Bitcoin continues downward spiral, ASIC makers asked to delay shipments

Cryptocurrency was all the rage a year ago, with countless youngsters jumping into the shark-infested waters in hopes of achieving obscene returns. Pricing of Bitcoin peaked around the $20,000 mark last year and quickly fell to the $6,000 range, with all of the altcoins following suit. There were some brief recoveries, but the last couple of months BTC pricing kept hovering around the $6,000 handle.

It appears the next leg down has started this week. Amidst the chaos of a new hard fork of Bitcoin Cash, the price of a Bitcoin took a sharp dive down. At press time, BTC is trading at $4,390, a fresh 13-month low.

DigiTimes reports the weak cryptocurrency market is expected to undermine the performance of various chipmakers in the first half of 2019. The site heard Taiwanese IC designers capable of providing cryptocurrency mining ASICs have been asked by clients to delay shipments. Larger players in the crypto market contracted Taiwanese chip makers to design 7nm ASICs to save power consumption and achieve better mining performance. But with the continued price pressure, they're reluctant to buy. DigiTimes also writes that mining ASIC foundry orders at TSMC is now close to zero. At the start of the year, crypto was still one of TSMC's big growth drivers.

Among the designers, RDC Semiconductor has suspended development of ASIC solutions for mining customers; MediaTelk is not expected to enforce its 7nm mining ASIC plan until the first half of 2019; and other peer chipmakers Global Unichip, Alchip and Faraday do not have clear delivery schedules for such customers, the sources said. Even TSMC has directly scaled down mining ASIC foundry orders to near zero, according to industry sources.

The sources stressed that even though Bitcoin price has fallen under the US$5,000, mining customers can still manage to sustain profitable operations but it will take much longer time for them to recoup the development costs for chips and mining machines. But chipmakers are expected to keep developing new ASIC solutions for other blockchain-based applications than digital tokens.