Update

If final decision is made, the auction will be for ready-to-use devices instead of chips. Having the advantage of inexpensive whole device manufacturing cost, selling only chips in a limited market (at least now) is not our option.

In our plan, the auction of limited sample boards will have one round per week, and last for a few weeks. After we have enough feedback and information we will do with more quantity and revised designs. But don't expect our products to spread towards everywhere at least in the next month, because most of our next batch will be used for ourselves.

The products are going to most likely be shipped from Hongkong. And what we accept is ordering instead of pre-ordering, which means that when we decide to sell, we ship it. Hopefully this makes our products be valued higher by the market.

The order of wafers and devices are not so much. What costs the largest part of money is the NRE of a full-mask set. We chose to do MLM from the start to reduce the NRE cost and hence the total money we need to raise during IPO, but the much higher margin cost and the refusal of the fab to produce any more with the MLM set resulted in the decision to do the full-mask. Because after it's done. The cost of each wafer will reduce by ~33% and the quantity limitation from the fab will be removed.

The next week will be a little lower because we still have some balance payments undone yet, but the largest cost will only be the electricity.

This week is our most spending-intensive one. We have paid for:

The premium of a full mask (75% of the total price)
The premium of 100 wafers (50% of the total price)
Most balance payment of the 50TH/s batch's components

We also reserved the coins for:

The premium of half-month electricity usage in the new place
The balance payment of assembly

There won't be more spending besides further wafer & device production and operating cost, which will be much less per week. The next projected big spending is the full mask of our next generation of chips, with the taping-out date undecided yet.

The portfolio stays fixed and is under no active management yet. We have been always passing the dividends from our holding assets directly to our shareholders after last update.

Buy-back is of course an option. I personally have almost no time actively managing it so either buying back or keep it as a pass-through of a fixed set of assets are the most possible outcomes. The price and the buy-back clauses would be set-up within the next two months if there are no better way to make MU more interesting.

They haven't been entitled to any privileges. The "you" in "you break even first" mean merely investors, not ASICMINER shares themselves. In another word, we have paid all net profits before the investors break even to the circulating 163,962 shares. Otherwise the date of finishing our first clause couldn't have been so early given that we had paid all the emergent debts and balance payments.

Update

Clarification of Unsold Shares
Now ASICMINER controls 163,962/400,000 of the whole identity, while Bitfountain controls 236,038/400,000. The former shares will not be diluted, while the latter will. Whenever we need to sell shares to raise funds or giving potential core employees shares/options, only our (Bitfountain's) shares will be reduced.

We consider it to be very fair to investors, because while either letting the investors break even first or protecting the investors from dilution are seen everywhere, having both at the same time is not that common, especially when the portion at the investors' side is already large.

Device Selling
After careful consideration, we decided to address it as a very important decision ahead. There are two factors that serve as the motivation of selling our devices earlier than what we planned before:

1. Vacuum of Deployment. We are now experiencing one. The unconventionally high power density makes our devices hard to be deployed to professional data centers, which also have very high rent charges as their extra downside. So we had and will have to build them of our own. It's a difficult task in a sense that besides the long cycle, unexpected incidents will create a period that we have a lot of devices lying there waiting to generate hashes.

2. Quantity in the Future. The price negotiation of the full mask is almost finished, so if there are no surprises, we will have virtually no third-party limitations on how many chips we could produce in this year. If the exchange rate of BTC against USD further shoots up in the next few months, we could even produce hundreds of wafers each month. Deploying all of them in time is out of our reach unless we expand significantly, which might be pre-mature and inflexible.

The most significant factor in selling devices is pricing. Devices are extremely illiquid because the trading and transportation are great ways of wasting the precious hash-time. Therefore no one knows how they should be priced yet. We would like to do the price discovery with auction by small quantity. The total number used for discovering the price will be very small compared to the whole batch, and the slow deployment rate before the construction of the whole farm infrastructure of the rest and arriving devices provides another motivation.

Other Info
We met a temperal black out this morning. It's caused by the capacity expansion (installing cables and switches). The PCB of the main board and the power module have been finished. The assembling will start as soon as the chips are packaged and passed the automatic tester. Our use of ~0.5MW of power in the new place is also approved. The network bottleneck is not in the internet connection side, but in our local Ethernet. It could be solved by optimizing the firmware and the switch structure, but a simple hot-fix is to add more internet connection accounts and routers, which is what we are doing now. The slow pace of the infrastructure building is also a hard limit, and it forced us to scatter a small portion of our devices to temperal places. They should be put back as soon as the permanent place is OK.

