Nvidia crypto mining chip sales fell off a cliff this quarter

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  • Even as the price of digital currencies increases in 2021, Nvidia hasn’t cashed in on digital “shovels” for miners.
  • In March, Nvidia introduced versions of its chips specifically targeted at cryptocurrency professionals called CMP.
  • Nvidia said Wednesday that CMP sales declined 60% sequentially to $105 million in the most recent quarter.

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Even as the price of digital currencies increases in 2021, Nvidia hasn’t cashed in on digital “shovels” for miners.

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GPUs, the kind of processors that Nvidia makes, can be used to efficiently mine Ethereum by solving complex math problems. In March, the company introduced versions of its chips specifically targeted at cryptocurrency professionals called CMP.

Nvidia said Wednesday that CMP sales declined 60% sequentially in the most recent quarter, and that product line sales are expected to decline to “very negligible” in the fourth quarter.

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Nvidia CMP card sales declined from $266 million in the quarter ended August to $105 million in the most recent quarter ended October.

Adding $155 million to CMP sales from the May quarter, the chipmaker now says it totaled $526 million in revenue over the lifetime of the product — just under 3% of the $19.27 billion in revenue the company made during that period.

The lack of traction for the CMP didn’t hurt Nvidia at all. Its stock is up more than 123% year-over-year. It said in an earnings report Wednesday that overall sales jumped 50% on an annualized basis and made $3.2 billion in a quarter by selling graphics cards to gamers and PC makers.

In 2018, the fall in cryptocurrency prices Injured Nvidia’s stock and sales of used graphics cards affected disappointing prices in the used equipment market.

2021 is different. This year, it’s hard for gamers to find Nvidia’s latest-generation GPUs at retailers because they sell out so quickly, and the company warned Wednesday that it saw “huge demand” in the holiday quarter.

When Nvidia announced CMP cards in the spring, they were clearly designed as a tool to keep GPU supplies available to gamers rather than industrial miners.

“We expect CMP to satisfy miners and remain professional miners,” Nvidia CEO Jensen Huang said in May.

Nvidia sees gamers as a core market, and also believes that GPUs will become a standard component of every cloud server. Huang said Wednesday that the bull case for Nvidia doesn’t need to become a levy of the cryptocurrency gold rush — it could become a major supplier to companies that want to create “ubiquitous” or online worlds with 3D graphics.

Nvidia also added software to its gaming-focused cards to make them less suited for mining cryptocurrency. The company said Wednesday that nearly all GeForce graphics cards sold for desktops have software called Lite Hash Rate turned on “in an effort to direct GeForce to gamers.”

Still, the company says it can’t be sure that increasing sales of graphics cards doesn’t belong to the cryptocurrency world.

,Our GPUs are capable of crypto mining, although we don’t have visibility into how much this affects our overall GPU demand,” Nvidia CFO Colette Kress said on a call with analysts Wednesday.

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