The world of cryptocurrency could not exist without at least one cold war happening at its preset. This time the controversial news is coming from Taiwan. Bitmain is the world’s leading miner maker company based in China. According to the rumours and allegations, Bitmain has been poaching Taiwanese engineers illegally for years.
The first and most important contributing factor is the ongoing US-China economic tussle over semi-conductors. It should be noted that Bitcoin miner makers and miner rigs require semi-conductor chips for becoming operational. Due to the recent eruption of Bitcoin popularity, mining chips have reportedly gone short in the market.
Beijing has set the goal of becoming the global AI leader by the year 2030. To realize this dream presence of state-of-the-art semi-conductor chips technology is crucial. The current drain of semi-conductors is caused by the hoarding of US-based mining giants like Riot Blockchain and Bitfarm.
The Understanding between Washington and Taipei on Semi-conductors
Currently, Taiwan has the second-largest chip industry in the world after the USA. A Taiwanese prosecutors’ team has launched seven probes to investigate China’s fake recruitment companies set up in Taiwan. According to the Taiwanese Prosecutors’ allegation, they have produced evidence showing Bitmain luring a senior Taiwanese engineer to work in China as chairman of a new company and recruit more talent through him.
By the decree of act governing relations between Taiwan and the Mainland area, Chinese investors are prohibited from investing in the Taiwan chip design sector due to national security matters. Chinese organizations also cannot set-up subsidiaries inside Taiwanese democratic territory. Two chip design companies IC Link Limited and WiseCore, are under investigation by the Taiwanese prosecutor office for these legal violations.
Bad News for Bitcoin Miner Maker Startups
As of now, China has been dependent on Taiwan Semiconductor Manufacturing Company (TSMC) to further its agenda of moving forward in the AI chip sector. However, the poaching allegations can negatively impact the Bitmain business contracts with TSMC. On the other hand, U.S Taiwan relations seem to be strengthening as TSMC and Apple Corporation are taking on new projects.
In the aftermath of this ongoing semi-conductor famine, the cost of Antminer has risen from $19 to $2,767 per unit. The semi-conductor issue has also shown effects in other industries. Ford has already announced closing down its plants for some time. The scooping of semi-conductors by US-Mining giants has resulted in capacity expansion and a halving of block rewards for Bitcoin. Smaller mining operations are threatened with the possibility of going out of business due to unaffordable premiums on hardware.