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.
British Prime Minister Rishi Sunak’s government should take steps to cut UK reliance on semiconductors from Taiwan because of the threat posed by China, a draft strategy said. Chinese interference or an invasion of Taiwan would threaten Britain’s economy, according to the unpublished strategy seen by Bloomberg. That is because it would compromise supplies to and from Taiwan, which is home to more than 90 percent of the manufacturing capacity for all leading-edge chips, including the world’s pre-eminent silicon foundry, Taiwan Semiconductor Manufacturing Co (台積電). The strategy is important because semiconductors are used in everything from cellphones to cars, and shortages have
BIG SPENDERS: China’s reopening is a key ‘mega-theme’ for the sector, RBC Bank said, but it remains to be seen how much Chinese tourists will buy The European luxury sector is welcoming the end of pandemic lockdowns in China, as the return of big-spending Chinese tourists could sustain further growth. Prior to the pandemic, Chinese tourists visiting Europe were a major source of sales for luxury houses. The Chinese accounted for “a third of luxury purchases in the world and two-thirds of those purchases were made outside China”, said Joelle de Montgolfier, head of the luxury division at management consulting firm Bain & Co. Their return has led RBC Bank to revise up its growth forecast for the sector this year to 11 percent, from 7 percent previously. “China
‘IT HURTS TOO MUCH’: After talks between Blizzard and NetEase over their contract broke down, servers hosting Blizzard’s games in China were shut down Millions of Chinese gamers have lost access to World of Warcraft after a furious dispute between US title owner Activision Blizzard Inc and NetEase Inc (網易), its longtime local partner in the world’s biggest gaming market. Devotees of the popular game took to social media networks to bemoan the loss, with one posting an image of a failed connection message accompanied by crying emojis. “It really hurts my heart,” one wrote. “It hurts, it hurts too much,” another said. Massively popular worldwide, particularly in the 2000s, World of Warcraft — often abbreviated as WoW — is an online multiplayer role-playing game set in
The US Department of Justice (DOJ) on Tuesday accused Alphabet Inc’s Google of abusing its dominance in digital advertising, threatening to dismantle a key business at the heart of one of Silicon Valley’s most successful Internet firms. The US government said Google should be forced to sell its ad manager suite, tackling a business that generated about 12 percent of Google’s revenues in 2021, but also plays a vital role in the search engine and cloud company’s overall sales. “Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the
RSS