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"Uncertain" crypto mining demand sees lower revenue estimates of Chipmaking in Taiwan

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The uncertainty in the cryptocurrency mining market has led Taiwan Semiconductor, the leading maker of chips in the world, to lower its revenue forecast. year. Adding insult to injury, weak demand for Apple's iPhone, of which Taiwan Semi is the supplier, also weighs on this year's expected sales.

Meanwhile, Bitcoin Mining was the 2017 champion, helping to advance Taiwan's 2017 Semi results by 6%, including a 10.1% increase in the fourth quarter alone. Now, the volatility of the price of bitcoin, which has reduced the profits of miners, is wreaking havoc.

"For the full year of 2018, we expect the global semi-conductor market, out of memory, to grow by 5%, while the foundry [the] [market is] is expected to grow by about 8% .We anticipate that the TSMC business figure in 2018 will be about 10%, compared with 10% to 15% due to the weak of the smartphones and the uncertainty of the Encryption request, "said CC Wei, co-CEO of Taiwain Semi. on the call for first-quarter earnings on Thursday.

But Wei attributes Q1 's performance to "a strong demand for high – performance computing such as cryptocurrency extraction and increases in the auto and automobile industry. IoT ", feeling that could spill over into the current quarter. Nevertheless, in Q2, Taiwan Semi is experiencing "some weakness over 28 nanometers", while "the rest of the technology is still very strong on cryptocurrency," said Taiwan's Mark Liu Semi on the call for profits .

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According to the research firm Bernstein's analysis, the bulk of Taiwan's Cryptocurrency-mining demand comes from the Chinese company Bitmain. But with the price of bitcoin just emerging from the slump, mining, which is the process by which volunteers solve complex equations to create more coins and earn a reward, has become a proposition. less profitable.

Meanwhile, Taiwan Semi generates 10% of its revenue from chip sales related to cryptocurrency mining, according to Morgan Stanley quoted on CNBC. The Wall Street firm was quick to paint a dreadful picture in which bitcoin prices that persist at current levels would result in a "quick drop" in mining profits.

High demand in relation to uncertainty

But cryptocurrencies are rising, as evidenced by a stock market valuation that reaches $ 365 billion, as reported by CCN. And from elsewhere, Taiwan Semi may be nervous about Bitcoin price volatility, but its tone remains rather positive, with business executives referring to a "strong demand" on the one hand and "uncertainty" on the other hand.

For now, Taiwan Semi does not intend to "increase the capacity of cryptocurrency mining chips unless we find that the demand is sustainable" , according to Wei cited in Nikkei Asian Review. In the meantime, Taiwan Semi is targeting blockchain and artificial intelligence (AI) for growth.

Shares of Taiwan Semi lost more than 5% Thursday, but they are trading in the green of the pre-sales activity on Friday.

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