Mining machine giants compete for 7nm process, is TSMC struggling to supply?

The price of digital currency has been volatile recently. The price of Bitcoin has fallen rapidly from its high point and once faced a battle to defend the $7,000 mark. The market has doubts about the digital currency market. For mining machine providers, finding a more efficient mining solution and improving the shortcomings of the previous generation of mining machines so that miners can mine at a lower cost can not only increase the enthusiasm of miners, but also solve the problem of the collapse of digital currency prices, the unprofitability of miners, and the collapse of the popularity of the entire mining market.

According to reports, Bitmain co-founder and CEO Zhan Ketuan came to Taiwan last week and visited TSMC, Powerchip and other supply chain partners to seek cooperation for a new generation of high-performance mining chips and discuss the direction of cooperation after Bitmain's transformation and development of artificial intelligence (AI) applications. According to reports, Zhan Ketuan's visit to Taiwan was personally received by Powerchip founder and CEO Huang Chongren and Wei Zhejia, who will be promoted to president of TSMC, highlighting the importance the two companies attach to Bitmain.

However, as of the 3rd, TSMC has not responded to whether Zhan Ketuan visited, and Bitmain and Powerchip spokespersons said they were not aware of the relevant schedule. TSMC is expected to hold a shareholders' meeting on the 5th, which will not only be a farewell show for Chairman Morris Chang before his retirement, but also the future cooperation and development with Bitmain will also be an issue of concern to small shareholders.

The industry's rumor that Bitmain is visiting Taiwan is mainly because the biggest cost for miners is the high power consumption during mining. Therefore, the new generation of excavators most need lower energy consumption and higher computing power. TSMC's 7nm process technology can improve the performance of mining machines while reducing power consumption.

In addition, Bitmain is transforming to AI, which has a huge demand for ASIC and memory. Bitmain has previously reached a strategic cooperation consensus with Powerchip on memory, with Powerchip's subsidiary AIPU providing the memory required for Bitmain's future AI applications, and Powerchip being responsible for foundry.

If the news that Jihan Wu visited TSMC and Powerchip is true, it means that Bitmain will continue to strengthen its cooperation with partners such as TSMC, dispel rumors of order cuts, affect the future dynamics of digital currency, and also affect the orders received by mining-related companies such as Creative and Faraday.

In addition to Bitmain, Canaan Creative, which has the second largest market share after Bitmain, is also actively developing and producing 7nm mining machines. Canaan Creative held a supplier conference last month and exposed the supply chain list for the first time. Among them, Taiwan's suppliers mainly include TSMC, Creative, Lelon, and Polytron. At the supplier conference, Canaan Creative awarded the biggest prize to TSMC. The main reason is that in the cooperation between the two parties on ASIC, TSMC's advanced process power saving performance has become the main contributor to Canaan Creative's layout of the mining machine market.

Recently, the supply chain reported that Canaan Creative's new generation of ASIC is also being produced at TSMC, jumping from the previous generation's 16nm to 7nm, and plans to start mass production in July. In terms of the use of advanced processes, Canaan's progress is faster than its top competitor Bitmain. However, this news has not been confirmed by TSMC.

It is also known that Canaan Creative's revenue exceeded RMB 1.2 billion and profit exceeded RMB 300 million last year, with annual growth rates of 20 times and 125 times respectively. This year's revenue and profit are expected to reach RMB 10 billion and RMB 5 billion, and it is rumored that it may apply for an IPO in Hong Kong. Like Bitmain, Canaan Creative will also focus on AI chips.

Finally, it should be pointed out that since ARM's recently released new-generation central processing unit architecture "Cortex-A76" will also adopt TSMC's 7nm process, and Apple's A12 processor for this year's new iPhone is very likely to adopt the 7nm process, TSMC may also take all the orders, and TSMC's 7nm production capacity supply may be tight in the second half of the year.