SMIC returns to Kechuang and tries mining machines many times but the performance is insufficient

On the evening of May 5, SMIC announced that it would apply to the Shanghai Stock Exchange for approval of the listing and trading of RMB shares on the Science and Technology Innovation Board. The announcement disclosed that after deducting the issuance costs, the funds raised from this issuance of RMB shares are planned to be used for the "12-inch chip SN1 project", with the purpose of producing 14nm and more advanced process chips. . Against the backdrop of the Sino-US trade war, SMIC's process improvement will enable it to cooperate with more mining machine companies. In the short term, it should be dominated by small currencies, because the process gap between Bitcoin mining machines and TSMC or Samsung is too large.

At the end of March this year, SMIC released its 2019 annual financial report, recording total revenue of approximately US$3.116 billion and a gross profit margin of 20.6%; SMIC's attributable net profit was US$235 million.

Previously, Wu Blockchain exclusively disclosed that the 14nm mining chip jointly developed by SMIC and Canaan Technology has completed testing and will be mass-produced and shipped in the second quarter of this year. The specific chip type may be a small currency mining machine. But later, an insider revealed that whether it will be mass-produced depends on the market and performance.

According to industry insiders, this is not the first time that SMIC has tried to enter the mining machine field. In early 2018, SMIC once cooperated with well-known people in the Dongguan cryptocurrency circle, but due to the sharp drop in the price of Bitcoin, investors withdrew their capital. Although the chip was designed, it was not mass-produced. SMIC has been actively entering the mining machine industry and has also had testing cooperation with other mainstream mining machine manufacturers, but there is no mainstream mass-produced model. The fundamental reason is that the performance is insufficient.

Unlike chips in other industries, mining machine chips pursue extreme performance, so the process is the most important consideration. The current mainstream in the industry is TSMC's 7nm chips used by Bitmain and Samsung's 8nm chips used by Shenma and Xindong. Bitmain has completed the test of TSMC's 5nm. However, SMIC can only reach 14nm at present. Although the cost has certain advantages, it cannot make up for the performance disadvantages brought by the process.

However, in the context of the Sino-US trade war, SMIC's position has become more prominent. The US export control requires that if the technology of the product originates from the United States and meets certain standards, it is not allowed to be exported. If this principle is strictly followed, TSMC and Samsung may not be able to provide services to Chinese chip companies. Some analysts believe that SMIC will benefit from the "domestic substitution" in the context of the trade war, and it will be a trend to cooperate with more mining machine manufacturers in the future.