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Home Latest News Bitcoin In the midst of growing demand, Bitcoin miners face chip shortages

In the midst of growing demand, Bitcoin miners face chip shortages

As the global semiconductor shortage worsens, Bitcoin miners are struggling to build more mining rigs.

According to Reuters on Friday, a chip shortage is seriously impacting the Bitcoin mining hardware distribution chain.

Indeed, according to information on its website, Bitmain, one of the largest Bitcoin mining suppliers, had its inventory sold out before August 2021. Bitmain’s mining rigs are now at a huge price premium, apart from being out of stock.

For example, the Antminer S19 shipped for $1.897 per unit back in November 2020. The same miner is valued at $2,767 on the company’s website as of the time of publication, a 45 percent markup.

Alex Ao, vice president of semiconductor manufacturer Innosilicon, told Reuters, “There are not enough chips to support the production of mining rigs.”

Large mining establishments in North America are reportedly scooping up what little supply is available. Back in 2020, with large purchases from Bitmain and competitor MicroBT, United States-based mining giants like Riot Blockchain, Bitfarms and Marathon dramatically upgraded their inventory.

And when Bitcoin went through its quadrennial halving that saw block incentive subsidies cut in half, these capacity expansions happened. Thus, although the global hash rate distribution is still dominated by China, North American mining interests are allegedly “squeezing supply to China.”

Chinese miners have also experienced major late interruptions, including a frozen-card tide back in 2020 that stopped some operations from paying for electricity. As Cointelegraph has previously stated, the authorities in Yunnan province in China have also shut down the supply of power to miners in the region.

There is also a chance of smaller mining operations being priced out of the market. On top of the decreased block incentives, premiums on hardware, even for second-hand rigs, could dramatically affect their bottom lines.

According to Reuters on Friday, a chip shortage is seriously impacting the Bitcoin mining hardware distribution chain.

Indeed, according to information on its website, Bitmain, one of the largest Bitcoin mining suppliers, had its inventory sold out before August 2021. Bitmain’s mining rigs are now at a huge price premium, apart from being out of stock.

For example, the Antminer S19 shipped for $1.897 per unit back in November 2020. The same miner is valued at $2,767 on the company’s website as of the time of publication, a 45 percent markup.

Alex Ao, vice president of semiconductor manufacturer Innosilicon, told Reuters, “There are not enough chips to support the production of mining rigs.”

Large mining establishments in North America are reportedly scooping up what little supply is available. Back in 2020, with large purchases from Bitmain and competitor MicroBT, United States-based mining giants like Riot Blockchain, Bitfarms and Marathon dramatically upgraded their inventory.

According to Cointelegraph.com, these capacity increases happened even as Bitcoin went through its quadrennial halving that saw block incentive subsidies slashed by half. Thus, while China still controls the distribution of global hash rates, North American mining interests are said to be “squeezing supply to China.”

Chinese miners have also experienced major late interruptions, including a frozen-card tide back in 2020 that stopped some operations from paying for electricity. As Cointelegraph has previously stated, the authorities in Yunnan province in China have also shut down the supply of power to miners in the region.

There is also a chance of smaller mining operations being priced out of the market. On top of the decreased block incentives, premiums on hardware, even for second-hand rigs, could dramatically affect their bottom lines.

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