different cards? Doesn't sound like it was intentional to stop miners amd was just able to place there cards in a better market segment with a larger amount of slower vram then nvidias solutions.

I would completely agree amd is doing a far better job appeasing aibs. That should pay off for them in the long run and I personally dont have much of a issue with aibs overcharging for cards. Doing such would keep that extra profit in the industry (as opposed to scalpers) and may motivate some more advanced pcb designs. That could be beneficial to heavy overclocking cards as unlike nvidia amds offerings are not at the edge if their abilities. The market will eventually correct itself as stock gets pushed.

 

[FrgMstr]

Is the "nerfing" not solely due too the vram setup of the different cards? Doesn't sound like it was intentional to stop miners amd was just able to place there cards in a better market segment with a larger amount of slower vram then nvidias solutions.

I was not given specifics, so I don't know, but I would understand why you would not want that information out there. On the contrary from what I have been told by AIBs. AIBs have told me that AMD intentionally nerfed 6800 cards so that they would not be highly sought out by miners. So you can read into that what you want, but I know I was told exactly that.

I would completely agree amd is doing a far better job appeasing aibs. That should pay off for them in the long run and I personally dont have much of a issue with aibs overcharging for cards. Doing such would keep that extra profit in the industry (as opposed to scalpers) and may motivate some more advanced pcb designs. That could be beneficial to heavy overclocking cards as unlike nvidia amds offerings are not at the edge if their abilities. The market will eventually correct itself as stock gets pushed.

Sadly AMD is at the mercy of the market that NVIDIA has left in its wake by not supplying ASICs to AIBs for gaming cards. I pretty much agree with everything you say here.

 

[Sir Beregond]

But
...but my nvidia loyalty?!!! that is nthing to them?!?!?!

 

[cdabc123]

I was not given specifics, so I don't know, but I would understand why you would not want that information out there. On the contrary from what I have been told by AIBs. AIBs have told me that AMD intentionally nerfed 6800 cards so that they would not be highly sought out by miners. So you can read into that what you want, but I know I was told exactly that.

Im not denying the possibility either, giving the current mining scene it would not be a difficult thing to implement. I would imagine if it was the case it would be implemented on the driver level as well which is definitely something you would want to keep quiet (nobody likes software nerfed things). I just looked at mining performance and assumed that the hashrate difference looked pretty similar to the difference in memory performance especially for a coin like ethereum.

Sadly AMD is at the mercy of the market that NVIDIA has left in its wake by not supplying ASICs to AIBs for gaming cards. I pretty much agree with everything you say here.

At the mercy, yes, but this is also a tremendous opertunity for a company like amd who has too secure fab space well ahead of time. They are able to make aggressive moves to gain marketshare and have very little risk while nvidia sits back and twiddles their thumbs (for whatever reason). Judging by amds recent moves with CPUs, GPUs, and elsewhare in the compute space (looking at you Xilinx) they will quickly be finding themselves in a great position.

 

[Lakados]

I was not given specifics, so I don't know, but I would understand why you would not want that information out there. On the contrary from what I have been told by AIBs. AIBs have told me that AMD intentionally nerfed 6800 cards so that they would not be highly sought out by miners. So you can read into that what you want, but I know I was told exactly that.


Sadly AMD is at the mercy of the market that NVIDIA has left in its wake by not supplying ASICs to AIBs for gaming cards. I pretty much agree with everything you say here.

In the long run, I am not too sure it is going to matter that much, it looks like NVidia and Samsung are able to produce the chips at a decent rate and AMD may have backloaded their shipments but their window for producing the 6000 series chips is coming to a close, they have Microsoft and Sony to start getting deliveries too, as well as more of the 5000 series CPU's and Lenovo still doesn't seem to have their Threadripper Pro's, and AMD still has to get the new EPYC's and Threadrippers to market some time in April/May if they want in on the Jucy Q4 sales. The AIB's know the chips are coming and many of them have some form of work restriction in place to meet COVID guidelines, even in China they are enforcing a lot of distancing measures which are hampering production. I really do expect that NVidia can get their cards out to retailers faster than AMD can and in larger quantities once they shift gears from supplying the Miners/Datacenters and back over to the gamers.

 

[bezant]

So signs

By my information, NVIDIA had sold less than 100K 3080/90 globally to date. Estimated 500K to miners. You make up your own mind.

Not knowing exactly which asic was sold to miners, 500k would be a good round number. Verified with an AIB contact as well.

Big miners don't buy cards any more, they buy ASIC direct and build their own.

This will piss off AIBs as well.

Those sales occurred over July, August, September. In other words, the mining sales were not just Ampere. 500k Ampere/month is a stretch.

 

[FrgMstr]

Those sales occurred over July, August, September. In other words, the mining sales were not just Ampere. 500k Ampere/month is a stretch.

NV quarter ended in Oct.

 

[Deleted whining member 223597]

If mining sales were important, wouldn’t you think Nvidia would have mentioned it in their earnings? They got in legal trouble last time for saying there was no impact to crypto bust.

 

[FrgMstr]

If mining sales were important, wouldn’t you think Nvidia would have mentioned it in their earnings? They got in legal trouble last time for saying there was no impact to crypto bust.

Well, maybe you are correct since ethics, morality, and legality are the first things that cross my mind when I think of the name "NVIDIA."

 

[Mega6]

They got in legal trouble last time for saying there was no impact to crypto bust.

Exactly why Nv will just bury it like crypto anything never happened. They got burned last time for mentioning it. Not a peep now. Just sales $$$ and missing gaming gpu cards.

edited for clarity