Does the American embargo on the most advanced semiconductors bode badly for Bitmain, the first manufacturer of ASICs in the world?
The Flea War
China and the United States have been waging a trade war for years, which on October 7 turned into a technological war. The Middle Kingdom will soon lose its access to the latest generation semiconductors.
American engineers were asked to to cease any cooperation with Chinese industry on pain of losing their nationality. Intel will cease its exports, as will the Dutch ASML. We reported last Tuesday:
“ASML (Advanced Semiconductor Materials Lithography) is the only company in the world to build lithography machines in the extreme ultraviolet that are essential for the manufacture of the best semiconductors (5 nm and less). »
The fine engraving of these machines makes it possible to increase the density of transistors per unit area, in turn reducing the energy consumption and therefore the necessary cooling of the components.
All this to remind us that transistor technology is crucial for the bitcoin mining industry, most of whose production costs are linked to electricity.
Hence the questions about Bitmain, a Chinese company whose production lines are in Malaysia, Thailand and Indonesia. Rumor has it that production of Antminers has ceased. Information to be taken with tweezers:
No S19 XP for Christmas?
Bitmain is currently producing S19 XP Antminers with 5nm chips made by Taiwanese TSMC.
These machines will provide 140 TH/s for a power of 3,010 Watts. That is an energy efficiency of 21.5 J/TH.
That’s a 40% improvement over its previous flagship, the Antminer S19 Pro, which produces 110 TH/s for 3,250 Watts.
Let’s imagine for a moment that the new Antminer S19 XP costs $20,000. And that the price of BTC goes back to 68,000 dollars. Well, given its 140 Th/s, 3010 W power, and five cents per Kilowatt price, this ASIC would fetch nearly $53 a day. It would pay for itself after about a year.
However, with Bitcoin hovering around $20,000, the current returns of the different models are rather these:
It takes 2,857 days to earn $10,000 with such a profit of $3.50 per day. »
But what about the S19 XP if TSMC stops supplying 5nm chips?
For Ben Gagnon, miner at Bitfarms, the “production is planned 12 to 18 months in advance, even 24 months”. In other words, it is likely that the US embargo will not be felt for many months among minors. The first batches of S19 XP are expected to ship in January 2023.
The beginning of the end for Bitmain?
According to expertsChina would be four to five years behind the leaders of the semiconductor industry.
Nevertheless, Bitmain is ahead in building ASICs specific to bitcoin mining. The S19 Pro (“7 nm” chips) is already much more efficient than any competitor.
This is good because the Chinese company SMIC would master 7 nm technology (no need for extreme ultraviolet lithography). However, production in 7 nm has not yet started due to its still prohibitive cost.
It should also be noted that each manufacturer decides on the physical definition of this fineness of engraving. An engraving in “7 nm” at Intel is worth better than 7 nm at TSMC or Samsung.
What made Michael Saylor say during the presentation from the Bitcoin Mining Council quarterly report:
“Political stress, like China putting in place a moratorium on bitcoin mining, is a strong incentive for miner decentralization. And like energy stress, technology stress will simply cause more decentralization. Bitcoin is extraordinarily anti-fragile. »
Indeed, the embargo risks doing the business ofIntel trying to catch up with Bitmain. So much the better for the decentralization of Bitcoin
Hashrate continues to break records
On October 10, the “difficulty” of bitcoin rose by 13.6%. We had not seen such an increase since May 2021.
We are talking here about the difficulty for miners to find new blocks. It increases when more machines come online.
The difficulty adjustment is done every 12 days or so (every 2016 blocks) to ensure that you have a block every ten minutes or so. This difficulty was further adjusted by 3% this Sunday.
This adjustment stabilizes the creation of new bitcoins as rewards for miners. It is currently 6.25 BTC per block, an inflation rate of 1.8% per year.
Currently, the value of hash provided by miners has fallen below $0.07 per Th. A new low low putting many miners under pressure. The five largest US miner stocks are down nearly 90% since the ATH…
That said, NYDIG points out that the “Professional miners’ break-even point remains well below the current bitcoin price.” “The Antminer S19 XP will remain profitable even if bitcoin falls to $8,000 per bitcoin [en assumant 5 centimes KWh] “.
So happy are the American miners who rushed to these S19 XPs despite the bear market. Did anyone know about this technological embargo which most likely promises shortages of Antminers?
This would explain some massive investments despite the bear market. Marathon has for example connected 25,000 S19 Pro last month…
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