Major Bitcoin mining chip and equipment manufacturer based in Beijing, Bitmain, revealed that it will be using 5nm chips in the newest generation of mining rigs, instead of 7nm, 8nm or 12nm larger chip sizes. The announcement has elicited some criticism from Bitcoin miners who are concerned about a decrease in mining capacity and efficiency with a smaller chip, despite previously-ousted Bitmain co-founder Micree Zhan assuring Bitmain customers of the quality of the smaller chip ever to be used in Bitcoin mining machines.
The news comes from Colin Wu, a well-known Chinese crypto and blockchain reporter, based on an article published on the WeChat app. So why the sudden decision to use 5nm chips? The rumour is that there is a sharp decline in the production capacity of mining equipment this year and a source said that from now until the end of the year, the factory can “rest”, which means there is no production.
There is supposedly an issue with providing sufficient supply to meet demand, and the supply is typically controlled by two manufacturers, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. Bitmain gets its chip supply from TSMC and with remaining co-founder Jihan Wu helming operations, it has managed to rebuild its supply chain to fulfil previous orders despite manufacturing issues.
Those who get their supply from Samsung, however, are not so lucky with businesses such as Ebang and Whatsminer now facing temporary shortages. Colin Wu also says that the overall computing chip supply has been redirected to smartphones or servers due to the pandemic as demand for “audio, video and Internet” surged in this period, leaving less for Bitcoin mining rigs.
The feud between Bitmain founders Zhan and Wu persists following Zhan reclaiming control in Bitmain after he was ousted late last year. Zhan says that Wu is 5nm chips he knows are problematic because he is unable to obtain 7nm and 16nm chips, further adding that “Micree is now close to bankrupt, so he cheated the customers and sold problematic mining machines in order to withdraw funds”.
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