chipmaker chokes off crypto miners
Cryptocurrencies,  Technology

Top chipmaker chokes off crypto miners

Taiwan’s TSMC is limiting the number of chips it will supply to mining hardware producers because of extreme swings in demand

Computer chip manufacturing giant Taiwan Semiconductor Manufacturing Company is reportedly limiting the supply provided to firms involved in cryptocurrency mining.

According to a March 5 article by English-language local news outlet China Money Network, TSMC is limiting its manufacturing output to mining hardware producers because their demand is subject to extreme swings. Bitmain was reportedly one of TSMC’s main customers two years ago, but then cut its orders significantly when the crypto bear market started.

Now, TSMC is met with high demand for silicon to be used in cryptocurrency mining operations again, due to the ongoing crypto asset bull market. Still, the silicon manufacturer is said to be prioritizing stable demand from smartphone makers over crypto mining hardware manufacturers.

As a result, major mining hardware manufacturers cannot meet customer demand. 

TSMC reportedly decided to avoid making cryptocurrency mining hardware producers part of its core customer base as their highly unpredictable demand can cause shocks to its supply chain. 

Of course, the silicon manufacturer is also seeing high demand from other market segments—which means it cannot meet the demand of multiple industries, and must be choosy.

The website of the world’s top cryptocurrency application-specific integrated circuit (ASIC) producer, Bitmain, shows that most of its products are currently sold out and the top-of-the-line ASICs purchased in November 2020 will be delivered in May.

Such a shortage is to be expected after multiple announcements like crypto mining firm’s Marathon Patent Group’s acquisition of $170 million worth of ASICs in one single go at the end of 2020. Bitmain competitor Canaan Creative reportedly received orders for 100,000 mining ASICs from North American customers alone as of February.

However, Bitmain reportedly paid top dollar to gain control over most of TSMC’s output alloted to crypto miners. Consequently, other customers had little access to microchips manufactured by the company. More precisely, other cryptocurrency mining hardware manufacturers were able to only chips with under 100 wafers.

Even though  TSMC is limiting mining customers, the firm’s income from crypto asset-related wafer sales this quarter is still estimated to be comparable to what it earned from leading graphic processing unit producer Nvidia, a major force in GPUs for desktops and gaming machines

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.