China launched an all-out crackdown on cryptocurrency not very long ago, casting doubt on its future and sending bitcoin value down by a huge margin. But the Chinese chip makers have been busier than ever making bitcoin mining chips, and challenging no less than the industry-leading giants Nvidia and AMD. And they have made their presence felt.
Both Nvidia and AMD, two of the leading chip makers for high end computing and processing, saw a fall in their share value due to competition from the Chinese bitcoin mining chip maker Bitmain. As reported by CNBC, “Susquehanna (A leading Wall Street research firm) reduced its rating to negative from neutral and lowered its price target for AMD shares, citing impending competition from cryptocurrency mining company Bitmain.” And the same article reports that new ASICs (Application Specific Integrated Circuit) for Etherium too are being developed by Chinese companies. Christopher Rolland, Senior analyst at Susquehanna, believes that Bitmain’s Etherium mining chip will hurt both Nvidia and AMD. “As a result the analyst lowered his price target for AMD shares to $7.50 from $13, representing 29 percent downside from Friday’s close”, a CNBC report mentions.
Since the arrival of bitcoin mining, high-end chips had a huge demand from the miners. So much so, that some suppliers could not supply them to fulfill the demand. Nvidia and AMD, being the leading gaming chip manufacturers, saw their sales go up by large margins until the Chinese started making cheaper, faster ones. According to CCN, “As the leaders in what is effectively a GPU manufacturing duopoly, Nvidia and AMD each benefited greatly from last year’s cryptocurrency price boom, which had a correlative effect on mining. In fact, many investors treated these two companies as “proxy stocks” for the cryptocurrency industry.”
Bitmain’s Antminer rig series stands as the undisputed champion of bitcoin mining, and their reputation, together with the quality and efficiency of their rigs, will definitely affect market trends every time they launch a new machine. Currently the Antminer S9-14TH/s is marketed as “the world’s most efficient bitcoin mining chip in the consumer market” that delivers “more hashrate and efficiency than any bitcoin miner ever made. And the market behaviour does surely vouch for that.