Gigabyte Technology Co Ltd (技嘉), a leading supplier of motherboards and graphics cards, is forecast to see lower profitability in the second quarter, due to a decline in shipments and graphics cards prices as the cryptocurrency mining frenzy gradually abates, Capital Investment Management Corp (群益投顧) said last week.
Cryptocurrency mining continues to suffer from tighter security and regulatory measures around the world, with bitcoin’s price having dropped about 55 percent this year, Bloomberg News said, citing the Luxembourg-based Bitstamp exchange.
“The prices of major cryptocurrencies have plunged after peaking in early 2018 ... leading to persistently lower demand for cryptocurrency mining and for Gigabyte graphics card shipments, which decreased somewhat since the beginning of the second quarter,” Capital Investment said in a note on Thursday last week.
Gigabyte’s revenues reached about NT$5 billion (US$163.9 million) in April and again in May, notably lower than March’s NT$8.5 billion, and its second-quarter revenues could be less than in the first quarter, Capital Investment said.
“In our opinion, as the average selling price of graphics cards is expected to edge down, the second-quarter gross margin could underperform quarter-on-quarter,” the investment advisory firm said.
Gigabyte shipped 1.2 million graphics cards in the first quarter and the company said that shipments could see a quarterly decline of 20 percent in the second quarter, the Chinese-language Economic Daily News reported on Wednesday.
The company shipped between 300,000 and 350,000 graphics card units in April and again in May, compared with 450,000 in March, the report said.
Sales from motherboards accounted for 49 percent of Gigabyte’s total sales in the first quarter, followed by graphics cards at 36 percent and servers at 15 percent, the newspaper quoted company spokesman K.J. Sun (孫國仁) as saying at an investors’ conference.
The proportion of sales from graphics cards would drop quarterly in the second quarter, while sales from motherboards and servers would increase, Sun said, without elaborating.
In the second half this year, the company is expecting Nvidia Corp’s planned launch of its new family of Volta graphics processing units (GPUs) to bolster graphics card sales, he said.
However, demand for graphics cards in the next few quarters might not be as robust as the company expects, despite the rapid development of the e-sports industry, Capital Investment said.
It is rumored that Nvidia’s inventory of old GPUs remains high and the launch of the new GPU model might be postponed until September or even the fourth quarter, while Intel Corp might also delay the launch of its new Cannon Lake chip, Capital Investment said.
“Gigabyte’s revenue and earnings in the second half this year could be negatively affected,” it said.
Gigabyte shares on Friday rose 3.22 percent to NT$67.4 in Taipei trading. It reported that its sales for the first five months of the year rose 40.34 percent year-on-year to NT$30.53 billion.
The company saw its shares fall 14.25 percent last month, mirroring broad-based declines among local motherboard and graphics card makers in light of the weaker demand for products used in cryptocurrency mining and the delayed launch of Nvidia’s Volta GPU.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion