Bitcoin miners facing chip shortage amid skyrocketing demand

A chip shortage is significantly affecting the Bitcoin mining hardware distribution chain, according to Reuters on Friday.

Indeed, Bitmain — one of the major Bitcoin miner makers — has seen its inventory sold out until August 2021, according to information on its website. Apart from being out of stock, Bitmain’s mining rigs are now at a massive price premium.

For instance, back in November 2020, the Antminer S19 shipped for $1,897 per unit. As of the time of writing, the same miner is priced at $2,767 on the company’s website — a 45% markup.

Speaking to Reuters, Alex Ao, vice president of semiconductor manufacturer Innosilicon, said, “There are not enough chips to support the production of mining rigs.”

What little supply is available is reportedly being scooped by major mining establishments in North America. Back in 2020, United States-based mining giants like Riot Blockchain, Bitfarms and Marathon significantly upscaled their inventory with massive purchases from Bitmain and rival MicroBT.

These capacity expansions occurred even as Bitcoin went through its quadrennial halving that saw block reward subsidies cut in half. Thus, while China still dominates the global hash rate distribution, North American mining interests are reportedly “squeezing supply to China.”

Chinese miners have also suffered notable disruptions of late including a frozen-card tide back in 2020 that prevented some operations from being able to pay for electricity. As previously reported by Cointelegraph, authorities in China’s Yunnan province also shut off the power supply to miners in the region.

Smaller mining operations are also in danger of being priced out of the market. Premiums on hardware, even for second-hand rigs, on top of the reduced block rewards could significantly impact their bottom lines.

Already, other industries dependent on semiconductors are beginning to feel the effects of the continued shortage. Car manufacturers such as Ford have announced shutdowns of some of their plants.