The ratings of the main GPU manufacturers have been lowered by leading Wall Street analyst on the news that Bitmain is going to release its new Ethereum ASICs.
A major research company Susquehanna has lowered price targets for Nvidia stock and reduced the rating of AMD shares to negative from neutral. The reason for that is the increasing competition from Chinese cryptocurrency mining hardware producer Bitmain, which has reportedly started producing new ASIC miners for Ethereum and other similar digital currencies.
According to Susquehanna analyst Christopher Rolland, this is likely to reduce demand for GPUs by cryptocurrency mining firms, as ASICs are more efficient if compared to chips from Nvidia and AMD. Approximately 10% of Nvidia and 20% of AMD sales profit now comes from mining companies.
The new ASIC miner will be compatible with Ethash, the Proof-of-Work hashing algorithm used by virtual currencies and will have 3 motherboards, with each motherboard containing 6 ASICs and 32GB of DDR3. The shipment of first chips, Rolland noted, is expected later this year.
“During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC [application-specific integrated circuit] for mining Ethereum, and is readying the supply chain for shipments in 2Q18,” Rolland wrote in a note to clients Monday, according to CNBC.
“While Bitmain is likely to be the largest ASIC vendor (currently 70-80% of Bitcoin mining ASICs) and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development,” he added.
The price forecast for AMD stock was reduced from $13 to $7.50, what is a 29% downgrade from market close on Friday. Meanwhile, the forecast for Nvidia shares was lowered to $200 from $215 at Friday’s close, although its neutral rating was not changed. “Nvidia has a stronger and more durable gaming franchise which would help it work through this potential…