US officials finally admit that Bitcoin will be regulated

The picture shows Bitcoin officially recognized by the United States. Photo/Reuters

Creative and F-Silicon monthly combined revenue

The virtual currency "Bitcoin" that has caused a global craze has finally been officially recognized by the United States! The Commodity Futures Trading Commission (CFTC) announced last week that it will be regulated as a commodity like crude oil and wheat. With the official "certification" of Bitcoin, Bitcoin mining machine application-specific integrated circuits (ASICs) will accelerate the transition to the most advanced 16-nanometer fin field-effect transistor (FinFET) process, and IC design service companies Creative (3443) and F-Semiconductor (3661), which hold more than 90% of the world's related orders, will have great business opportunities.

Foreign media reported that market participants have long discussed whether Bitcoin should be defined as a commodity, but the CFTC has been considering whether this cryptocurrency is within its jurisdiction. Last week, the CFTC announced charges and reached a settlement against Coinflip, a Bitcoin exchange that provides options trading, and also determined that Bitcoin and other virtual currencies will be defined as commodities.

In other words, the CFTC will regulate Bitcoin futures and options trading in the future, and will initiate litigation against violators if futures manipulation or other violations occur. On the other hand, it means that the US government has recognized the value of Bitcoin and that it has the same status as commodities such as crude oil and wheat.

Bitcoin issuance does not require a third party, but is generated by the mines that contain Bitcoins every 10 minutes. Once the data in the block is calculated, it can be obtained. Since the output of Bitcoin in each region will be reduced by half every 4 years, the "miners" who participate in the calculation will have to use professional "mining machines" to "mine". Mining requires high-performance computing, so the market for ASICs designed specifically for mining machines has grown rapidly in recent years, and has been commissioned to IC design service companies such as Creative, F-Silicon, and Faraday for commissioned design (NRE) and mass production.

In fact, in the first half of this year, due to the poor exchange rate of Bitcoin to the US dollar, the sales momentum of mining machines was not strong, and the process miniaturization of Bitcoin ASIC also slowed down. Now that Bitcoin has been officially recognized by the United States, the demand for mining has the opportunity to grow strongly, which will also drive the demand for Bitcoin ASIC. It is obvious that in the second half of the year, ASIC will accelerate into the 16nm generation.

TSMC's IC design service company Creative Electronics' consolidated revenue in the first half of the year reached 3.68 billion yuan, with a net profit of 200 million yuan after tax and an EPS of 1.49 yuan, which was not as good as market expectations. As for the revenue in July and August, it was not eye-catching. However, legal persons expect that the company's 16nm NRE and silicon intellectual property demand will be strengthened as the demand for Bitcoin ASIC increases, and the operation should have successfully bottomed out.

F-Alchip (3661) announced that its net profit after tax in the second quarter reached NT$16 million, officially turning from loss to profit and getting out of the operating trough. The Bitcoin mining machine ASIC developed by F-Alchip in cooperation with Swedish Bitcoin mining machine manufacturer KnCMiner has been mass-produced using TSMC's 16nm wafers since July. Its revenue in August reached NT$377 million, a new high this year, and will become the driving force for revenue growth in the third quarter.