Bitcoin prices plummeted sequela: “hangover” hardware market

(source: panoramic vision)

The Economic Observer reporter Song Di At the end of 2017 climbed to the peak, showing a declining trend bitcoin prices in 2018, compared with the peak of nearly 2 million price, the current price of bitcoin is still hovering in the $4000 line, until the deadline (11 30), bitcoin prices rose slightly to warm, about $4300.

A substantial decline in the price of bitcoin, the digital currency market is shrinking so that some investors suffered heavy losses, a digital currency fund management said the fund has been a substantial loss to the economic observer, is currently waiting for the market to pick up.

In the investment market, digital currency bitcoin and the entire market to the broader market through the machine hardware nodes, such as AMD, NVIDIA, TSMC, chip manufacturers and processing plants are affected, in October this year, -11 months, a number of related enterprises shares are substantial fluctuation.

A digital currency bitcoin miners said in a rapid rise in the price of the period of the economic observer, are willing to invest more ore miners to mining; because of the power, high cost of hardware, miners will face a cost line, when prices fell below the cost line, the owner will reduce investment, and even selling machine the phenomenon of.

This also means that when the digital currency price downturn, its shipments will be affected, a number of areas which influence to the upstream hardware procurement, production, packaging and other semiconductor chip, even a short time a large number of second-hand hardware, so that the impact to the entire hardware market.

In November 15th, NVIDIA released the latest quarterly earnings, NVIDIA CEO Jen-hsun Huang said: “the duration of encryption currency boom ‘hangover effect’ is much longer than we expected, we also feel very surprised, but it will eventually be in the past.”

Its winter

Mine is an important node of digital currency mechanism, is the essence of a computing device, is devoted to the host machine package entitled digital currency block, at the completion of packing after digital currency system generated as a reward.

2016-2017 years, the entire digital currency bitcoin rose to its fiery, in bits, (one of the world’s largest bitcoin mining machine manufacturers) as an example, according to the prospectus disclosure, 2015, bit revenue of $137 million, 2017 quickly climbed to $2 billion 500 million, a CAGR of over 300%.

Enter the 2018, and other digital currency bitcoin prices began to fall, but because the machine as a hardware device, the production cycle and investment compared to digital currency price volatility is still has a certain lag — a data is, during 2018 years 1-10 months, bitcoin is the total investment still maintain a rapid this means that the investment growth, this market is still in the multi variable machine. Based on this, in the first half of 2018, bit, still achieved an increase of more than 900%, the first half of revenue has exceeded the year 2017, to $2 billion 740 million.

Change the node appeared in October, in mid October this year, bitcoin mining difficulty going down bitcoin mining difficulty and investment is proportional to the force, which means that the miners are reduced into this market. In 11 months, bitcoin prices experienced a substantial decline, fell below $4000.

The bitcoin miners on the economic observer said, if in accordance with the current price, the cost of electricity generated by mining revenue has not needed to cover basic mining — this is a mining accounted for the highest cost of consumption.

4 months of this year, Morgan Stanley stock analysts have also pointed out in a research report, even at very low electricity costs ($0.03 KWH) to calculate the breakeven point of large ore pool has reached $8600. This means that, as long as the bitcoin market price below $8600, the miners to dig bitcoin will lose money.

This also means that, at present already digital currency price for mine is red, in this case, whether the price of second-hand vehicle or vehicle sales are affected.

The owner of the Economic Observer reported that the recent period of time, the price of second-hand vehicle has dropped dramatically, even a sell-off in the.

The hardware is cold

Machine relates to a huge hardware market, from hot to cold mill has spread to some external market.

At present, the digital currency market, including the main machine, a kind of card machine, the use of such machine is the main square, ZEC Ethernet and other digital currency, such as ASIC chip machine, and is a bitcoin, Wright coins and other digital currency using this kind of machine. The former mainly relates to the manufacture and sale of hardware and graphics, and the latter is mainly related to the ASIC chip, including wafer foundry, chip packaging and testing etc..

