Graphics Card Makers Forced to Slash Prices

Companies behind graphics card including Gigabyte Technology, Micro-Star International (MSI) and TUL witness a 40% drop-off in card shipments. The reason for that is a decrease in demand for cryptocurrency mining machines, industry sources state. Channel distributors and larger mining farm operators are said to cut orders with the creators of mining graphics cards and mining motherboards.

What is more, a number of mining farm operators have even stopped buying graphics cards, while waiting for the Ethereum mining machines by China’s Bitmain in the third quarter of 2018. The operators expect mining rewards to pick up gradually in the third quarter, as Bitcoin and Ethereum values may finally be rebound.

What does this mean when it comes to the wealth of graphics card makers? Their gross margins are expected to fall sharply to 20-25% from a high of 50% reported earlier. The thing is that makers and channel distributors now have to reduce prices for sales promotion.

Not the best situation for companies behind cards after record shipments of 4.5 million graphic cards in 2017, when profits from the shipments doubled to over NT$2 billion (US$67.37 million). 

You can learn more about the recent situation in a post by DigiTimes.