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NVIDIA Stunts Ethereum Mining on GPUs and Launches Custom Mining Chips

By Anders Bylund - Updated Feb 18, 2021 at 3:36PM

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The chip designer wants to put more chips in gaming rigs while also serving cryptocurrency miners.

Semiconductor designer NVIDIA (NVDA -2.95%) has recognized the current shortage of graphics processing units (GPUs) on store shelves and is taking some steps to alleviate the issue. Upcoming GPUs will have their Ethereum (ETH -4.30%) hash rates cut in half, and the company is also launching a separate series of chips specifically designed for cryptocurrency mining.

Graphics card prices have skyrocketed in recent months, driven partly by high demand from cryptocurrency miners amid rising currency prices. On top of that, the third-party manufacturers that turn NVIDIA's designs into physical products are running their manufacturing lines at full speed but still have to leave many orders on the table. This problem has triggered shortages across the semiconductor industry as a whole, including NVIDIA. Diverting more GPUs into the gaming market may alter the supply-and-demand balance and lower consumer-level prices.

When the NVIDIA GeForce RTX 3060 GPU hits retail outlets on Feb. 25, the associated software drivers will detect processes attempting to mine Ethereum shares, intentionally halving the effective hash rate for these programs. The idea is to make GPUs less interesting for cryptocurrency miners, thereby leaving a larger number of cards available for gamers.

The stunted mining performance will not apply to existing NVIDIA products, so someone could always work around this move by using older drivers without the intentional hash rate limitation.

A man stands on a road marked Cryptocurrency, which rises up to form a huge question mark in the sky.

Image source: Getty Images.

At the same time, NVIDIA wants to capture the demand for cryptocurrency mining hardware and is launching a professional mining series known as the NVIDIA CMP (for Cryptocurrency Mining Processor). These chips don't do graphics and won't support display outputs at all, allowing miners to pack more of these chips into a limited space.

They will also run at lower voltages and frequencies, making them more cost-effective for large-scale mining operations. These products will hit the market over the next several quarters. CMP pricing and retail channels remain to be seen. NVIDIA says that the production of CMP chips won't cut into the production rates of GPUs.

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