The nosedive in the price of bitcoin has not only affected investors. Mining chips manufacturers are also struggling to stay afloat. Taiwan Semiconductor Manufacturing Co. (TSMC), which is also the world’s largest mining chipmaker, released a new report nullifying the earlier prediction of its growth rate. The recently released growth rate is standing at about 0.5% lesser than the original prediction of at least 7%.
TSMC Had a Below Expectation Growth Rate
TSMC initially hoped to hit a target growth rate of 7% – 9% in the first four months of the year, a target which has since proved to be unachievable.
The report has also noted that the decrease in demands for Bitcoin miners and other factors are responsible for its recent prediction of a 6.5% growth rate. TSMC has also noted that, the entrance of Samsung into crypto mining chip production is another factor which has affected its growth rate.
The Vice Chairman and Chief Executive Officer of TSMC, C. C. Wei told investors during the company’s third quarter 2018 earning conference that:
“TSMC is expecting to experience a reduced growth because of the continued weakness in cryptocurrency mining demand.”
Reduction in mining profit has been held accountable for the reduction in demand from Bitcoin miners which is most likely because only a few miners are still continuing in the industry and new miners are not coming on board as much as before.
Reduction in Demand for Mining Chips
TSMC has been affected by the general reduction in crypto mining chip demands, since 10% of its turn over comes from crypto mining demand alone. This has resulted in the company reducing its total turn over for 2018 from 10-25% to about 10%.
As a major supplier of iPhone core processor chips to Apple, the company did not only reduce its expectations regarding Bitcoin mining chips but it also reduced its sales target due to the reducing demand for iPhones.
Due to the aforementioned reasons, the company’s share price reduced with about 7% at the end of the 2nd quarter of 2018.