Nvidia says $100-$300 million of Q4 revenue came from crypto miners

midian182

Posts: 6,578   +58
Staff member
In a nutshell: Nvidia has revealed that around $100-$300 million of its revenue in Q4 was from sales to cryptocurrency miners, and it expects the new crypto mining processor (CMP) line will generate around $50 million during the first quarter of FY 2022.

In its Q4 and fiscal 2021 earnings report, Nvidia posted a record $5 billion in quarterly revenue, up 61 percent year-over-year and reaching net earnings of $1.475 billion. The company's gaming segment accounted for $2.5 billion of that revenue.

Nvidia estimates that crypto mining sales brought in between $100 million and $300 million. CFO Colette Kress says that's the best estimate as it can't accurately track the end-use of GPUs that are sold to card manufacturers, so the actual figure is likely to be higher.

"We suspect that the significant increase in the Ethereum hash rate observed over the past few months was driven by a combination of previously-installed mining capacity that was reactivated, as well as news sales of GPUs and ASICs," said Kress.

Nvidia has curtailed the Ethereum mining abilities of its upcoming RTX 3060 to make the card less appealing to miners. It's also hoping the new CMP line will help ease Ampere's current availability issues. It expects CMP card sales to bring in $50 million during the first quarter of the year. The global chip shortage is still going to be problem, of course, one that's predicted to last into next year.

The company suggested it doesn't expect to see any cryptocurrency crash as we saw in January 2018, when Bitcoin fell by 65 percent in four weeks.

"Cryptocurrencies have recently started to be accepted by companies and financial institutions and show increased signs of staying power," Kress added. "CMP products will let us gain some visibility into the contribution of cryptomining to our overall revenue."

CEO Jensen Huang says if there is a crypto crash, we won't see second-hand graphics cards flood the market like we did last time as most miners will hang on to their cards until prices improve again—at least that's what Nvidia hopes. If you do buy an ex-mining card, expect its gaming performance to have been impacted. But it might just need a little maintenance to get those fps back.

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Kosmoz

Posts: 125   +201
Nvidia estimates that crypto mining sales brought in between $100 million and $300 million. CFO Colette Kress says that's the best estimate as it can't accurately track the end-use of GPUs that are sold to card manufacturers ...
Bull****!

Hey missy CFO, just ask your CEO Jensen, he'll tell you how many cards nvidia sold directly to miners.
 

McMurdeR

Posts: 243   +236
Nvidia is obfuscating. Miners are buying up pretty much all of the gaming stock while Nvidia are reporting record gaming revenue. The gaming community has been thrown under the bus - there is no growth in gaming sales because gamers can't buy the products!

CMP is merely to mitigate against an incoming flood on the second-hand market once the mining period is over. But in reality miners will only buy these as a last resort because they will have zero resale value. The big losers here are gamers - this move merely diverts more supply away from them - permanently.
 

ypsylon

Posts: 310   +213
Truth is nVidia/AMD doesn't give a 2 Fs about gamers/creators/whatever. All what matters is that stock is cleared before it even finish packaging process.

For that very reason I'm seriously thinking about getting WRX80 + max CPU I can afford (even if I have TRX40 right now, but connectivity is so nice on WRX80). I'll lose a bit of rendering time doing it on CPU, but I'll never again have to put with this GPU $hit unobtanium.
 

terzaerian

Posts: 662   +926
Nvidia is obfuscating. Miners are buying up pretty much all of the gaming stock while Nvidia are reporting record gaming revenue. The gaming community has been thrown under the bus - there is no growth in gaming sales because gamers can't buy the products!
What's your source on this? The PS5 is out of stock too and you can't mine on that (yet). Where is your smoking gun that it's those pesky miners snapping up inventory and not scalpers?

Frankly the whole gaming card "crisis" is just becoming an echo of the "toilet paper shortage" from last year. Media plays up a shortage because it generates clicks, which leads to panic buying, which exacerbates the shortage, which the media plays up, ad infinitum.
 
Nvidia is obfuscating. Miners are buying up pretty much all of the gaming stock while Nvidia are reporting record gaming revenue. The gaming community has been thrown under the bus - there is no growth in gaming sales because gamers can't buy the products!

CMP is merely to mitigate against an incoming flood on the second-hand market once the mining period is over. But in reality miners will only buy these as a last resort because they will have zero resale value. The big losers here are gamers - this move merely diverts more supply away from them - permanently.

