According to a report from Reuters on Friday, the shortage of chips has severely affected the Bitcoin mining hardware distribution chain.
In fact, according to the information on the Bitmain website, by August 2021, one of the major Bitcoin miners, Bitmain, has sold out its inventory. In addition to insufficient inventory, Bitmain’s mining machine prices are now at a high premium.
For example, as early as November 2020, the price of Antminer S19 was US$1,897 per unit. As of the time of writing, the same miner’s price on his company’s website is $2,767, a 45% price increase.
Alex Ao, vice president of semiconductor manufacturer Innosilicon, said in an interview with Reuters: “There are not enough chips to support the production of mining machines.”
According to reports, only a small supply of mining machines were purchased by major mining companies in North America. As early as 2020, American mining giants Riot Blockchain, Bitfarms, and Marathon have substantially increased their inventories by purchasing large quantities of mining machines from Bitmain and rival MicroBT.
Capacity expansion even occurred when Bitcoin experienced a halving every four years (block reward subsidy halving). Therefore, although China still dominates the distribution of global computing power, it is reported that the interests of mining in North America are “squeezing the supply to China.”
Chinese miners have also suffered noticeable blows recently, including the card freeze in 2020, which caused some miners to be unable to pay for electricity. As previously reported by Cointelegraph, the relevant authorities in China’s Yunnan Province have also cut off electricity to miners in the area.
Smaller mining companies are also in danger of being eliminated by the market. The premium of hardware and the reduction of block rewards, even second-hand mining machines, will greatly affect their profits.
Other industries that rely on semiconductors are already beginning to feel the effects of continued shortages. Automakers such as Ford have announced the closure of some factories.
