Gigabyte sells 20 percent fewer graphics cards during the second quarter

During large parts of 2017, inadequate access to graphics cards and high prices were the rule rather than the exception. The situation was primarily attributed to greater demand from computer enthusiasts and the hunt for cryptocurrencies, which can be unearthed using graphics circuits. Recently, the profitability of crypto-mining has decreased markedly, which is partly due to lower exchange rates.

Earlier in the year, it was reported that sales of graphics cards in April were expected to plummet by 40 percent compared with the previous month. Digitimes now reports that Gigabyte sold 20 percent fewer graphics cards on a quarterly basis during the second quarter of the year.

It was at an investor meeting that Gigabyte announced that sales are expected to decrease from 1.2 million graphics cards to around 1 million. The loss is in line with the announced lower sales from April, where third-party manufacturers resorted to price reductions to stimulate demand.

Until then, Gigabyte, along with many other manufacturers, enjoyed sky-high margins thanks to high pricing, with Gigabyte increasing operating profit by 91 percent during the first quarter. Now, the average sales price is expected to have decreased by 10 percent compared to the record quarter, which erodes the company’s margins.

At the same time, Nvidia and several of the partner manufacturers are said to be sitting on large layers of graphics circuits, something that is said to have postponed the launch of Nvidia’s new architecture. In an attempt to sell the outgoing models, Gigabyte will invest heavily in gaming-oriented marketing campaigns during the second half of the year.