Crypto Correction: Desktop GPU Shipments Down 16 Percent

AMD Radeon \AMD Radeon "Vega" architecture. Image credit: AMD

Desktop graphics card shipments were down 16 percent in the third quarter of this year when compared to the same period last year, according to Jon Peddie Research, a market research firm. The group believes this is due to an oversupply of GPU cards due to a previous cryptocurrency mining boom.

Mining, Tariffs Negatively Impacts GPU Makers

The desktop GPU sector seems to have been the only one that was negatively impacted, because cryptocurrency miners tend to use only desktop GPUs (or ASICs) for mining, not discrete or integrated notebook GPUs. The latter two are either not powerful enough or come in a package (a thinner laptop form factor) that would easily overheat while mining at 100 percent utilization.

Because of the way the cryptocurrency market works and how volatile it tends to be, GPU makers can either be caught off-guard by a cryptocurrency boom or find themselves with too much stock when the boom quickly turns into a bust.

The market research firm also believes that the new U.S. tariffs for chips also negatively impacted the desktop GPU shipments:

"The effect of crypto-mining on desktop discrete GPU sales is over, leaving AMD and Nvidia with an oversupply in the channel and impacting shipment levels.

The U.S. tax increase on products from China has had a small effect which may worsen in Q4. The drop in the U.S. stock market has caused consumers and enterprise to hold off on purchases. All of that has contributed to the slow sell-off of inventory in the channel, which has reduced demand to the suppliers.”

Notebook GPU Sales Are Up, PC Sales Flat

Although the decline of desktop GPU sales brought down the overall GPU sales year-over-year by 2.2 percent, notebook GPUs actually saw an increase of 7 percent compared to the same quarter last year.

Additionally, all the major players saw an overall increase in GPU sales of 10.6 percent compared to the second quarter of this year. AMD’s shipments increased by 6.5 percent quarter-to-quarter, Intel’s shipment increased by 13.1 percent, and Nvidia’s increased by 4.3 percent. The overall PC market grew by 8.2 percent quarter-to-quarter, but it stayed relatively flat year-over-year, with only a 0.3 percent increase in shipments.

Previous reports have also suggested that desktop GPU makers will continue to see declines in sales in the first half of 2019.

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