TSMC announces plans to set up a 5nm fab in the U.S. next year, Huawei faces export restrictions, impact on Bitcoin mining machines may be minimal

TSMC (Taiwan Semiconductor Manufacturing Company) announced on the 15th its intention to build an advanced semiconductor fab in the United States, scheduled to begin construction in 2021. The fab will utilize TSMC's world-leading 5-nanometer process technology to produce semiconductor chips. Once in full production in 2024, it is estimated to have a monthly capacity of 20,000 wafers. According to TSMC, this move aims to strengthen its relationship with the U.S. and the government of Arizona, and enhance competitiveness through the robust investment environment and talent in the United States.

Is this related to Bitcoin mining machines?

According to interviews with Taiwan semiconductor industry personnel Josh (Lu Zijian), TSMC's 5-nanometer production moving outside Taiwan to the United States reduces the risk of technology theft compared to moving to China. In terms of production capacity, the US plant's monthly capacity of 20,000 wafers is not high, while the capacity for 7-nanometer is 140,000 wafers.

More importantly, the 5-nanometer orders mainly used in 5G and AI-related applications are not accessible to mining machines. After Huawei's chip design company HiSilicon reduced orders, Apple immediately took over the capacity. If the US blocks Huawei in the future, the capacity may be taken over by other major phone manufacturers.

Josh mentioned that TSMC's 5-nanometer production capacity has not been fully utilized this year, and this highly sought-after capacity worldwide is expected to account for 10% of its revenue in 2020. The major customers Nvidia, AMD, MediaTek, Apple, and HiSilicon have already filled up the 7-nanometer capacity.

Even though we heard at the end of 2019 that Chinese mining machine manufacturers Bitmain and Canaanstated they would adopt 5-nanometer chip mining machines in 2020, the halving of Bitcoin block rewards has led to a sharp decline in small miners' profits. In addition, internal struggles at Bitmain and Canaan's poor performance suggest that TSMC's actions may not be directly related to Bitcoin miners for the time being.