The bitcoin symbol. (Photo/Commercial Times)
Taiwan Semiconductor Manufacturing Company, the world's largest dedicated independent semiconductor foundry, has become one of the biggest beneficiaries of the growing bitcoin mining industry, reports the Commercial Times, our Chinese-language sister paper.
With the value of one bitcoin rising to as high as US$1,200 in December from around US$13 at the beginning of last year, the market for high-end graphics chips and application-specific integrated circuit chips has also been skyrocketing as bitcoin mining hardware manufacturers look to satisfy the demand of bitcoin miners seeking to cash in on the controversial virtual currency.
Unlike real currencies, bitcoins have no central authority or government-based backing and are essentially a code that is traded between two people. New bitcoins enter the market in "blocks" via a process known as "mining," which offers decentralized dissemination and motivates people to provide security for the system.
A new block containing a record of all bitcoin transactions is automatically released every 10 minutes. Bitcoin miners must "solve" the block — effectively by figuring out a complex mathematical problem using their computers — in order to earn a certain number of bitcoins. Currently, each block awards the miner 25 bitcoins, though this value will halve every 210,000 blocks, or roughly four years. The total number of bitcoins will eventually hit a ceiling of 21 million. There are currently around 12 million bitcoins in circulation.
Finding new bitcoins requires huge amounts of computing power and has become a highly competitive industry. Some high-powered computers used for bitcoin mining can cost up to US$20,000.
As bitcoin mining hardware requires the use of a central processor and graphics processing unit, Taiwanese computer motherboard manufacturers such as ASRock and Biostar and IC designers like Global Unichip and Alchip Technologies have become major beneficiaries of the bitcoin craze.
Arguably Taiwan's the biggest beneficiary is Taiwan Semiconductor, which has signed on to be the contract manufacturer for two of the world's largest makers of high-end graphics cards, American technology companies NVIDIA and AMD.