First week's normal dividends paid. The balance payment of the next batch, as well as the premium for a full-mask to guarantee our quantity production (200 TH/s or more, depending on how well BTC/USD could do) within the next three months, are partly taken from this week's revenue and the next week's. So the dividends within these two weeks are lower than normal.

We confirm that paul@btcsyn.com with the Bitcoin address 13rwPKskyATcAq3PpnCikfFG8989DQ8M3c indeed holds 204 shares.

We confirm that Gabit indeed has enough shares for the auction.

Next batch is at least 50TH/s, which will be assembled and available in the early or middle of next month. Before that we have to gather more employees to form a deploying team because it's nearly a magnitude larger. We also have to deploy the rest of the first batch during this period (between now and the time next batch arrives) with or without new members to the company.

And this is estimation. We had somehow missed of the chips production cycle (actual arriving date: late December, estimated: late October to November) and the production/deploying cycle (actual deploying date: still going on, estimated: within March). Unexpected things happen, but we are fully aware of the reason of delays of the first batch and avoided the most in the next one.

Update

Board members
A mail has been sent to the board member mailing list. We are sorry for the long interval between the last one and this.

OP
The main thread is under a re-writing since much information of the original one is out-dated. The old OP is backed-up by forum members in the replies.

Status
This week's dividends will be paid twice. The first is to pay the rest of the 0.1BTC/share, that is 0.00750846BTC/share. The second is to start the normal payment which splits proportionally between ASICMINER and Bitfountain.

This week meets more stagnancy of deploying. But in the last few days we poured 0.5TH/s into our mining farm as the installing of power cables in the new place goes on. The total hashrate grows much less than this, mostly possibly because of the bottleneck in our local network setting. We are still identifying and fixing the problem.

Next batch
The critical path is on either the packaging company's testing, or the interval between ordering and delivering of some components. Either way the assembly will finish in next month. Here is what the next batch improves over this one:

* The chips are functionality tested by the packaging company using automatic devices instead of by ourselves.
* The power supply will be sufficient for most, if not all, of the devices and cooling settings even with overclocking. No further large-scale migration will be needed.
* With better heat solutions, they are to be all overclocked by default.
* More people will do the deploying and maintainance for us.

Pre-Update

I'm in the farm and fixing the network connection problem. Using a cellphone to write this post.

This week's update will cover the stagnancy of this batch, the production status of the next, and a rewritten OP to reduce the number of recent growing mails and PMs asking for long-non-available IPO shares.

Update

Status Quo
The PCB production of the main board and the power module has started. For safety the second batch has no changes with respect to the PCB design. However the mechanical parts will meet some improvements to cope with more heat introduced by possible aggressive overclocking.

The deploying of the first batch had met more stagnation since the rewiring for increasing of power capacity of the new place has still been going on since the last week. There are no accidents like fire or steal. Our devices are fused from the house level to the board level, and our workshops (both old and new) have both a public (district-based) and a private (building-based) security system. Most of the boards ran 24/7 without any dysfunction or slowdown. Sometime one or two PSUs may stop working but that's because in our original setting they are a way close to be overloaded.

Further Plans
We definitely will move to better technology. And in the next few years we will keep benefit from our design experience of IC and PCB boards, our accumulated contacts to the manufacturers, and not-yet-fully raised low costs in mainland China.

We contribute to the network security as all other miners do. If you think that miners are not necessary for the btc ecosystem then we are not. Objectively every single dime spent on mining devices by people inside the community reduces a little probability of Bitcoin being taken down by malicious organizations.

ASIC manufactures sell devices to miners. We are both an ASIC manufacture and a miner. Does this make us less useful and more evil than both?

Yes. We expect late April to be fully online, but that would require we successfully get enough right employees and there's nothing unexpected during the production process.

We expect a long-lasting, sharp and harsh difficulty rising therefore this will not likely to be a concern. If it becomes very fortunate for us that the difficulty climbs up slow, selling the devices at that moment at a low price as the current market price is not wise and too early. Refraining the hashpower for several days or weeks may be a better choice.

The ~50TH/s batch.

Still more than one week to finish the first clause of ASICMINER's investor protection.

