Chipmaker TSMC Records Substantial Fall in Crypto Mining Revenue in Q4, 2018

By Prashant Jha

According to the fourth quarter (2018) report from major chip manufacturing player TSMC, there has been a significant decrease in the amount of revenue earned via crypto mining over the studied period. TSMC or the Taiwan Semiconductor Manufacturing Company published its Q4 report for the past year on 17th January, 2019, revealing the fall and more.

The earning call transcript has not been accompanied by direct data from TSMC’s crypto mining business. Instead the transcript has been published under the HPC section, which deals with high performance computing. As C.C.Wei, the CEO and Vice Chairman of the company noted in this section, the HPC segment had registered a slight increase, if crypto is not included in the consideration.

His observation goes:

“Cryptocurrency is a big drop from 2018 to 2019. So if we put the cryptocurrency together in the HPC, it’s a big drop. It’s almost a double-digit.”

Although Wei did not want to reveal much more, he admitted that cryptocurrencies had formed a big part of TSMC’s sale the year before. He said that the company was not ready to divulge much of the details, saying:

“…cannot specify too much of the segment, particularly it belongs to one of the big customers”

We know that TSMC is known to be one of the largest suppliers of ASIC (application specific integrated circuit) chip to Bitmain, a major player in the crypto mining business, from China. In the crypto winter that has gripped the market for a very a long time, Bitmain has understandably suffered increasing levels of pressure in terms of falling revenues and declining customer base.

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Wei said the following about the company’s future in 2019:

“Okay. This year, we don’t forecast — we become conservative in forecasting this volatile business. So the cryptocurrency mining this year is much, much less than last year. And to what percentage, I don’t think it’s — I can release it right now.”

Overall, however, TSMC managed a business of $9.4 billion in the fourth quarter of 2018, registering a 10.7% rise from the third quarter and year-over-year rise of 2%. Therefore, although crypto mining industry has been suffering, especially with Bitmain struggling and Giga Watt declaring bankruptcy, TSMC has been successful in holding on to remaining areas of revenue generation to earn hefty profits

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