MediaTek: Bitmain has taken over all of TSMC's 12nm production capacity

According to Jiwei.com , at the MediaTek 2017 fourth quarter financial report corporate briefing today, investors' questions revealed a piece of information: TSMC's 12nm production capacity has been fully occupied by Bitmain. Although many countries and regions, including China, have planned to crack down on digital cryptocurrencies including Bitcoin, the Bitcoin mining craze continues, and the semiconductor industry chain has benefited greatly from Bitmain alone.

In the design phase, Bitmain’s chip sales in 2017 reached a staggering 14.3 billion yuan, second only to Huawei HiSilicon, becoming China’s second largest IC design company. An early miner said that Bitmain’s monthly profit could reach 30 million US dollars in 2017, and it had achieved a net profit of more than 1 billion yuan in the first half of 2017. According to data, Bitmain has successfully developed and mass-produced a number of ASIC custom chips and complete systems, and has mass production experience in fully customized integrated circuit designs with advanced processes of 28nm, 16nm, and 12nm. The most representative of these is its BM chip series used in encrypted digital currency mining machines. Bitmain’s mining machine sales are more than hundreds of thousands each year, and each mining machine uses hundreds of ASIC chips. For example, one of its Antminer S9s uses 189 ASIC chips.

The SOPHON TPU chip BM1680 launched by the company last year is also Bitmain's first dedicated custom chip for artificial intelligence. There are also reports that Bitmain is considering introducing TSMC's most advanced 7nm process to improve the performance of mining chips.

Design service providers such as Creative can be said to be the big winners of this wave of ASIC demand driven by virtual currency. Last year, the revenue contribution of related businesses increased by about three to four times compared with the previous year. The ASIC business opportunities brought by Bitcoin have also become a target for many IC design companies to compete for. Alchip said that it is in contact with several international Bitcoin mining machine manufacturers for orders. If everything goes well, there is a chance that it will start to contribute revenue in the second quarter of this year.

In the wafer foundry segment, TSMC alone has made a lot of money. According to TSMC's latest quarterly financial report, cryptocurrency mining-related business revenue is around US$375 million per quarter, accounting for 5.1% of the group's sales. However, as the price of cryptocurrency continues to appreciate, this business segment is likely to be growing rapidly, growing to about 10% in the first quarter of this year. The HPC demand brought by the continued mining boom is expected to boost TSMC's revenue in 2018, becoming a timely relief for TSMC under the impact of the iPhone X reduction in orders.

TSMC relies on its advanced process technology and is favored by the world's top three cryptocurrency mining machine manufacturers. In addition to Bitmain, Canaan Creative's Avalon and Ebang Technology's Ebit also benefit from it. Analysts estimate that 90% of the world's ASIC chips are produced by TSMC.

It can be said that the contribution of mining to TSMC is no less than that of a new iPhone, making TSMC the biggest winner among global wafer foundries. Samsung also recently revealed that it had signed a contract with a Chinese Bitcoin mining hardware company to start producing Bitcoin mining chips, which has become Samsung's latest source of profit and once again confronted TSMC head-on. Foreign media pointed out that Samsung had completed the research and development of special ASIC chips for mining last year, and had signed a contract with Russian Bitcoin mining operator Baikal to supply 14nm ASIC chips. Samples have been tested and are scheduled for mass production in January this year.

However, as the cost of electricity and other factors continues to rise, the requirements for Bitcoin mining ASICs are getting higher and higher. Many customers have planned to upgrade from TSMC's 12nm advanced process to 7nm. Currently, TSMC's 7nm process technology is far ahead of Samsung. Based on this, it is estimated that the number of orders that Samsung can get in the future should not be large.

In the packaging and testing phase, the previous article of Jiwei.com has disclosed that the news obtained by Jiwei.com from the supply chain shows that this year, the mainland packaging and testing industry can benefit about 3 billion yuan from Bitmain alone. At present, the companies that do packaging and testing for Bitmain chips include ASE, Changdian, Tongfu Microelectronics and Huatian, which adopt Flip-Chip process packaging. Among them, Tongfu Microelectronics and Huatian have a daily volume of about 1kk, ASE and Changdian are slightly more, with a total of up to 5kk per day. In terms of substrates, Bitmain's main substrate suppliers are Zhuhai Yueya, which is about 150kk per month, and Taiwan Hengjin is about 40kk per month. However, this production capacity is far from meeting Bitmain's needs.

Taiwan Powertech also disclosed at a recent press conference that some customers have come to it, and currently there are two mining machine customers, contributing NT$400 million to NT$500 million in revenue. In addition to the above four major packaging and testing companies, Siliconware Precision Industries and Amkor are also involved. Including Powertech, the world's top seven packaging and testing companies are all sharing the feast of Bitcoin mining.

In terms of packaging and testing machines, Nomura Holdings analyst Tetsuya Wada wrote in a report that Japanese semiconductor manufacturing equipment manufacturers Ulvac Inc. and Advantest may also benefit from the rise in Bitcoin. Jiwei.com learned that Advantest occupies the main market, while Taiwan companies and Tianshui use the lower-cost Chroma (Taiwan Chroma Electronics). In comparison, Advantest's machines are more expensive. Although Chroma is cheaper, it is a pity that the application range is too narrow, so packaging and testing factories dare not invest in large-scale purchases.

It can be said that the packaging and testing companies are both excited and entangled about Bitmain's crazy orders. The huge orders are of course a good thing, but if they have to buy too many test machines, they are worried about whether this trend can continue. Once there is a cliff-like decline, the packaging and testing companies will find it difficult to bear it.

The mining chips in the mainland have driven the participation of the entire semiconductor industry chain in the world. So far, Bitcoin mining is still hot, and the early investors have already made a lot of money. However, there are still many opportunities in the semiconductor industry chain. The key is whether they can seize them. Whether Bitcoin is a scam or not will be known in a few years. Now the semiconductor supply chain is happy to make money on the one hand, but also worried on the other. "Sweet troubles" can be said to be their true portrayal.