Source? I've seen you spreading this disinformation in several threads. Consoles, 3000 series Nvidia cards and rx 6000 series cards have been sold out since before Ethereum went up in value. This is clearly the result of scalpers, if you think any different then go wait in line at Microcenter in the morning or join a few discord servers. You will see that its scalpers just buying to sell. They consider it a job and put the time in too.

Every retailer that gets stock of cards limits sales to 1 card per address. So how can a miner get them all? Miners are not known to use bots to buy up stock, whereas scalpers are. Just think about it!

In all honesty, if there were no chip shortages and scalpers didn't exist, there would be enough cards for Miners and Gamers.

And yes, I would mine ethereum of I could get a card/cards. I tried today on a day when Best Buy had tons of stock on a dozen different video cards, AMD.com had stock, and Microcenter had stock. I came away with nothing, not a single card! Not willing to pay the scalpers.
 

McMurdeR

Posts: 243   +236
Source? I've seen you spreading this disinformation in several threads. Consoles, 3000 series Nvidia cards and rx 6000 series cards have been sold out since before Ethereum went up in value. This is clearly the result of scalpers, if you think any different then go wait in line at Microcenter in the morning or join a few discord servers. You will see that its scalpers just buying to sell. They consider it a job and put the time in too.

https://wccftech.com/nvidia-allegedly-sold-175-million-worth-ampere-geforce-rtx-30-gpus-to-miners/


That news was widely covered back in November, no need for me to quote sources that anyone can find with a simple search. But thank you for monitoring and calling out my neferious activities!

There's no way to know for sure, but that's precisely the point of my original comment. Nvidia is not being straight on how much product they're diverting away from gamers to to mining customers. At the same time, they are claiming that they want gamers to get these products while diverting even more supply away from them. It's disingenuous.

Scalpers are a symptom of low stock, not a cause. Taking more stock out of the reach of gamers only encourages them more.
 

neeyik

Posts: 1,811   +2,098
Staff member
There's no way to know for sure, but that's precisely the point of my original comment. Nvidia is not being straight on how much product they're diverting away from gamers to to mining customers. At the same time, they are claiming that they want gamers to get these products while diverting even more supply away from them. It's disingenuous.
Other than their own Founders Edition cards and prosumer models, Nvidia doesn't sell graphics cards - it sells chips. They're made in Taiwan/South Korea, and then (mostly) stored in Hong Kong. Third party vendors then purchases trays of the chips from Nvidia and get them shipped from the HK facilities to their manufacturing lines.

It's unlikely than Nvidia requires these vendors to provide them with highly detailed sales figures; they're more likely to get bulk figures and trends, so that they can determine what production requests they need to issue to TSMC and Samsung. And given that those fabricators requires at least a month to make the wafers > turn them into dies > test, package, and store the finished product, neither AMD nor Nvidia are able to rapidly adjust production levels, even if they exact details of where every chip has gone.

It's also worth noting that the availability of AMD CPUs isn't great either, and this can't be down to miners and probably not particularly affected by scalpers. In the case of the latter, a search of eBay UK for new/unused graphics cards (with more than 6 GB of RAM and over £350) gives nearly 560 results, whereas doing a similar thing for Ryzen 7 CPUs produces just 142 results, with around 20 of which being 5000 series models.

TSMC has 4 fabrication locations which handle AMD's orders, with one just doing 5N duties. So that leaves 3 for everything else, and together they churn out around 200k wafers per month, across dozens of different nodes. Digitimes claimed back in September of last year, TSMC was producing over 130k wafers per month on N7. That has to meet production demands from Apple, Huawei, Qualcomm, AMD, Nvidia et al and less than half of their tapeout list is CPUs and GPUs.

Samsung, of course, will be in exactly the same position and production levels for Ampere chips will be worse than for Zen/RDNA 2, because they're larger dies; graphics cards also use multiple components, from various manufacturers, who are also under the same fabrication constraints. Irrespective of where the demand is coming from, if semiconductor companies could instantly double their output, they absolutely would.

The CMP products themselves won't impact production levels for gamers - this is because the chips are either Turing-based (and thus made on TSMC's 12FFN node) or Ampere dies that aren't usable for graphics cards (due to die defects). Of course, if the CMP range doesn't intice miners to buy them, then gaming graphics cards are still going to snapped up directly from 3rd party vendors.

So does Nvidia really not care about gamers? Well, gaming is still their major source of revenue (47% of annual total) and they would gladly get more chips out to these customers, if they could. But in their eyes, mining isn't a major deal, hence why the CMP offerings are so unremarkable. The ethereum restriction added to the 3060 is arguably just a timely peace offering, given that other GPU-mined currencies aren't affected by it.
 

havok585

Posts: 255   +97
What's your source on this? The PS5 is out of stock too and you can't mine on that (yet). Where is your smoking gun that it's those pesky miners snapping up inventory and not scalpers?

