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