Blockchain-Driven Boom Helps Lift Taiwan’s Semiconductor Sector

Computing power-hungry technologies such as artificial intelligence (AI), autonomous driving, Big Data, Internet of Things (IoT), and cryptocurrency mining are spurring demand in Taiwan’s semiconductor industry, TechNode reports.

Data from Taiwan’s finance ministry showed that export jumped to a record $30 billion in March alone, which represents an increase of 16.7%. This growth was “driven by strong demand for high-performance chips, cryptocurrency mining, and artificial intelligence applications.”

Randy Abrams, who heads regional semiconductors research at Credit Suisse, commented:

“TSMC (Taiwan Semiconductor Manufacturing Company) is generating about 6-7% of its sales from the ASICs (Application Specific Integrated Circuits) from customers like Bitmain and also some of the GPUs being used from AMD and NVIDIA.”

TSMC is the biggest chip foundry in the world, with a more than 55% share of global chip production. The boom in the crypto mining space has been a massive driver of profits for the company: it reported $8.46 billion in first-quarter earnings this year "mainly driven by strong demand from high-performance computing such as cryptocurrency mining and increases from both automotive and IoT.” It added that the high demand from crypto mining had offset weaker smartphone sales.

However, TSMC issued a revised revenue forecast for the rest of 2018, citing uncertainty in digital mining demand. The company modified its forecast from growth of between 10% and 15% to a more conservative 10%.

Abrams continued:

“TSMC does not want to invest in much capacity that is unable to be converted to other uses. The market still needs to mature and have more certainty before more suppliers dedicate or invest in specific capacity for mining.”

Crypto mining pushes GPU prices up

An independent analysis by Gamespot has shown that GPU prices have risen along with the growth of crypto mining. The cost has more than doubled, going from $500 to over $1,000 per chip.

An Nvidia GeForce GTX, 1080 Ti with an MSRP (manufacturer suggested retail price) of $700 currently retails for $1,350, while AMD's Radeon RX Vega 64 sells for $1,500, three times its MSRP of $500.