Demand For Bitcoin Mining Chips Reportedly Declining as Taiwan’s Chipmaker Slashes Growth Target

Demand For Bitcoin Mining Chips Reportedly Declining as Taiwan's Chipmaker Slashes Growth Target

The world’s largest chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) has cut its growth target to 6.5% following a reducing demand for chips by Bitcoin miners. The company had earlier predicted a growth rate range of 7%-9% in the fourth quarter of the year, an expectation which seems to be unattainable.

Although reducing demand from Bitcoin miners was stated as the major reason for the pessimism concerning growth, other factors such as the invasion of the global crypto mining sector by Samsung has also been named as one of the reasons why demand has fallen.

Samsung is expected to be a formidable competitor to TSMC as it announced the commencement cryptocurrency mining equipment production early this year, including GPU miners for small crypto miners in the coming months.

The Chief Executive Officer and Vice Chairman of TSMC C. C. Wei during the company’s third quarter 2018 earning conference informed investors that the company expects reduced growth due to  “continued weakness in cryptocurrency mining demand”.

“Moving into fourth quarter, despite the current market uncertainties, our business will benefit from the continuous steep ramp of 7-nanometer for several high-end smartphones as well as the demand for 16/12-nanometer for the launches of new-generation GPU and AI. However, this growth will be partially offset by continued weakness in cryptocurrency mining demand and inventory management by our customers.”

The reduction in mining profit has also been blamed for the reduced demand from Bitcoin Miners probably because fewer miners still continue in the industry with no new ones coming in due to high cost of equipment and reducing profitability.

The general reduction in crypto mining demand has affected TSMC drastically since 10% of its revenue comes from crypto mining demand alone. This forced the company to reduce its overall  2018 revenue guidance from 10-15% to just 10%.

The company has not only slashed its expectations concerning Bitcoin mining chips. Being a major supplier of iPhone core processor chips to Apple, the company has also slashed its sales target with reducing demand for iPhones.

As a result, the company shares fell by about 7% at the end of the second quarter of 2018 “due to weak-than-expected earnings forecast, making it a victim for the muted iPhone demand.”

Does the declining demand from cryptocurrency miners mean miners are losing interest? If yes, what would be the future of Bitcoin and other mined cryptocurrencies if the trend continues?

The post Demand For Bitcoin Mining Chips Reportedly Declining as Taiwan’s Chipmaker Slashes Growth Target appeared first on ZyCrypto.

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