"You can take a break in the second half of the year" Bitcoin mining machine capacity shortage survey

"All the mining machines have been sold out, so we can take a break in the second half of the year."

"I have 50 million here, whoever has the goods can pay immediately!"

Wu said blockchain has learned from multiple channels that mainstream mining machine manufacturers such as Shenma, Canaan, and Ebang have sold out their spot, futures, and even most of their inventory this year. Bitmain is trapped in internal disputes and delayed shipments. Miners who want to buy spot are faced with a situation where there are no machines to buy.

Currently, Bitcoin mining machines are mainly divided into two camps. One is Canaan, Shenma, Xindong, Ebang, etc., which use Samsung's 8nm chips; the other is Bitmain, which uses TSMC's 7nm chips.

The core reason for the Samsung faction is insufficient chip production capacity. Currently, Canaan and Shenma's spot and even futures have been sold out, and even most of the inventory has been cleared, leaving only a small amount of stock.

There are two reasons for the lack of production capacity. The first is that Samsung's own high-end technology level and production capacity are limited, which not only affects mining machines. There are reports that Samsung's orders for mobile phone chip giant Qualcomm may have some problems, so Qualcomm urgently asked TSMC for help in July.

The second reason is that mining machine manufacturers were conservative in their attitude towards the market at the end of last year and the beginning of this year, and their reservations were limited. In the face of the negative factors of Bitcoin halving, mining machine manufacturers were generally not optimistic. Bitmain took the initiative to lay off employees, and each company was also relatively conservative in its capacity reservations. Who would have thought that after a period of sideways trading, the price of Bitcoin once rose above $12,000.

Specific to each mining machine manufacturer:

Canaan's focus in the second half of the year will be on the AI ​​field and the cost-effective mining machines in cooperation with SMIC. At the same time, it will try to seize TSMC's production capacity next year. The newly released A1166PRO futures have been booked until January next year.

Innosilicon claims to launch a new generation of Bitcoin mining machines in the second half of the year, with an energy efficiency of more than 20 W/T and using Samsung 8nm chips. There is no accurate information about this product at present. It may be customized for customers and will not be sold publicly, or it may be a false alarm. At the same time, Innosilicon is promoting a customized version of the Ethereum mining machine.

Yibang’s focus has shifted to government telecommunications projects and cryptocurrency exchanges, and “mining machines will be sold as long as they have production capacity.”

The small and beautiful Shenma continues to focus on the research and development of the next generation of Bitcoin mining machines.

The lack of production capacity has led to a serious shortage of high-computing mining machines such as S19, M30S, and A1166PRO. At the same time, there are many generous overseas customers. At the beginning of the release of M30S, it was stated that most of them had been sold overseas. Bitmain also received a large number of overseas orders, and the amount disclosed to the public alone exceeded 500 million yuan .

Although the spot market has insufficient production capacity, the second-hand mining machine market is very active . Some large miners chose to sell off the previous generation of second-hand mining machines such as M20S and T17 when the price of Bitcoin was at its previous high, making a lot of profit.

As for TSMC, the current 7nm mining machine production capacity is exclusively owned by Bitmain. However, due to the split of Bitmain, the chips are controlled by Wu Jihan and the supply chain is controlled by Zhan Ketuan, and both parties were unable to ship separately before.

Wu Jihan is rebuilding a new supply chain in Shenzhen. Previously, it was stated that some product orders originally scheduled for delivery in June-July 2020 are expected to be postponed to September-October 2020. There are rumors that shipments will start in the near future, but they are mainly to meet the delivery of previous orders.

There was speculation that Huawei's production capacity withdrawal would benefit mining machine manufacturers, but this is not true. Most of Huawei's production capacity has been transferred to Apple and Qualcomm. Due to the poor development of Samsung's 7/5nm and insufficient production capacity, more and more customers have turned to TSMC. Even Intel, which has built its own wafer fab, has invested in TSMC, but it can only get next year's production capacity.

Another little-known reason is that the epidemic has caused a sharp increase in demand in industries such as video, audio, and the Internet , resulting in a surge in demand for high-end process chips such as mobile phone chips, server chips, and video processing, which in turn has snatched away the chip production capacity of mining machines.

Industry insiders predict that TSMC and Samsung's high-end production capacity will remain very tight in 2021. The core reasons are: first, the technological monopoly of wafer fabs; second, the strong demand for high-end processes in industries such as mobile phones and the Internet.

For mining machine manufacturers, there are two things to watch: first, who will launch a mature 5nm chip first. If Bitmain has not split, it will undoubtedly launch the first mining machine using 5nm chips, and the energy efficiency ratio may be around 25 or even 20. Second, whether any mining machine manufacturer using Samsung chips will be favored by TSMC, thereby changing the industry's competitive landscape.

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