Crypto Mining Made Up 10% of AMD's Revenue in Q1

Cryptocurrency mining demand accounted for as much as 10% of AMD's first-quarter revenue this year, according to the chip maker.

"The strength in Radeon products was driven by both gaming and blockchain demand. We believe blockchain was approximately 10% of AMD revenue in [the first quarter of] 2018," chief financial officer said Devinder Kumar during an earnings call on Wednesday after AMD revealed that it made $1.65 billion in first-quarter revenue, a 40% increase year-over-year.

Kumar noted that the combined gaming and blockchain demand contributed to a 95% boost year-over-year for its GPU and computing markets. That said, Kumar indicated that the company believes that it will see a "modest decline in graphics [revenue] due to blockchain."

All in all, AMD anticipates less than 10% of its 2018 revenue will come from cryptocurrency miners.

"Based on the strength of our business momentum, for the full year 2018, we now expect revenue to increase by mid-20s[%] over 2017, driven by the ramp of our new products. Blockchain revenue to be mid to high-single-digit percentage of revenue for 2018," he said during the call.

Looking past the figures, however, CEO Lisa Su struck a somewhat optimistic tone for AMD's prospects in the blockchain infrastructure sector.

She remarked:

"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."

"They're not necessarily buying just for mining," Su continued. "I think, most people are comparing sort of this blockchain time period to the last one which was a couple of years ago and I think there are a couple of important differences. I think the first one is that there are multiple currencies and multiple applications that are being used. And what we've seen is that people who are mining do go from one currency to another depending on what's happening."

The only unknown factor at play involves retail sales, as Su said it was "hard to tell" whether retail sales go toward gamers or miners. But even there, AMD believes it has a close approximation of the demand.

"I think the breadth of the blockchain applications and also the breadth of the customer base give us that belief," she later concluded.

Cryptocurrency mining screen image via Shutterstock