What is the impact of Taiwan authorities' investigation into Bitmain? TSMC is the key to the key

Wu said author | Colin Wu

Editor of this issue | Colin Wu

The ill-fated Bitmain has encountered new problems.

According to Bloomberg, Economic Daily and other reports, Bitmain entered the AI ​​industry in 2017 and was suspected of setting up a company in Taiwan without permission and poaching more than 200 engineers from multiple listed technology companies over the past three years. The New Taipei City Investigation Office launched a search and interviewed 19 people involved in the case. The poached people came from MediaTek, ASE, etc., and some of the poached engineers had worked for TSMC.

Later, Taiwanese media quoted rumors that Bitmain was preparing to mass produce a new 5nm product at TSMC, and it was expected to start production in the third quarter with a production capacity of about 5,000 wafers. TSMC not only charged Bitmain all the costs of mass production, but also required it to sign a special version of the declaration that there would be no infringement of trade secrets and intellectual property rights, otherwise it would not be allowed to produce wafers, which showed that TSMC looked at Bitmain very differently.

However, on March 12, TSMC responded to Wu's question about whether this incident affects the relationship between Bitmain and TSMC, saying: We cannot respond to the case under investigation. TSMC does not comment on a single customer's specific orders, but has always been committed to the spirit of establishing partnerships with customers in order to become a long-term and important partner that customers trust and rely on for success.

TSMC's reply seems to indicate support for Bitmain. The above-mentioned gossip is more like speculation by the Taiwanese media. As the market is currently in a bull market, mining machine manufacturers charge a large amount of advance payment. In order to obtain more chip production capacity, they can naturally prepay the wafer factory fees; and the declaration of intellectual property rights is likely to be signed by all companies.

In fact, Bitmain has caused many disturbances in Taiwan before. Due to the crazy poaching of MediaTek personnel, in mid-2018, MediaTek officially sent a letter to Xindao Interconnect (Bitmain's Taiwan-related company) to remind the company to respect the intellectual property rights and business secrets of its peers to avoid breaking the law. Employees from other companies who jumped to Xindao Interconnect also received the same reminder document.

The S19j currently being sold by Bitmain uses TSMC's 5nm chip, while the S19PRO and S19 previously used TSMC's 7nm chip. Currently, TSMC's 7nm production capacity is extremely scarce. Although 5nm is unstable, there is still some excess capacity due to factors such as Apple's order cuts. It is currently impossible to confirm whether the rumor in the Taiwanese media that "5,000 pieces (100,000 mining machines) per month is true. Another rumor is "2,000 pieces (40,000 mining machines) per month."

Relevant professionals told Wu Blockchain that the current turmoil may not have a big impact on Bitmain. Taiwan's main concern and involvement this time is the AI ​​chip part rather than the mining machine chip, which only occupies a very small part of Bitmain's business. Bitmain originally planned to split the AI ​​chip and then list it on the market, so the impact on the mining machine business and listing may not be significant.

The real risk comes from the United States. Due to the frequent negative news about Bitmain, it may attract high attention from the United States and suffer troubles similar to other AI and chip companies. But the good news is that the new US government is currently easing Sino-US relations, so the risk in this regard is not too high. If it were the Trump era, it would be very likely that "small things would become big" instead of big things becoming small.

A person close to Bitmain said: "Mr. Zhan (Zhan Ketuan), who always has good luck, seems to always be able to turn danger into safety.

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