The Taiwan Semiconductor Manufacturing Company (TSMC) has released details of its Q1 earnings this year, with the demand for ASIC chips growing over the period.
Application-specific integrated circuit (ASIC) chips are a necessary element to efficiently mine Bitcoin. Bitmain is one of the biggest names in Bitcoin mining hardware and they purchase their chips from TSMC.
A growing number of ASIC chips sold to companies like Bitmain has resulted in an extremely profitable first quarter for TSMC; it made approximately USD 4.2 billion in profit, with an increase in revenue at 6.1% over the previous quarter.
Speculation behind the Q1 results points to the release of the Bitmain Antminer E3, the first Ethereum miner utilizing ASIC chips. Due to be released this July, the hardware is advertised as mining Ethereum more efficiently than a standard GPU setup, at a reduced cost.
Profit levels for TSMC could be threatened, however, as Vitalik Buterin has discussed moving Ethereum to a full proof-of-stake model that would prevent the currency from being mined at all. Buterin has also discussed introducing a hard cap for Ethereum of 120 million, which would decrease the demand for mining in the long-term.
The direction Buterin takes Ethereum will indeed have a huge impact on TSMC’s profits, as Bitcoin mining has become less profitable due to the value depreciation, while alternative currencies that can be mined do not carry nearly as much value.
The whole of 2017 saw TSMC’s profits stand at just USD 114.8 million, due to USD 367 million in expenses recorded. This still put the company at a 2.8% increase over 2016.
The final quarter of 2017 saw the biggest increase in performance from TSMC, with the company recording USD 4.7 billion income. This is notably the period when Bitcoin had its highest recorded value at just under USD 20,000 per Bitcoin.
The profitability of Bitcoin mining is also influenced by how many miners are currently in the network, with more miners meaning the less profitable it becomes. Even if the value of Bitcoin begins to increase substantially, this does not necessarily mean it will become more cost-efficient to mine.
For now, however, evidence from TSMC points towards an increasing trend in the mining process.