Gigabyte graphics card shipments to drop 20% in 2Q18

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We mentioned a global drop in demand already, now things solidify as a surge in cryptocurrency mining demand is dragging down Gigabyte Technology's graphics card shipments in the second quarter, which are set to fall about 20% sequentially with average selling price (ASP) for such cards dropping 10%, according to the company.



At an investors conference held June 27, Gigabyte said its graphic card shipments for the second quarter are estimated at around one million units, down from 1.2 million of a quarter earlier, reports digitimes:

As it remains unclear as to when Nvidia will release its new GPU platform in the second half of 2018, Gigabyte can hardly assess its shipment momentum in the third and fourth quarters. Nevertheless, the firm still expects its annual earnings from graphic cards for 2018 to be higher than that a year earlier, bolstered by the much higher corresponding profits scored in the first half of the year than in 2017.

 

 

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Before the crypto mining craze subsided abruptly in April 2018, Gigabyte maintained a hefty profitability scenario in the first quarter, with its net earnings for the quarter shooting up 91% sequentially and skyrocketing five-fold on year to NT$1.61 billion (US$52.75 million), a new quarterly high and even higher than net profits for the first half of 2017. Revenues for the first five months still surged 40% on year to NT$30.53 billion. As crypto mining graphic cards can hardly generate high gross margins amid the sustained weakness in demand, Gigabyte will focus more on promoting graphic cards for gaming devices in the second half of 2018, the company said.

Company statistics also indicate Gigabyte's revenue ratio for graphic cards hit a high of 49% in the first quarter of 2018, compared to 36% for motherboards and 15% for servers. But the ratio for servers already soared to 20% in the second quarter amid the declining graphics card shipment momentum. Meanwhile, Gigabyte's motherboard shipments reached 3.3 million units in first-quarter 2018, and 1.1 million units each for April and May, with second-quarter shipments likely to remain flat or increase slightly compared to the first quarter. The company expects its annual motherboard shipments to be in the same range of 12-13 million units as posted for 2017, instead of accomplishing a 10% annual growth estimated in early 2018. This is due mainly to a delay in the arrival of Intel's new-generation CPU platform, the company indicated.

Gigabyte has landed big orders from Yandex of Russia and Penguin Computing of the US for server products. This is expected to help push up the firm's 2018 server revenues by 20% on year.

Gigabyte graphics card shipments to drop 20% in 2Q18


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