According to Nvidia’s Q2 earnings report, Ethereum mining GPUs didn’t perform up to expectations. And that’s despite the company noticing a record 68% increase in total revenues.
Nvidia Q2 Revenue Surges 68%, While Crypto Mining Cards Underperform
Nvidia has announced the financial report for second quarter of fiscal year 2022. As per the report, the tech giant has observed an increase of 68% in revenue over the last year.
However, despite such a tremendous improvement, the company’s line of Cryptocurrency Mining Processors (CMP) failed to meet expectations.
Nvidia introduced this series of GPUs for Ethereum miners earlier in the year. These cards come without most of the features from gaming GPUs, but offer high hashrate performance.
These CMP cards generated $266 million in revenue over the second fiscal quarter that ended August 1. However, the firm expected at least $400 million in earnings, a figure that is $134 million higher than the results.
Other areas of the company, however, performed higher than expectations as the company broke multiple records. Data Center revenue stood around $2.37 billion, up 35% in the last year.
Graphics cards other than the Ethereum and crypto mining ones saw a huge increase of 85% compared to last year as revenue stood at $3.06 billion.
Nvidia reported a total revenue of around $6.5 billion for Q2 2022 fiscal year, a value that’s 68% higher than last year.
Global GPU Shortage And Ethereum Mining
As a result of COVID, there has been a global silicon shortage that has affected a variety of industries, including computer parts.
A supply shortage combined with levels of demand never seen before meant these goods are selling at much higher prices than usual. And Ethereum miners have only made the situation worse.
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As a solution to combat miners hoarding off GPUs meant for gamers, Nvidia released the aforementioned CMP series.
Also, the company released a new version of their normal GPUs with mining hashrate reduced to 50% so that Ethereum miners buy the CMP cards instead. Though, just a few days ago a mining software released a workaround that uplifts the hashrate up to 70%.
Despite the measures, the cards are flying off the shelves anyways as ETH mining rewards are good enough to still be viable at 50% hashrate.
Earlier in the year, Nvidia CEO Jensen Huang commented on the issue in an interview and talked about Ethereum 2.0 as a possible solution.
ETH’s switch to Proof-of-Stake would mean high computing power is no longer needed for running nodes unlike with Proof-of-Work. Thus, the demand could ease somewhat.
At the time of writing, Ethereum’s price trades around $3k, up 0.5% in the last 7 days. Below is a chart showing the trend in the price of the crypto over the past three months:
ETH's price goes downhill | Source: ETHUSD on TradingView