Jensen Huang, President and CEO of Nvidia, speaks during the company’s event at the 2019 Consumer Electronics Show in Las Vegas on January 6, 2019.
David Paul Morris | Bloomberg | Getty Images
Nvidia announced Thursday that it will launch a new series of semiconductors specific to ether mining, the second largest digital cryptocurrency.
The new type of chip is called CMP or cryptocurrency mining processor. The first cards will go on sale in March, an Nvidia spokesman said.
Ether mining is a process in which computers solve complicated mathematical programs to help run the Ethereum cryptocurrency network. In return, the miners get ether, the digital currency that works on the Ethereum network. Ether hit a record high on Thursday, with a 160% increase to date, which topped $ 1,914.
Ether mining algorithms work best on graphics cards, which is the type of chip by which Nvidia is known. Miners usually buy multiple graphics cards and put them on a single machine to maximize their return.
Last fall, Nvidia launched a new series of graphics cards marketed in PC gamers that have been constantly sold out. The semiconductor industry is also facing a general shortage.
Thursday’s announcement suggests that at least part of Nvidia’s chip demand came from cryptocurrency miners, not just gamers.
“CMP (non-graphics) products are sold through authorized partners and optimized for the best mining performance and efficiency, ”wrote Matt Wuebbling, head of marketing at GeForce at Nvidia.
Nvidia said the latest chip in its series of gaming graphics cards, the RTX 3060, will be modified when it is released later this year, so it will not extract the ether effectively. Cards that have already been sold, such as the RTX 3070 or RTX 3080, do not have the same limitations, the Nvidia representative said.
“RTX 3060 software drivers are designed to detect specific attributes of the Ethereum cryptocurrency mining algorithm and limit the hash rate, or cryptocurrency mining efficiency, by about 50 percent,” Nvidia said in a post on the blog.
Graphics cards were first developed to enable high-definition computer games, but are increasingly essential to new technologies such as artificial intelligence. Its usefulness in ether mining isn’t new either: In 2017, Nvidia said it made hundreds of millions of dollars a quarter selling chips to cryptocurrency miners.
“Cryptocurrency and the blockchain have come to stay. The need for the market will grow and, over time, it will become quite large,” Nvidia CEO Jensen Huang said in 2017.
PC games are also growing strongly. Consumer spending on PC gaming hardware increased 62% in 2020, according to an estimate by the NPD group. A graphics card is often the most expensive part of a gaming PC.