Graphic card maker AMD expects drop in revenue next quarter partly because of decreasing demand from cryptocurrency miners, although it announced its “highest profitability in years” on Tuesday.
On its earnings release, AMD managed to bring in $1.42 billion revenue last quarter. This made a $6.48 billion total in 2018, which is relatively higher than 2017’s total of $5.25 billion.
That being said, AMD still lacked $20 million to hit its target revenue. The release said that its revenue from crypto mining industry has gone completely.
“For the first quarter of 2019, AMD expects revenue to be approximately $1.25 billion, plus or minus $50 million, a decrease of approximately 12 percent sequentially and 24 percent year-over-year,” AMD underscored, adding that:
“The sequential decrease is expected to be primarily driven by continued softness in the graphics channel and seasonality across the business. The year-over-year decrease is expected to be primarily driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue and lower memory sales.”
AMD has been giving a warning for a year now that the demand from the crypto mining industry might vanish. Lisa Su, CEO of AMD, stated in October 2017 that the firm was “predicting that there will be some leveling-off of some of the cryptocurrency demand.”
“The cryptocurrency market is unstable and demand could change quickly,” the company stated in its annual 10-K filing last year.
AMD said at the time that because of decline in demand, the company’s GPU sales might suffer.
The following earnings reports of AMD proved these predictions to be true. Although GPU sales from cryptocurrency miners accounted for 10 percent of the total sales during the first quarter of 2018, it also went down several months later.
AMD announced last October that it had “negligible” revenue from crypto miners during the third quarter of 2018.