Mizuho analyst Vijay Rakesh talked to a bunch of suppliers in Asia-Pacific and got the sense that demand for NVIDIA's GPUs is still a lot higher than expected. Sales this quarter are higher than analyst estimates as cryptocurrency demand is driving huge demand for NVIDIA's GeForce GTX 1060 and GTX 1070 video cards.
The high demand pushed up the pricing of NVIDIA's GPUs but Rakesh warns demand may cool next quarter. There are two problems on the horizon, first up the bans on crypto may lower demand from Ethereum miners and next the analyst expects the shortage of DRAM will also affect GPU shipments:
Our checks with the leading GPU and motherboard OEMs indicate SepQ GPU card trends are very strong, with card shipments coming in ~30-50% ahead of flat q/q expectations on strength from cryptocurrency mining. Cryptocurrency demand is driving strength in NVDA's GTX 1060/1070 cards. The GPU/motherboard OEMs also noted GPU pricing was up ~25% in the last six months. As we have noted prior (Link - Pricing), the strong pricing and unit trends point to strong OctQ upside to NVDA's muted cryptocurrency expectations. The OEMs also noted zero inventory of GPUs in the channel and constrained short DRAM supply and pricing also affecting GPU shipments. Coming off a very strong SepQ, there are also expectations in the supply chain that DecQ GPU sales could be muted in pricing and demand on recent cryptocurrency bans and DRAM shortages.