During the company's first quarter earnings call, AMD CFO Devinder Kumar revealed that blockchain demand accounted for roughly 10 percent of the company's revenue in Q1 2018. That is up from a "mid-single digit figure" in 2017.
AMD CEO Lisa Su made several interesting comments about the cryptocurrency market. First up, she confirmed that AMD is working directly with commercial miners. It's not really a surprise, but I think it's one of the first times the company officially mentions this:
Sure, John. So look, on the blockchain there is a lot of discussion about this. From our standpoint, we stay very, very close to the customer set in the graphics space. And so, we spend time with the commercial miners as well as spending time with our partners.
And the way we look at this, our first priority when we look at allocation of graphics cards is to gamers. And so that's through OEMs, that's through system integrators, that's also working with key e-tailers to make sure that they are prioritizing the gamers segment and we're going to continue to do that. And so, that's one piece that we know well.
We also work directly with the commercial miners, and so, we see kind of what their forecasts are and they work with us and so that we have good visibility on. There is a piece that go through retail that is hard to tell whether that's gaming or mining, but we believe we have a good sense of what that is. So it is an approximation, but we think it's a good approximation of where we are.
She beliefs the blockchain infrastructure is here to stay, and doesn't see significant risk of a wave of secondhand GPUs coming into the market:
And then, to your longer-term question, I do think the blockchain infrastructure is here to stay. I think there are numerous currencies. There are numerous applications that are using the blockchain technology. We don't see a significant risk of secondhand GPUs coming into the market. I think what you find is that, one, there are number of different currencies, and, two, a lot of these users that are buying GPUs these days are actually buying them for multiple use cases, both commercial and consumer. So they're not necessarily buying just for mining.
There is some uncertainty about the market though. AMD expects sales to cryptocurrency miners will be lower in Q2 2018 as well as the second half of this year:
And I think for that reason, we do think this is a different cycle. That being the case, we do see a bit of volatility and that's why we are putting into our forecast for the second quarter and the second half a little bit lower blockchain demand, but that's more than made up for by the other new products and the way the new products are ramping in the business.