As of recent developments, Taiwan Semiconductor Manufacturing Company (TSMC)’s earnings could prove another significant hindrance to Bitcoin mining. The firm is reportedly hiking its chips price jump. The construction costs of buildings and infrastructure, which may be 4 to 5 times more for U.S. fabricators than for their peers in Taiwan, are the leading cause of the cost disparity between Taiwan and the U.S. according to the firm.
More information on how much and why chips would cost *far more* now that “globalization is dead” was provided during TSMC’s earnings call last week.
1/ TSMC's earnings call last week revealed more details on how much and why chips will cost *much more* now that "globalization is dead"https://t.co/TEfrLh0mtB
Thread🧵of salient parts w/ transcript screenshots from @KoyfinCharts + my own takes in bracket 👇
— Kevin Xu (interconnected.blog) (@kevinsxu) January 14, 2023
The high cost of the building comprises labor, permits, occupational safety, health laws, recent inflationary expenses, personnel, and learning curve costs.
The firm added.
“We cannot comment on specific price issues; however, we can assure you that our total pricing will continue to represent our value, which includes the deal of our regional flexibility.”
TSMC put up their pricing strategy to represent all the values they share with customers since, when they look at their customers’ success, they have been increasing structural gross margin over the last 5 to 6 years.
The semiconductor industry in the US and Japan is entirely new in terms of geopolitics. Therefore, TSMC claims to be making great efforts to find ways to lower costs by strengthening the semiconductor supply ecosystem in the U.S. and Japan.
First pinch: Bitmain verifies the rise in TSMC chip prices
One of the largest bitcoin mining equipment manufacturers, Bitmain, located in China, revealed a 20% price increase in chips it purchases from TSMC in a social media post .
In a WeChat post on Thursday, Bitmain claimed that TSMC had told all of its clients, including the manufacturer of mining rigs, that it would be raising the cost of its goods created using semiconductor manufacturing by 20%.
For its flagship Antminer S19 series, sent to important cryptocurrency mining businesses like Poolin, Bitmain mainly obtains wafers from TSMC.
“Even with the price hike, Bitmain promised to “steadily enhance Antminer machine manufacturing capacity as its supply chain team strives to ensure product quality.”
It is yet unknown whether the price rise would harm TSMC’s relationship with Bitmain and whether it will be passed on to customers purchasing the rigs. “Mining is always a balancing act between the expense of running and the possible return of Bitcoin,” Justin d’Anethan, head of worldwide exchange sales at Eqonex, told Forcast.News.
It wouldn’t be strange if we saw an influence on miners and, as a result, in hash rate, with a possibly delayed effect, as chip shortages are a common topic of discussion in all things technological.