Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Advanced Micro Devices Inc and other companies have seen more than US$200 million in sales last year for computing components used to create bitcoins, Wedbush Securities Inc said.
The virtual currency, which exists as software, is created by solving complex tasks embedded in the program through a process called mining.
Bitcoins currently trade for about US$875 each on the Mt.Gox exchange, up from about US$13 one year ago.
As their value surged, digital prospectors have rushed to create more of the digital money, boosting the market for high-powered machines, some of which cost more than US$20,000 a piece. TSMC, AMD and GlobalFoundries make many of the chips in these machines, according to Gil Luria, an analyst at Wedbush in Los Angeles.
“Due to the growth of the bitcoin network, mining machines now require powerful application-specific integrated circuits [ASIC] that are designed specifically to mine bitcoins,” Luria said in a report. “We believe the majority of these ASIC chips are fabricated at SMC and GlobalFoundries.”
The report also flagged some potential beneficiaries of the digital boom, such as EBay Inc’s PayPal unit and International Business Machines Corp.
PayPal could make bitcoin one of its payment options, along with credit cards, this year, and benefit from an influx of millions of new users, Luria said in an interview.
IBM could provide software and hardware powering bitcoin and other new digital currencies, he said.
As more consumers adopt bitcoin and other digital currencies for purchases and money transfers, that could adversely impact established financial companies such as Western Union Co, Luria said.
“It’s incredibly easy now to send money with bitcoin from one country to another,” Luria said in an interview.
“But now you need to know how to do it. I expect a flurry of money transmitters to emerge in the next one to three years, and they’ll be able to do this for everybody at a fraction of the cost of Western Union and others,” Luria added.
Jason Gorss, a spokesman for GlobalFoundries, said the manufacturer is working with several companies that design chips for bitcoin mining, such as Butterfly Labs Inc.
“We’re watching digital currencies like bitcoin closely,” Jennifer Hakes, a spokeswoman for PayPal, wrote in an e-mail.
“Many of our consumers prefer cash,” Andrew Silver, a spokesman for Western Union, wrote in an e-mail. “We will continue to track the use of virtual currency in the market, and expect that it should comply with the same regulations and oversight that the rest of the financial services industry must adhere to, to ensure that consumers are protected.”
Bitcoins are not controlled by any country or banking authority, so fees on using the currency to make purchases or transfer money can be much lower. Bitcoins are being used to pay for everything from Gummi bears to smartphones on the Internet.
Retailer Overstock.com Inc said recently it is to begin accepting Bitcoins starting in the middle of the year.
“We think there’s an underserved part of the market that wants to use bitcoins and can’t,” Overstock chief executive officer Patrick Byrne said in an interview last month.
‘ON SCHEDULE’: Chief executive officer Rick Tsai said that TSMC ‘remains our most important partner’ as MediaTek seeks to meet robust customer demand Chip designer MediaTek Inc (聯發科) yesterday said it has secured a second customer for its customized artificial intelligence (AI) accelerator for data centers, while volume production of a second-generation chip for an existing customer is on track for early 2028, potentially easing market concerns about possible delays. This is a new customer and, crucially, not from China, MediaTek said. The remarks were meant to dismiss speculation that ByteDance Ltd (字節跳動), the parent company of TikTok, was the second customer for MediaTek’s new customized AI application-specific integrated circuit (ASIC) business. “It is on track, on schedule. We understand there is some noise about the
SPILLOVER: With foreign capital continuing to leave the market, traders expect the NT dollar, which fell NT$0.168, to face further depreciation pressure, an analyst said Taiwanese stocks yesterday plunged 3.59 percent, with the TAIEX recording its seventh-largest single-day point loss, while the New Taiwan dollar slid to a more than 18-month low against the US dollar, as a global technology sell-off and accelerating foreign fund withdrawals battered local financial markets. The benchmark TAIEX fell 1,612.6 points to close at 43,307.54, with turnover reaching NT$928.058 billion (US$28.33 billion) and more than 1,000 listed stocks declining. Concerns over returns on massive artificial intelligence (AI) investments have triggered a global retreat from technology shares, particularly US chipmakers, while uncertainty surrounding US midterm elections has added to investor caution. In Asia, the
US chipmaking giant Nvidia is ordering its data center partners to scale back work with Chinese customers, the Financial Times reported yesterday. Nvidia’s cloud computing customers must sell at least 51 percent of their services to non-Chinese companies, the FT reported, citing five people with knowledge of the matter. The new rules only affect future contracts and not existing agreements, the report said. Nvidia neither confirmed nor denied the report, but said in a statement that “datacenters and clouds built on American chips are the foundation that American model and application makers need to compete worldwide.” “Longstanding US policy encourages every cloud to build
OUTLOOK: Tech stocks worldwide have come under selling pressure ever since last month, and Taiwan’s stock market is not expected to be spared, an analyst said The TAIEX is expected to face heavy downward pressure today after American depositary receipts of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday plunged 5.95 percent, tracking a broader sell-off in US tech stocks on Wall Street amid concerns over massive artificial intelligence (AI) spending. Disappointing sales at some US technology companies spurred the worst drop for stocks since June, with the tech-heavy NASDAQ Composite Index falling 2.86 percent on Friday, while the Philadelphia Semiconductor Index plunged 7.20 percent and the S&P 500 fell 1.8 percent, breaching its 100-day moving average. Chipmaker Intel Corp and social media firm
RSS