2018-8-28 13:49 |
Bitmain, one of the world’s largest crypto miners, could be facing tough challenges ahead. Aside from the low crypto prices affecting the profitability of its mining operations, even its mining chip manufacturing business seems to be losing its competitive edge.
Bitmain Losing Its TouchBitmain is known as one of the largest crypto mining firms in the world, as well as the top manufacturer of application-specific integrated circuit chips used in crypto mining rigs. However, a Bloomberg report says that the Beijing-based company’s dominance in the chip manufacturing segment is now seriously challenged by competitors, according to investment firm Sanford C. Bernstein & Co.
Bernstein analysts wrote in a report:
“The competitiveness of Bitmain’s chips is in question.”
The report noted that Bitmain used to be the dominant player of the cryptocurrency mining chip segment in 2017. Last year, the firm was the unquestionable market leader and cornered as much as 85 percent of the market. But Bitmain was not able to maintain its market share this year because of increasing competition.
Competition Affecting Company FinancesBitmain’s eroding market share is due to increasing competition from other mining chip manufacturers. These include Canaan and Ebang International Holdings, which are reported to be already planning their Hong Kong IPOs, according to the South China Morning Post.
There are speculations that the increasing competition might have negatively affected Bitmain’s finances because the majority of the company’s profits come from selling mining equipment, according to TNW. Bernstein analysts suggested in their report that Taiwan Semiconductor Manufacturing Co. (TSMC) should demand full prepayments on Bitmain’s orders. TSMC is one of the world’s largest independent semiconductor manufacturers and produces the chips designed by Bitmain.
These recent revelations are undoubtedly bad news for Bitmain, which is said to be planning an IPO to raise as much as $3 billion. Also, Bitmain has acquired a significant amount of Bitcoin Cash, which could further affect the company’s valuation as Bitcoin Cash has declined by around 68 percent since May.
Top Crypto Miner Bitmain’s Chip Business Facing Fierce Competition was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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