The cryptocurrency industry started 2018 with the foot on the gas pedal: Bitcoin was worth nearly $20,000, and altcoins had a healthy growth rate as a consequence. However, several months and two massive collapses have passed, and now the world’s leading crypto asset is barely hanging onto $3,600, struggling to break the $4,000 barrier despite some recent attempts.

Naturally, people saw a lucrative business in Bitcoin mining 12 months ago. Now, with the recent downturn of the cryptocurreny markets, interest in mining equipment has decreased, and the numbers tell the entire story.

Tough Times

That is precisely the case of Taiwanese chip manufacturing company TSMC (Taiwan Semiconductor Manufacturing.) The company, one of the most successful in the Asian zone, has revealed that mining-related revenue reported a considerable drop.

The news were made public after the firm released its Q4 (fourth quarter) report on January 17th, 2019.  The specific information for the crypto-mining business was not revealed, because it was encompassed within the high performance computing (HPC) part.

C.C. Wei, the company’s CEO & Vice Chairman, stated that the firm experienced a slight growth in the HPC area, excluding crypto. “[C]ryptocurrency is a big drop from 2018 to 2019. Hence, if we put the cryptocurrency together in the HPC, it is a big drop. It is almost a double-digit,” he said.

The press pressured Wei into providing more details, but he did not have much more to say, except that whilst the cryptocurrency department had contributed a lot to the business’ sales in 2018, TSMC “cannot specify too much of the segment, particularly it belongs to one of the big customers.”

TSMC and its Relationship with Bitmain

TSMC has been a renowned source of ASIC (Application-Specific Integrated Circuit) chips to Chinese crypto mining giant Bitmain, and that is why its relationship with the crypto industry is a matter of global news. Bitmain has suffered the consequences of the bearish market like few other entities.

According to a Bernstein analysis, 2-3 percent of the firm’s revenue was associated with crypto-related sales in February 2018. However, and thanks to the market collapse and its recent volatility, Wei prefers to take a more cautious approach this time around.

“Okay. This year, we do not forecast — we become conservative in forecasting this volatile business. So the cryptocurrency mining this year is much, much less than last year. And to what percentage, I do not think it is — I can release it right now,” he observed.

The Raw Numbers

The semiconductor company’s total revenue in the fourth quarter of 2018 was $9.4 billion, which represents a 10.7 percent growth considering the Q3 results and a 2% year to year increase. However, according to the Chief Financial Officer, Lora Ho, the projected profit for 2019’s Q1 is $7.3-$7.4 billion, a 22 percent drop.

TSMC is not the only semiconductor company that has felt the rigors of the bear markets. Giga Watt, an American powerhouse in the field, recently announced the cease of its day to day operations and filed for bankruptcy in November, for example.

Bitmain seems to be experiencing a rough moment, having suspended its mining in Texas and closed its Israel-based development center, also dismissing some local staffers near the end of last year.

By Andres Chavez


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