Frankly the whole gaming card "crisis" is just becoming an echo of the "toilet paper shortage" from last year. Media plays up a shortage because it generates clicks, which leads to panic buying, which exacerbates the shortage, which the media plays up, ad infinitum.
Scalpers.

That's where your stock is.
And nobody buys them for 3k .
 

terzaerian

Posts: 662   +926
https://wccftech.com/nvidia-allegedly-sold-175-million-worth-ampere-geforce-rtx-30-gpus-to-miners/


That news was widely covered back in November, no need for me to quote sources that anyone can find with a simple search. But thank you for monitoring and calling out my neferious activities!

There's no way to know for sure, but that's precisely the point of my original comment. Nvidia is not being straight on how much product they're diverting away from gamers to to mining customers. At the same time, they are claiming that they want gamers to get these products while diverting even more supply away from them. It's disingenuous.

Scalpers are a symptom of low stock, not a cause. Taking more stock out of the reach of gamers only encourages them more.
Thank you for providing a source. I like to have them because the outrage mill against crypto mining thrives on bad logic and misinformation.

On an elementary level, we do agree on one thing: mining farms that use GPUs are a shitty practice. From my perspective they fly in the ideological basis for crypto, decentralization, by centralizing hashing power with singular entities. It means control over any given network could be taken by one of those entities, or damage could be done to one of those networks by shutting them down.

It's good to keep some perspective though: the article states: "The company earned a revenue of $2.27 Billion for the gaming segment alone", of which even the upper figure of 300 million in direct crypto sales is still a small fraction, and could not remotely account on its own for the current shortage, especially seeing as it's demand already served. A mining farm that bought $1 million in 3090s back in November 2020 doesn't exactly need to upgrade now in February 2021, especially with 3060s that have been crippled anyway.

The article also quotes: "Steves noted that the upcoming network upgrade of the Ethereum blockchain, also known as Ethereum 2.0, which is scheduled to take place sometime in December, demands that miners switch over to more efficient mining hardware." This is blatantly untrue. The Ethereum 2.0 upgrade means Ethereum mining will end completely, not get more demanding, because the chain is switching from proof of work to proof of stake. Miners may switch to another coin, like Zcash, but the profitability and stability of other altcoins is nowhere near Ethereum so a lot of farms are probably going to get squeezed out of the business anyway once that happens.

Finally, Bitcoin specifically has little bearing on this shortage. Bitcoin mining has by and large switched to dedicated ASIC mining units, and anyone trying to mine it on a GPU at this point is just banging their head on a brick wall.
 

McMurdeR

Posts: 243   +236
So does Nvidia really not care about gamers? Well, gaming is still their major source of revenue (47% of annual total) and they would gladly get more chips out to these customers, if they could. But in their eyes, mining isn't a major deal, hence why the CMP offerings are so unremarkable. The ethereum restriction added to the 3060 is arguably just a timely peace offering, given that other GPU-mined currencies aren't affected by it.

Consider that a good chunk of that 47% are being snapped up by miners, and nobody knows how many. They specifically go after gaming cards (especially 3080s and 3060tis) precisely because they can dump them on the second hand market as soon as they're done with them.
 

neeyik

Posts: 1,811   +2,098
Staff member
Consider that a good chunk of that 47% are being snapped up by miners, and nobody knows how many.
It's worth noting that Nvidia's 'gaming' sector covers discrete graphics cards, discrete mobile GPUs, GeForce Now, Shield TV, and the Switch SoC - although what size of the portion of 47% can be attributed towards mining sales is anyone's guess, Nvidia has sold a lot of GPUs to laptop vendors.
 

Xausejo

Posts: 7   +3
They should do something bout this, miners and scalpers are only few digits only. If they keep focusing on mining only.. they going to lose most of the clients the Gamers. Which is maybe 80-90% of the revenues.
 

McMurdeR

Posts: 243   +236
Other than their own Founders Edition cards and prosumer models, Nvidia doesn't sell graphics cards - it sells chips. They're made in Taiwan/South Korea, and then (mostly) stored in Hong Kong. Third party vendors then purchases trays of the chips from Nvidia and get them shipped from the HK facilities to their manufacturing lines.

It's unlikely than Nvidia requires these vendors to provide them with highly detailed sales figures; they're more likely to get bulk figures and trends, so that they can determine what production requests they need to issue to TSMC and Samsung. And given that those fabricators requires at least a month to make the wafers > turn them into dies > test, package, and store the finished product, neither AMD nor Nvidia are able to rapidly adjust production levels, even if they exact details of where every chip has gone.