687 Bitcoins have been excluded from the dividends to pay for the premium of pcb production, assembly and components of the next batch, as well as the operation costs.

Update

It has been and will always be me myself who use the forum id friedcat to post updates and replies. If my partners are to announce the news or contact the shareholders instead of me, they will use their own account. Sorry for the sketchy and lack of information of the last update. I was exhausted and using a cellphone to make the reply.

The current running accounts are:

(ID 67117) on btcguild.
bitfountain, bitfountain1, bitfountain2 on ozcoin.

The anonymous user on ozcoin is not us. It might be a user with gradually bulk-purchased ASICs from other vendor, or another pool redirecting to ozcoin. Anyway we are also having not enough information to make the right conjecture. We are only of indirect competition against them. What we are directly chasing, is just the difficulty of the network.

The slow online speed is unexpected. It was caused by the bottleneck of the last stages of assembly several weeks ago, and a major modification of power supply as well as partial migrating to a larger place in the last week. Although we do not sell our devices yet so the vocabulary may be inaccurate, but roughly speaking the solution we are having is still a prototype instead of a product. Troubleshooting and time consuming works such as upgrading the power scheme and getting contracts with the other workshop has been taken up all the last week. But the best part is that most of them are one-time missions and will not be of a regular basis.

Taking as much our first-arriving advantage as we can in the limited time window is very important. All buyers of first batches of ASICs are of course having the same advantage and eating our portion especially when we were facing unstability and delays. However, as mentioned before, our shareholders are in a better place than individual miners, even those early-purchasers of ASICs. Because they share our expansions while we get the devices at the price of NRE+margin cost, instead of the price from any mining device vendors. Here is a rough estimation in the mid-term based on the rough estimation of our timeline:

By early April the next batch of finished devices will be available for deploying. At that time we will have a full team for installing and maintainance. If we get the 60TH/s online (conservative) in late April, and the hashrate of the full network from that time is 200TH/s which linearly increases to 1,000TH/s in late December. (200+1000)/2 = 600. So we will have 10% in average of the full network from late April to late December. That translates to about 88,000 Bitcoins total mined. That is 0.22BTC/share of gross income in eight months.

Also, we will always be mining from now to late April, so the revenue in this period should be counted in. And we will have more income in advance in the next years after we have access to much cheaper power. Some may say that 1,000TH/s in the end of this year is too conservative. But the calculation above about our capability is even more conservative because it does not contain our further expansion with more power efficient next-gen products.

It's possible and will definitely do it. Also in the next days if without special circumstances/announcements, new hashpower will be added to the four existing accounts. And in further future if we solo, switch to new pools, or add new accounts of ours, we will not make them anonymous but make them seen by anyone, the same as the four existing accounts.

The reason why we will give a limited number of trial boards out, is that we promised it long before (starting from Aug. 2012, the same time period when we did the fundraising via GLBSE). We did it with the intention of hoping the community could spread positive news and improve our firmware/hardware designs. We haven't predicted that our project has already proved itself to mass and already has the potential of meeting large customers if we are to sell some devices in the future without any real advertisements. We also haven't predicted that we are now way quite satisfied with our firmware and hardware design though they are done in an extreme hurry.

Of course. And indeed, sorry for the inefficiency of contact these days.

Update

The market finds a way for more liquidity. What we want to emphasis again is that we are neutral towards all shareholders, treating each share and shareholder with no difference. We neither support nor disapprove any non-harmful usage of our shares. And we are not involved in any form of derivatives. We also take no benefits from them besides their positive externality.

We were not great timeline holders so we would like to keep us from giving empty estimated dates. But the next week may possibly see our occupation of more portion in the whole network. Also the second batch is on its way and we are becoming much more prepared to them.

We are fully aware of that we currently owe the board members more active contact and the community the samples. But we have to put effort to the shareholders' side most. We have a lot of plans and ideas to share with the board, and will keep the promise to deliver the trial boards.

Using satoshis to represent share numbers, is both an asking for confirmation and an assurance to us that the transaction will be legal with each week's modification by trading.

Share transfer confirmed.

Share transfer confirmed.

We confirm that Jutarul is indeed associated with the Bitcoin address 1KbAD8KU1u6uw6nHSJEYpdZfgQbNbTAkH2, which serves as his account. We also confirm that the corresponding share number to the address is enough for his auction.