The problem with fads is that their effects are felt even after they end. For ordinary people, that usually results in embarrassing stories, photos and tattoos at worst. For companies like ASRock, though, jumping on fads like the cryptocurrency mining boom of 2018 can have real consequences.
DigiTimes reported today that ASRock expects its profits to be “dampened” by its graphics card inventory. The company will reportedly offer price cuts on its graphics cards to work through that inventory, according to anonymous sources, but it doesn’t expect that to be done until the second half of 2019.
ASRock started making graphics cards in 2018 after demand skyrocketed because of cryptocurrency miners hoping to make their fortunes one “coin” at a time. You probably remember what happened next: cryptocurrency values plummeted, miners could no longer afford expensive rigs and companies were left with a bunch of graphics cards for which there was no market.
The cryptocurrency bust’s effects were felt throughout the industry. Nvidia and AMD both suffered; so did the manufacturers who use their GPUs in add-on cards. Combine that with declining sales for pretty much every component, from CPUs to motherboards, and it’s no surprise ASRock is affected.
But the good news for the company is that its graphics card problem is expected to be the only mark against it. DigiTimes said that ASRock is predicted to keep its motherboard, industrial PC and server shipments relatively stable this year, despite the downturns experienced by those markets at large.
The outlet also cited “market watchers” who believe AMD plans to ship Navi GPUs in the third quarter of 2019. That could be good news for ASRock, DigiTimes said, because the company’s Radeon VII graphics card is purportedly selling well. Even if that link seems tenuous—selling a bunch of bananas doesn’t mean avocados will enjoy the same success—it probably couldn’t hurt ASRock’s efforts either.
There’s also the possibility of another cryptocurrency becoming the darling of miners and investors and all the people who are willing to exchange their hard-earned cash for a cryptographic “coin.” That’s the other thing about fads: they tend to cycle back around. Maybe it's only a matter of time before we’re all wearing parachute pants and mining Ethereum again.