Taiwan’s TSMC Chip Manufacturer Reports Significant Losses in Revenue from Crypto Mining Business

Taiwan Semiconductor Manufacturing (TSMC) has reported some bad news yesterday, January 17. According to the company, the end of 2018 made the company see a sizeable decrease in the revenue related to crypto mining. The reports were originally published in the Q4 2018 financial results of the company.

TSMC has decided not to disclose any specific data about the crypto mining part of the company, however, but it was affirmed in the document that cryptos are suffering a big drop from 2018 to 2019 and that they are losing most of their value. The drop in cryptos together with HPC (high-performance computing), almost gets double digits, so the drop was big.

Cryptos have contributed a lot to chip sales of the company in 2018, as affirmed by the CEO and vice chairman of the company, C. C. Wei. However, as the data was sensitive to one of the biggest customers of the company, not a lot of information was actually shared.

The “big customer” is probably Bitmain. Nearly 60% of its total supply of chips came from TSMC. Because of this, the company was not eager to show so much information.

When including mining, the HPC segment actually had a slight grow, though. The major drop came in the last quarter of 2018 when the crypto prices went down too much. The sudden drop in demand for mining rigs affected the whole industry in a bad, unfortunately.

At the moment, Wei has affirmed that the company is still not sure about the prospects for 2019 as the sector is very volatile and an increase in price would certainly heat the market once again.

TSMC has affirmed that its revenue grew 10.7% in the last quarter, despite all the crypto issues. According to the Chief Financial Officer Lora Ho, the fourth quarter had a huge benefit from the 7nm technology that the company used for both computers and mobile.

However, for this new quarter, the company expects the revenue to drop a bit due to the overall weakening of the “macroeconomic outlook” and also two other important seasonal factors: a lot of people have bought mobile phones for Christmas and there are high levels of inventory.