Following Crypto Bust, GIGABYTE May Hit the Red Line in Earnings

[Raevenlord]

GIGABYTE, like most manufacturers of graphics cards, bet hard in the crypto craze to fuel demand for their graphics card solutions - an easy deal, considering the company is an AIB to both AMD and NVIDIA, which means they would cater to all of the cryptocurrency mining market. According to DigiTimes, market watchers are aware of the inventory buildup on GIGABYTE's watch, and cite the recent production issues with NVIDIA's latest RTX 2080 Ti graphics cards as reasons for the company to leave the black and cross the profit threshold towards a loss on the Q4.

GIGABYTE's Q3 was already reported as being a close cut in the earnings department, where the company didn't post losses simply because of non-operating incomes - meaning that inventory sold wasn't enough to offset all costs associated with bringing their products to market.



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[FreedomEclipse]

Here's a company that put all their eggs in one basket

 

[the54thvoid]

Even those that knew little about mining could easily foresee the reduction in profitability as more people* joined the gold rush. Why would tech companies be so short-sighted?

*People - when I say people, I mean mining units and by units, I mean one card. Consider the vast number of massive mining conglomerates and the drop in GPU profitability was easy to see coming.

Unless I'm about to be corrected?

 

[TheLostSwede]

On top of this, the motherboard department overestimated demand and they now have too much stock.
Apparently it's so bad that they don't expect to have sold the stock until Q2 next year, due to Intel's CPU supply issue.

My guess is that some heads will roll at the higher management part of the company.

 

[Deleted member 158293]

Well if nvidia said only a small number of cards were affected, why is Gigabyte complaining?

Curious which models of motherboards are over produced...

Edit

 

[windwhirl]

And this is why you don't put all your eggs in one basket.

I would have expected oversupply of mining GPUs, not motherboards. Can't they simply repurpose them for the mainstream market?

Edit: Nevermind, I misunderstood.

 

[trog100]

its easy to be wise after the event..

trog

 

[TheLostSwede]

Well if nvidia said only a small number of cards were affected, why is Gigabyte complaining?

Curious which models of motherboards are over produced...

Edit

No idea, most of them I would guess, considering they have about six months worth of stock.

Obviously all of the motherboard manufacturers are suffering a bit right now, but no-one as badly as Gigabyte.

 

[Totally]

its easy to be wise after the event..

trog

Nope, anyone with two cents to rub together was waiting with anticipation on when the pretty obvious bubble was going to burst, the smart stayed clear the opportunistic jumped out as quickly as they jumped in, and the dumb simply rode it out.

 

[trog100]

Nope, anyone with two cents to rub together was waiting with anticipation on when the pretty obvious bubble was going to burst, the smart stayed clear the opportunistic jumped out as quickly as they jumped in, and the dumb simply rode it out.

did you play the crypto game.. i did.. and i repeat its easy to be wise after the event.. he he..

trog

 

[Deleted member 158293]

No idea, most of them I would guess, considering they have about six months worth of stock.

Obviously all of the motherboard manufacturers are suffering a bit right now, but no-one as badly as Gigabyte.

Having miss forcast by 6 months is tantamount to gross negligence. What kind of executive would jeopardize their career (or more) with such a company jeopardizing decision? And it does not appear to be mining related, unlike nvidia which is probably also in a boatload of upcoming trouble but at least with more revenue.

Something smells bad at Gigabyte... why create sooooo much inventory without at least a pre-sold portion to offset costs?

 

[lexluthermiester]

Following Crypto Bust, GIGABYTE May Hit the Red Line in Earnings

HA! Who called it? LOL!

 

[droopyRO]

What is stopping them from selling the cards/boards, cheaper than MSRP, like a clearance sale, are there some legal issues ?

 

[lexluthermiester]

What is stopping them from selling the cards/boards, cheaper than MSRP, like a clearance sale, are there some legal issues ?

Nothing, they're just greedy.

 

[bonehead123]

Me smellz what da rock is cookin... a friggin giganormous firesale, followed by a big shuffle of upper mgmt

 

[JaymondoGB]

I dont feel sorry for any of them, we all knew the Crypto thing was time limited, and they made a whole lot of money out of it short term, but like everything, highs dont last ever, (just ask Apple). A whole load of gamers paid over the odds for cards during the period. But the market isnt that big anymore, and now its over, its going to strink back to its normal size. There wont be the need for all this stock.

 

[hat]

The hardware manufacturers can't win though, can they? We were wielding torches and pitchforks when everything was out of stock or priced sky high, and now that they produced a ton of shit and they're sitting on all this inventory that's not moving, we say "let them burn".

 

[Paganstomp]

 

[Reeves81x]

did you play the crypto game.. i did.. and i repeat its easy to be wise after the event.. he he..

trog

everybody loses that game, why would anyone have played? ;P Lack of foresight perhaps. lol.

 

[toyo]

The hardware manufacturers can't win though, can they? We were wielding torches and pitchforks when everything was out of stock or priced sky high, and now that they produced a ton of shit and they're sitting on all this inventory that's not moving, we say "let them burn".

Of course they can win. All it takes is estimating demand correctly and anticipating it, and understanding that 18K USD for Bitcoin is not gonna last, not to mention it wasn't mined on GPUs regardless, it was just carrying the other currencies via success being shared and free publicity.
If these people would have created enough cards, and sold them at the same price without getting greedy, without overmanufacturing enough for a year forward, they'd be beloved by customers. But when profit and growth is all that matters, and customers are just there for you to milk, you cannot expect them to love you and respect you. They will begrudgingly buy if they need stuff, but the hatred will be burning deep inside.

everybody loses that game, why would anyone have played? ;P Lack of foresight perhaps. lol.

Not really, you could win. I won (some). When Bitcoin was 17K I sold everything. Lost a bit as it grew afterwards for another 1K, but I don't care. I knew it will crash after. It was just so easy to see. As usual, you just need to face the greed and win against it, or you will always lose.

 

[windwhirl]

The hardware manufacturers can't win though, can they? We were wielding torches and pitchforks when everything was out of stock or priced sky high, and now that they produced a ton of shit and they're sitting on all this inventory that's not moving, we say "let them burn".

When you put it like that, consumers look like whiny bipolar a**holes. Then again, some people say "vote with your wallet" and all that...

 

[R-T-B]

everybody loses that game, why would anyone have played? ;P Lack of foresight perhaps. lol.

I mean, not really. First litecoin run I pretty much didn't need my job I was doing so well. This time I did badly, but I knew I would and did it mostly for the articles until everyone declared them spawn of satan... But point still stands if you have half a brain this market isn't that complicated, really. It's like any other. You simply do not invest on a high...

 

[Fatalfury]

looks Gigabyte has over-production of motherboard & GPU..
i guess thats y they didnt even bother to release RX 590..

1)Overpriced 9000 series of intel prod will not sell thier Z390 mobos well.
2) Old AMD GPU are not selling well.
3) OLd Nvidia GPU are overstock due to cyptomining crash.
4) New RTX lineup Expensive & few dead cards..

Looks like they got affected in all sides..damn

 

[trog100]

When you put it like that, consumers look like whiny bipolar a**holes. Then again, some people say "vote with your wallet" and all that...

bipolar vindictive and with an exaggerated sense of entitlement.. he he..

trog

 

[FordGT90Concept]

Everyone knew this was coming. It's a "damned if you do and damned if you don't" situation. Runs on products are good in the short term (quick influx of cash) but bad in the long term (never know when you're going to be overstocked).

You simply do not invest on a high...

But you never know when "high" is high. Such is the case with any volatile investment.