Taiwan Semiconductor Manufacturing (TSMC) Offers Gloomy Revenue Forecast for Crypto Mining

Cryptocurrencies have been facing a bear market for over a year now. Many companies even indirectly related to the crypto market have been reporting losses and downtrend in their revenue. Following this trend, the Taiwanese chip manufacturing giant Taiwan Semiconductor Manufacturing Co. (TSMC) reported a drop in its crypto mining-related revenue in 2018.

This statistic was brought to light when they published their financial results of Q4 2018. The report was published on Jan. 17 paired with an earnings call transcript. The report also presented a gloomy future for smartphone-related companies in the coming year.

TSMC is a major supplier of Application-Specific Integrated Circuit (ASIC) chips to many crypto mining businesses. The mining giant Bitmain (which is in trouble as well) reported that 60% of their total chip supply came from TSMC in 2017 and the first half of 2018. Regarding the sales in the upcoming year and more specific data than mentioned in the report regarding the crypto mining revenue, TSMC CEO & Vice Chairman C.C. Wei said in the earnings call transcript report, “Cryptocurrency is a big drop from 2018 to 2019. So if we put the cryptocurrency together in the HPC, it’s a big drop. It’s almost a double-digit.”

When asked for more exact data, Mr. Wei noted that cryptocurrencies had contributed a lot to the TSMC’s chip sales last year. However, he insisted that the firm could not specify too much regarding the specific segment of the report due to its relation to one big customer of theirs.

Mr. Wei also talked about the crypto mining revenue for the upcoming year. He added that he can’t provide a percentage forecast as to the volatility of the sector. “Okay. This year, we don’t forecast — we become conservative in forecasting this volatile business. So the cryptocurrency mining this year is much, much less than last year. And to what percentage, I don’t think it’s — I can release it right now.”

The firm’s hesitance in specifying a percentage is related to the fact that a low percentage could further discourage investors and cause a panic, which would hurt the market.