We already know that the cryptocurrency industry has changed the world of banking, but now we’re seeing its effects on another industry: semiconductor manufacturing.
Bitcoin and cryptocurrency mining are placing a huge demand on semiconductor manufacturers. Blockchains require massive amounts of processing power and electricity. The difficulty continues to increase periodically, and miners need to constantly improve their hardware to maximize profitability. The chipmakers who can produce the most efficient chips will have an advantage over the competition.
Not until recently, however, have we really measured the impact that crypto mining has had on the world of semiconductor manufacturing.
Obviously, we’ve seen cryptocurrency mining introduce us to Application Specific Integrated Circuit devices, or ASICs, which are specialized chips designed exclusively for bitcoin mining. ASICs and other mining rigs can cost between $3,000 and $10,000.
As reported by Chief Executive, the crypto industry’s influence on the semiconductor market has become so strong that Taiwan Semiconductor Manufacturing (TSMC) noted uncertainty over cryptocurrency mining as one of the reasons for its weaker than expected guidance for the rest of 2018.
In other words, one of the world’s leading semiconductor companies now depends on crypto mining-related revenue to a point where the crypto industry is noted in its quarterly financial reports.
ASICs represent approximately 4.5% of TSMC’s total annual revenue, generating about $900 million per quarter in 2017.
Samsung is another leading semiconductor manufacturer. In January 2018, the South Korean electronics giant announced that it had begun manufacturing ASIC chips for bitcoin and crypto mining.
“Samsung’s foundry business is currently engaged in the manufacturing of cryptocurrency mining chips,” explained a company spokesperson to TechCrunch. “However, we are unable to disclose further details regarding our customers.”
Right now, Samsung’s crypto mining division is minuscule compared to Samsung’s manufacturing of phone semiconductors. However, this may change over the coming years.
Intel is also expected to enter the crypto mining space by launching its own mining chips, although they announced a delay in the production of their 10mm units until 2019.
More Semiconductor Manufacturers Could Mean Lower Mining Prices
The fact that multiple electronic giants are getting involved in crypto mining is a big deal for everyone.
As companies like Intel and Samsung jump onboard, we might see significant reductions in the price of ASIC mining machines. This could lower the cost of mining for everyone while making crypto mining more accessible.
Today, it’s all but imperative that you buy a $2,000 to $3,000 ASIC miner if you want to profitably mine cryptocurrencies. And even with an Antminer S9 or similar machine, you may not generate a positive ROI for years – depending on electricity prices in your region.
As new companies join the industry, however, we may see this trend shift.
Of course, other analysts point to bitcoin’s extreme energy consumption as the thing that will ultimately cause it to collapse: as Ars Technica explained earlier this year, bitcoin mining could consume 7.7 gigawatts of electricity by the end of 2018, which works out to approximately 50% of the world’s energy consumption.
The only way to combat bitcoin’s rising electricity consumption is to create a more efficient chip. As more members of the world’s semiconductor industry jump on board, we expect to see a number of more efficient chips hit the market, potentially lowering the cost of ASICs and crypto mining worldwide.
A more efficient chip could change the future of the cryptocurrency industry. We can’t afford to keep consuming electricity at the present, growing rate. We need a chip that’s more efficient. And that’s exactly what the world’s semiconductor manufacturers are trying to develop.