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[Shanghai / Hong Kong, 22 de Reuters]- The global shortage of semiconductors is affecting the production of computer equipment “platforms” to “mine” cryptoassets (virtual currency) Bitcoin. Demand for platforms is increasing, in part due to the sharp rise in Bitcoin prices, and prices are increasing.
Chinese SMEs, which have dominated the mining industry, have been shut out without catching up with high prices, accelerating the restructuring of the industry. It may be a large, well-funded company outside of China that will benefit from the rise of Bitcoin.
Mining is attracting the attention of merchants and users because the amount of Bitcoin newly acquired and sold by miners affects supply and price.
Bitcoin traded on the 22nd at around 1 bitcoin = $ 32,000 (around 3.32 million yen). It’s 20% lower than the all-time high from two weeks ago, but still 700% higher compared to the March low ($ 3,850).
“We don’t have enough semiconductors to support mining rig production,” said Alex Ao, vice president of semiconductor design and mining equipment giant Inosilicon.
More and more miners are using specially designed high-performance platforms to approve Bitcoin transaction data.
However, according to Mr. Ao, major manufacturers of specially designed semiconductors for drilling rigs, such as TSMC and Samsung Electronics, are likely to give priority to supplying semiconductors for home appliances. The demand for semiconductors in these sectors is more stable than that for drilling equipment.
Global supply and demand for semiconductors is low and production of various products, such as cars, laptops and mobile phones, is hampered.
The profitability of mining depends on the price of Bitcoin, the cost of electricity used on the platform, the efficiency of the platform, and the computer processing power required to mine Bitcoin.
Gordon Chen, co-founder of mining company GMR, said that demand for rigs increased as Bitcoin prices soared. “If the price of gold goes up, the demand for shovels goes up, and if the price of milk goes up, the demand for dairy cows goes up,” he said.
Ray Ton, managing director of Babel Finance, a mining lender, said: “Almost all the major miners are looking for rigs in the market and paying high prices to buy used equipment.” Products ordered by many miners are said to be delivered in August or September, and “a lot of purchases in North America cause a supply shortage in China.”
Most of the company’s products are out of stock, according to the website of Bitmain, one of the largest drilling rigs in China.
According to a Jiangsu company that operates drilling rigs, prices on the second-hand market have risen between 50% and 60% over the past year and new prices have more than doubled. “It is natural to see an increase in Bitcoin prices,” he said.
Due to the rise in Bitcoin prices, some companies are unable to mine. According to Atlas Mining founder Raymond Yuan, rising costs are driving out small and medium-sized mining companies. “Institutional investors have the advantage in terms of size and management, but individual investors who cannot keep up will be eliminated,” he said.
Atlas has invested over $ 500 million in crypto asset mining and plans to continue making large investments in the future.
According to Wayne Tsao, COO of the research firm Token Insight, many of the major mining companies have bases outside of China, such as North America and the Middle East. “One of China’s strengths was its low electricity prices, but this advantage has disappeared as Bitcoin soared.”
According to Mr. Tsao, China’s share of the global Bitcoin mining market used to be around 80%, but has now fallen to around 50%.
(Samuel Shen reporter and Alun John reporter)
