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According to Digitimes' "industry sources," business prospects look bleak for DIY motherboard and GPU manufacturers in the first half of 2019. Thanks to the "sustained chill in the crypto mining sector, the supply shortages of Intel CPUs, and lackluster buying sentiment at terminal markets amid the US-China trade war," inventory levels are much higher than usual, and profits are down. Asus's third quarter earnings, for example, are down 43% year on year, and Gigabyte's 2018 graphics card shipments are expected to drop by nearly a million units to 3.65 million. Whether this translates to lower (or higher) prices on shelves remains to be seen, but these components likely won't suffer from the stock shortages that some specific CPUs and GPUs are facing now. Interestingly, the same sources postulate that Nvidia and Intel are likely to "raise chip prices to maintain profitablity."
Revenue prospects for the fourth quarter are further dimmed by lingering sluggish demand from the DIY market, poor growth momentum in the China market and insignificant performance upgrades for Nvidia's new GPU platforms bearing relatively high price tags, the sources continued. Makers of motherboards and graphic cars are expected to face tough challenges in the first quarter of 2019, when makers with higher graphic card shipment ratios, such as Gigabyte and TUL, may see their profitability halved on quarter due to high comparison bases of a year earlier. This, coupled with Nvidia and Intel likely to raise their chip prices to maintain profitability, may drive makers into a bleak profitability period starting in 2019.
Revenue prospects for the fourth quarter are further dimmed by lingering sluggish demand from the DIY market, poor growth momentum in the China market and insignificant performance upgrades for Nvidia's new GPU platforms bearing relatively high price tags, the sources continued. Makers of motherboards and graphic cars are expected to face tough challenges in the first quarter of 2019, when makers with higher graphic card shipment ratios, such as Gigabyte and TUL, may see their profitability halved on quarter due to high comparison bases of a year earlier. This, coupled with Nvidia and Intel likely to raise their chip prices to maintain profitability, may drive makers into a bleak profitability period starting in 2019.