ASICs more expensive than they were 6 months ago?

[crazyates]

I've been following and tracking the ASIC prices for many months now, since BFL first released their first announcement. Back in the beginning, BFL, bASIC, and Avalon were all similarly priced, some better than others.

My unit of measurement that I've been using since the beginning is how many GH/s can $1,000 USD get you? At the beginning, BFL started us off with ~30GH/1kUSD. Over the next few months, competition and spec-increases upped that to 50-60GHs/1kUSD for all 3 manufacturers. Now, I know the exchange rate is way higher than it was a year ago, but that actually makes it worse to buy ASICs!

Right now, a Batch 3 Avalon gets you ~8GHs/1kUSD. BFL's new prices put them ~20GHs/1kUSD. The ASICMiner blades and USB Block Erupters are the worst, at not even 2GHs/1kUSD. The best are those DIY Klondike boards that use the Avalon chips, but best estimates put those ~21GHs/1kUSD.

So I guess my question is, what happened? Why are ASICs anywhere from 2-20x more expensive than they were a year ago? Or six months ago? It's like the most expensive time to buy ASICs right now, and I can't figure out why.

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[-ck]

All the manufacturers expected a really tight release schedule from everyone and hefty competition with a sudden massive risk in difficulty making huge profitability only a short term prospect. None of that eventuated, and anyone with anything to ship right now can charge whatever they want since people can see how much profit can be made on this side of the diff rise curve, and people will still pay for it.

[YipYip]

All the manufacturers expected a really tight release schedule from everyone and hefty competition with a sudden massive risk in difficulty making huge profitability only a short term prospect. None of that eventuated, and anyone with anything to ship right now can charge whatever they want since people can see how much profit can be made on this side of the diff rise curve, and people will still pay for it.

market forces

[Terk]

So I guess my question is, what happened? Why are ASICs anywhere from 2-20x more expensive than they were a year ago? Or six months ago? It's like the most expensive time to buy ASICs right now, and I can't figure out why.

The demand is skyrocket high, but the supply is almost nonexistent (measured in number of units actually shipped). That means high prices.  Also, remember that one year ago ASICs were only an idea and people preordering then were gambling a lot. Today we have actually first units working and shipped and it's less risk to get involved.

Right now, a Batch 3 Avalon gets you ~8GHs/1kUSD. BFL's new prices put them ~20GHs/1kUSD. The ASICMiner blades and USB Block Erupters are the worst, at not even 2GHs/1kUSD. The best are those DIY Klondike boards that use the Avalon chips, but best estimates put those ~21GHs/1kUSD.

Well, the difference is:

2 GHs/$1k from ASICMiner blades are actually being shipped as we write. You pay the premium for that.

8 GHs/$1k from Avalon for 3rd batch is coming from a company that previously shipped some ASICs and is currently shipping 2nd batch, so we know that they are able to deliver, and they deliver with very little delay - and that's a lot of confidence. But it's still for devices that aren't ready and will be manufactured in the future, so the price is lower than for devices ready to ship now.

21 GHs/$1k from Avalon for chips is coming from the same company and for products yet to be manufactured. But it's a half-product which requires a huge DIY process, so that'll always be less expensive.

20 GHs/$1k from BFL, a company that never previously delivered and that promised to deliver many months before, it's actually the most expensive if you consider risk and their credibility. They should actually sell at 100-200 GHs/$1k to cover their low credibility and the risk factor included with this purchase.

In other words. Would you rather pay $115 for 1 BTC sent to you right now by a trusted person, or $40 for a promise to send you the 1 BTC somewhere in the future made by some anonymous, newly registered forum member? This is why the price for actually shipped equipment is higher than for the virtual/promised ASICs.

[glendall]

Was going to add something but isn't much to say after that great ^^^ post which sums it all up.

[Bitsaurus]

Silly analogy since I don't really watch American football but this popped into my head.  Know how when there is a fumble and the ball rolls around and both teams think it's out of play.  Then all of a sudden they start scrambling for it.  I think it's the same thing.

Everybody assumed 10K units would be out in 2 months last October (well, not the BFL doubters).  When that failed to happen it was like  and then  and now the mad rush to get a device before everybody else.  Not that ASICs are any better than GPUs or CPUs but they're a huge leap ahead.  Early adopters of each step win.

Each company is trying to sell to early ASIC phase adopters.

[FCTaiChi]

ASIC 

You can see here that the more likely you are to get an one from a company the more expensive they are.

[smoothie]

Well if you price it in terms of btc and its fiat value...ASICs have become much cheaper.

Imagine sending roughly 5500btc to order a BFL mini rig.

You could manufacture your own chips for the price...well maybe.

[Malawi]

So I guess my question is, what happened? Why are ASICs anywhere from 2-20x more expensive than they were a year ago? Or six months ago? It's like the most expensive time to buy ASICs right now, and I can't figure out why.

I think it's a combination of that ASIC developers might not have seen how expensive it would be to develop their ASIC, paired with delays, skyrocketing BTC price and extreme demand.

In a few months the market will be saturated and producers will have products in their shelves, then prices will drop significantly.

[andrewsg]

ASIC 

You can see here that the more likely you are to get an one from a company the more expensive they are.

A lot of wisdom in that observation. And thanks for your compilation work.

[GodHatesFigs]

Friedcat said that the margin cost for 1TH of their boards is $10K, so they can produce 100GH/$1K

[Photon939]

20 GHs/$1k from BFL, a company that never previously delivered and that promised to deliver many months before, it's actually the most expensive if you consider risk and their credibility. They should actually sell at 100-200 GHs/$1k to cover their low credibility and the risk factor included with this purchase.

BFL has delivered quite a few FPGA based systems, and now a very small handful of ASICs, however Josh's mouthing off and lack of progress is much worse than Avalon even though Avalon is now experiencing some fairly significant delays

[Carleton]

You can put ASIC in almost anything and sell it for 5 times the original price, and the best part is you don't actually need a product.

Some website is boasting a 1,000 Ghash/s machine that goes for 15k and consumes 2,800 w electricity, but it "Absorbs nirtogen from the environment" and somehow converts it into nitrogen cooling system...

Then you have some eBay stuff that offers "ASIC mining machine" that has no venting on its case, but has an audio jack.


As far as we know, the only ASIC out there are on YouTube.


on a side note, a few units of Avalon Batch 1 are on sale on China's eBay, but going for $50,000 USD+.


Bottom line is most FPGA out there are priced at a 5 month break even projection, so whoever can sell ASIC has no incentive to sell at below this price when considering that ASIC uses less electricity and doubles as a chic magnet.

[one4many]

Everybody (including manufacturers) are scared from the THash jump they would/could/should/do create.
So if you can get your hands on ASICs right now to be ahead of the curve, you pay a premium.