A bit, for example, its prospectus information display, the two bit, is Chinese, the world’s top ten fabless chip design company, design, the main bit of ASIC chip, the processing is mainly used in the form of purchasing.

Provide foundry bits, TSMC, according to the prospectus information display, 2015, 2016, 2017 and 2018 in the first half of the year, the value of integrated circuit, bit since TSMC procurement accounted for 44.8%, 58.5%, 58.6% and 59.2% over the same period the total purchases.

For the TSMC, is undoubtedly a great business. “A year ago we still don’t know what bitcoin, now with us to buy a lot of wafer, TSMC said electric chairman Zhang Zhongmou in a media interview in early 2018. According to the information disclosure of the TSMC electric display, only a quarter of virtual currency mining demand for its revenue increased 3.5-5 billion dollars.

Bo Sheng Limited Hong Kong Company analyst Mark (Mark Li). Lee has said this: “new apple a relatively strong iPhone of TSMC added revenue contribution but also so close, but Apple should do a lot of product innovation and marketing, bitcoin can easily achieve the same effect.”

But after October 2018, TSMC’s stock price fell sharply, the decline in the overall capital market trends, but also by the capital smell some potential information, which includes both the effect of intelligent mobile phone market, including the effect of digital currency market. Maybank Kim Eng analyst Stefan Chang brokerage said in a October 8th report: “the market for TSMC’s near-term prospects are still too optimistic, and the company estimates may not include” factors using the old technology of the chip demand weak. “”.

At the same time, according to the relevant media reports, TSMC has lowered its growth in the fourth quarter, one of the reasons is the downward bitcoin chip demand reduction.

Another case is the NVIDIA 11, June 15, NVIDIA announced as of June 28 10 2019 a third quarter fiscal year. The third quarter results, NVIDIA Q3 revenue of $3 billion 180 million, an increase of 21%; net profit of $1 billion 230 million, an increase of 47%. This performance did not meet analysts for NVIDIA Q3 revenue expectations 32.4 billion dollars. In addition, NVIDIA over the next quarter revenue is expected to be $2 billion 700 million, analysts expected revenue of $3 billion 400 million. Quarterly disclosure, NVIDIA’s share prices fell sharply.

NVIDIA will be attributed to poor earnings performance crypto currency mining boom retreat.

NVIDIA CEO Jen-hsun Huang said: “money boom” encryption hangover effect “lasts longer than we expected, we also feel very surprised, but it will eventually be in the past.”

Jen-hsun Huang said that the overstock Pascal card will no longer be a large number of shipments, until the normal level of inventory. NVIDIA executives said that the end of the quarter the backlog of inventory can be cleaned effectively, but also admitted that this situation will continue into the quarter.

A China Securities Research Report also showed a rising trend in the 2018 years NVIDIA’s inventory turnover days.

The depth of influence

In a recent period of time, some of the securities seller researcher began to frequent contact with the semiconductor industry, hoping to find out the influence of digital currency market at low tide will bring to the market as a whole.

But this effect may be a short time is difficult to fully measure the card, for example, the Economic Observer learned from a graphics agent, some graphics of the second-hand market price decline trend, this trend is likely to affect the entire graphics market sales.

A semiconductor researcher on the economic observer said, compared to the graphics card and other hardware, the market price volatility for electronic components is more concern, some components in the hot mill when prices rose sharply, the price fluctuations will be more worthy of attention in the next period of time.

MLCC (multilayer ceramic capacitor) as an example, the components in the past more than a year’s time, the price of a substantial increase, this increase is considered and the supply chain, supply and demand and other factors, but its effects can not be ignored in a mainstream ASIC chip mill number MLCC application of capacitor reach thousands, and in the intelligent mobile phone in general, the number of components is only hundreds to one thousand. “Some of the hardware production which has a certain periodicity, conduction can also need a period of time of the ore demand has shrunk completely show”, the researchers said the economic observer.

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