Bitcoin miners face chip shortages as demand surges

As the global semiconductor shortage worsens, Bitcoin miners are scrambling to buy more mining machines.

Chip shortages have severely impacted the bitcoin mining hardware distribution chain, Reuters reported on Friday .

In fact, according to information on Bitmain’s website, Bitmain, one of the major Bitcoin miners, has sold out its inventory by August 2021. In addition to the lack of inventory, the price of Bitmain’s mining machines is now at a high premium.

For example, back in November 2020, the Antminer S19 was selling for $1,897 per unit. As of this writing, the same miner is listed at $2,767 on its company website, a 45% price increase.

“There are not enough chips to support the production of mining machines,” Alex Ao, vice president of semiconductor maker Innosilicon, told Reuters in an interview.

The limited supply of mining machines has reportedly been purchased by major mining companies in North America. As early as 2020, American mining giants such as Riot Blockchain, Bitfarms and Marathon significantly increased their inventory by purchasing large quantities of mining machines from Bitmain and competitor MicroBT.

The capacity expansion is occurring even as Bitcoin undergoes its quadrennial halving, which cuts the block reward subsidy in half. So while China still dominates the distribution of global hashrate, North American mining interests are reportedly “squeezing out supply to China.”

Chinese miners have also suffered notable blows recently, including the 2020 card freeze wave, which left some miners unable to pay their electricity bills. As Cointelegraph previously reported, authorities in China’s Yunnan province also cut off electricity to miners in the region.

Smaller mining companies are also facing the risk of being eliminated from the market. The premium on hardware, coupled with the reduction in block rewards, will greatly affect their profits, even for second-hand mining machines.

Other industries that rely on semiconductors have begun to feel the impact of the ongoing shortage. Automakers such as Ford have already announced the closure of some factories. (Cointelegraph)