The mainland mining chip market is heating up, with TSMC emerging as the biggest beneficiary. According to Mizuho Asia's stock team, China’s application-specific integrated circuit (ASIC) chip industry is growing rapidly alongside the development of AI technology, reflecting a rising demand for "mining" in the mainland. This trend is beneficial for TSMC and ASE, particularly in foundry, packaging, and testing sectors.
Mizuho noted that TSMC’s third-quarter financial report last year highlighted sales of $300–400 million from virtual currency and AI-related products. The growth in this sector appears to have accelerated in the fourth quarter. For example, Bitcoin mining requires an estimated 18–20 million ASIC chips per month on average, which could provide long-term benefits for TSMC.
Mizuho also estimates that virtual currency could account for about 2% of Sun Moonlight’s revenue in the first half of this year. If demand remains strong in the second half, it may further boost capital expenditures.
According to an IC-wise survey, Bitmain generated $2.2 billion in revenue last year and has become the second-largest IC manufacturer in China, driving significant demand for ASIC chips. Currently, the top three global digital currency mining machine manufacturers are all based in China: Bitmain, Avalon by Jianan Zhizhi, and Yibang Technology’s machines.
Recently, Jianan Zhizhi, the second-largest Bitcoin mining company, applied for listing on the New Third Board. As of April 2017, the company had sold approximately 160,000 Avalon series mining machines, accounting for 22% of the global Bitcoin computing market. In 2015, its net profit was just 2.24 million yuan, but by 2017, it surged to 300 million, representing a 125-fold increase in two years.
In terms of revenue, Jianan Zhizhi reported 55.31 million yuan in 2015, with 58.12 million yuan paid to TSMC, surpassing its total revenue. In 2016, revenue reached 316 million yuan, with 186 million paid to TSMC, or 58% of total revenue. It is estimated that in 2017, the company will pay around 500 million yuan to TSMC.
ASE, a packaging and testing supplier for Jianan Zhizhi, saw its orders jump from 3.66 million yuan in 2015 to over 16.72 million yuan in 2016, making it another beneficiary of the rising demand for mining chips.
Bit China has now surpassed Huawei Haisi as TSMC’s largest customer, signaling how deeply embedded the blockchain and mining industries have become in the semiconductor supply chain.
In addition, several companies listed on the New Three Board are exploring blockchain applications. With the recent surge in blockchain interest, related concept stocks have gained attention from investors. However, some analysts argue that the blockchain industry is still in its early stages and not yet mature.
Blockchain technology, known as distributed ledger technology, is decentralized and transparent, and serves as the underlying platform for Bitcoin. Several New Three Board companies are now involved in blockchain technologies, including Taiyiyun, Jinqiu, Huazheng, Anbotong, Caimao, and Yihang. Others like Aobo Information, Capital Online, Yunhong Information, and others are also investing in blockchain research and development.
Notably, Caimao Network was acquired by Zhang Shousong, who plans to integrate resources into blockchain and AI fields. Similarly, Taiyiyun, formerly known as Saiyi Intelligent, rebranded to Taiyi Cloud and now generates over 55% of its revenue from blockchain-related activities.
Jianan Zhizhi, the world’s second-largest Bitcoin mining company, has officially applied for listing on the New Three Board. Its main business involves the R&D, design, and sale of ASIC chips and related equipment. As of April 2017, the company had sold 160,000 Avalon mining machines, capturing 22% of the global Bitcoin mining market.
Jianan Zhizhi’s rapid growth has been remarkable—its net profit rose from 2.45 million yuan in 2015 to over 300 million yuan in 2017. Despite its success, the company had previously attempted to go public on the A-share market through a failed acquisition by Lu Yitong in 2016.
Overall, the blockchain and mining chip industries continue to drive significant opportunities for semiconductor manufacturers and related suppliers, with many companies seeking to capitalize on the growing demand.
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