Microchip Maker TSMC Predicts Lower Cryptocurrency Mining Demand
18-10-2018, 18:30 47
Copyright on text and image: CryptoGlobe.com
According to Reuters, TSMC forecasted “modest” growth for the fourth quarter, despite the lower demand from the crypto sector. This as it expects solid sales of high-end chips to high-end smartphone manufacturers, which include Apple.
Speaking to the publication TSMC’s Chief Financial Officer (CFO) Lora Ho noted the market is currently facing “uncertainties,” presumably referring to concerns surrounding a potential Sino-US trade war, but added the firm will benefit from continued demand for its 7-nanometre chip for smartphones.
However this will be partially offset by continued weakness in cryptocurrency mining demand and inventory management by customers.
Per Reuters, TSMC forecasted a fourth-quarter revenue between $9.35 billion and $9.45 billion, above last year’s $9.21 billion. It warned the mid-tier smartphone market is set to shrink, although it’s largely going to be unaffected by the change as it serves the high-end smartphone market.
The company’s July-September profit was of $2.9 billion, in line with what was forecasted. Notably, as CryptoGlobe covered, the company saw cryptocurrency mining lead its sales back in April, and expected continued “strong demand” from the sector at the time.
Per TSMC’s Chief Compliance Officer and President C.C. Wei, the company’s growth then was “mainly driven by strong demand from high performance computing such as cryptocurrency mining.” The cryptocurrency sector, however, reportedly just helped carry the firm through a seasonal decline in phone sales.
Demand from the cryptocurrency mining sector has likely been decreasing because of the crypto ecosystem’s months-long bearish trend that saw most cryptocurrency plunge this year, while their hashrates kept on rising.
This saw most miners start operating on rather thin margins, according to research conducted by blockchain firm Diar. As covered, mining cryptocurrencies while paying for energy at retail rates, its report found, is no longer profitable.
Traders have argued, however, that bitcoin’s high mining costs were what helped it bottom out earlier this year at the $6,000 mark. The traders noted at the time that if BTC manages to surpass the $6,840 mark it may be in for a recovery.