Price cuts are expected.
Combined with the proposal to cut the amount of Ethernium awarded for mining a block by 80%, and it looks like the fabled used graphics card flood is imminent.
Taiwan-based graphics card makers including Gigabyte Technology, Micro-Star International (MSI) and TUL are expected to see their shipments for April plunge over 40% on month, as many clients have suspended taking shipments in response to drastic slowdown in demand for cryptocurrency mining machines, according to industry sources.
Channel distributors and larger mining farm operators have cut orders with makers of mining graphics cards and mining motherboards or asked them to suspend shipments due to the crypto mining craze waning abruptly from the beginning of April, the sources said.
Quite a few mining farm operators have even stopped purchasing graphic cards, as they are awaiting the rollout of Ethereum mining machines by China's Bitmain in the third quarter of 2018. They anticipate mining rewards to pick up gradually in the third quarter, as Bitcoin and Ethereum values may rebound following sharp declines seen in early 2018, the sources indicated.
In line with the shipment drops, gross margins for graphics card makers are expected to fall sharply to 20-25% from a high of 50% enjoyed earlier as makers and channel distributors are forced to slash prices for sales promotion. They hope the market demand can rebound in May or June.
Combined with the proposal to cut the amount of Ethernium awarded for mining a block by 80%, and it looks like the fabled used graphics card flood is imminent.