So does Nvidia really not care about gamers? Well, gaming is still their major source of revenue (47% of annual total) and they would gladly get more chips out to these customers, if they could. But in their eyes, mining isn't a major deal, hence why the CMP offerings are so unremarkable. The ethereum restriction added to the 3060 is arguably just a timely peace offering, given that other GPU-mined currencies aren't affected by it.

I wonder how they arrive at that figure of 47% if they don't get that detail from the vendors? In any case it still seems remarkable to be able to report those figures when Ampere gaming cards have been virtually impossible to buy since launch, and indeed almost everything else has been out of stock since the holiday period.

There's no doubt Nvidia would love to get a card out to anyone who wants one, but they're clearly not having the kind of success that consumers would like. When you look at those financial figures it doesn't look like there's any problem, as least not from where they stand.
 

neeyik

Posts: 1,811   +2,098
Staff member
I wonder how they arrive at that figure of 47% if they don't get that detail from the vendors?
It's the portion of their total revenue that comes from selling chips to vendors that fall into a GeForce product category (along with other the elements of their gaming sector). If you take the GA102 chip, this is how it loosely pans out:

  • Nvidia researches and designs the microarchitecture and chip layout
  • They then pay a small scale chip fabrication company to manufacture some test samples to verify the design
  • Nvidia then agrees a contract with Samsung to manufacture the GA102 to a much larger scale, paying them to create additional engineering samples (to further refine the design), as well as for testing and binning processes. Part of this deal involves having the finishes batches of dies distributed to a holding facility.
  • Nvidia then pays Samsung or another company to package the dies and carry out further testing, to get the finished GPU.
  • These are then sent to a storage and distribution facility in Hong Kong - possibly Nvidia's own or again, an additional company does this.
  • Third party vendors, such as MSI, Pallit, EVGA, etc then place orders with Nvidia from their catalogue of GA102 dies - it's these orders that Nvidia records as revenue for their gaming sector (along with the other elements, e.g. GeForce Now subscriptions).
  • These will be listed into categories of bin quality, where trays of 1000 or so GPUs are priced on the basis of what operating frequency, voltages, and power consumption they tested at.
  • The distribution facility then ships the trays of chips directly to the vendors, who then use them to make their RTX 3070, 3080, and 3090 models.
  • These are then sold directly via their own websites, to retailers, or to individuals who are able to do so (I.e. the large scale miners) - the vendors record such sales for their revenue figures.

Nvidia will have an idea of how many graphics cards, of the various models, are being sold from the amount of orders placed for the specific trays of chips. For example, full die GA102 (I.e. with all elements functional) are only used in RTX A40 and A6000 professional graphics cards - some are used for their own models, the rest are bought by PNY (who may well be making Nvidia's versions too).

GA102 chips from 68 SM trays end up in RTX 3080s, but there will be different categories of those - the majority will be the 'standard' ones (I.e. expected to run at reference clock speeds and voltages), with the others falling into a number of sections based on best MHz/volts. These will end up in 3rd party vendors overclocked models, or the ones with fancy water cooling.

In any case it still seems remarkable to be able to report those figures when Ampere gaming cards have been virtually impossible to buy since launch, and indeed almost everything else has been out of stock since the holiday period.
They're getting those figures due to (a) higher tray prices for their chips and (b) they're selling every just about every single tray they can produce.

There's no doubt Nvidia would love to get a card out to anyone who wants one, but they're clearly not having the kind of success that consumers would like. When you look at those financial figures it doesn't look like there's any problem, as least not from where they stand.
It will be something they're acutely aware of. This is because they are at the mercy of so many other manufacturers - not just Samsung, but the packaging companies they use, and component producers that the graphics card vendors rely on too. They're also reliant on Micron making sufficient GDDR6X for the market, as nobody else makes it.

While their current revenue and operating margins are continuing to improve, and AMD are in exactly the same boat as themselves, Nvidia will be keeping a close eye on Intel and their forthcoming HPG line of Xe graphics card. Even if the models end up being in a clear 3rd place, compared to GeForce and Radeon products, Intel has the advantage of having their own foundries, packaging, and distribution services. In other words, they're a little less reliant on others for inventory output.

Potentially that means Intel could be in a position to have a ready supply of Xe graphics cards available, for a market that's desperately short on products. And given that this shortage is expected to last for a good while longer, Nvidia would not want to give Intel any advantage in securing a market foothold of any kind.