Here is an ugly and nasty story of INNOSILICON.
It happened a few years ago. Innosilicon appeared to be a very bad partner for a BITMINE AG company who produced their miners, but went bankrupt due to Innosilicon unfair behaviour.
BITMINE AG paid 8M CHF to Innosilicon for development and production of chips that turned out to be a
JUNK.
This story also points to the fact that Innosilicon produces chips of a poor quality. This explains why their last A5 miner are so bad. It starts burning, and Inno issued already a few software patches trying to fix the issue.
Open letter from the former BITMINE AG managementInnosilicon. The company that we engaged for the development of our A1 CoinCraft chip ended up in being BITMINE’s biggest failure. We engaged this company with a regular contract and entitled them to develop our 28nm ASIC based on our know-how and instructions, along with the full turnkey process of creating the mask, wafers and IC packaging. We had signed a contract that was expecting to guarantee us a one year exclusivity on the chip, however at a later stage we received proof that Innosilicon was plainly violating the contract from day zero and selling our own A1 chips to whoever inquired them directly. Once we pointed this out, they simply stopped answering our enquiries and disappeared, putting us in obvious panic because we had an extremely tight schedule and obligation to deliver the miners on time and they knew that perfectly. So, once they knew how attractive the market we were into was, they forced us into signing an amendment to the contract where we allowed them to sell the A1 chips to third parties. Additionally, they even forced us to write formal excuse letters for the “false” accusations under the threat that if we hadn’t signed them, they would just delay the supply of the A1 chips so long that they would be worthless.
Once the first production lot of chips, with a delay of nearly two months and a performance 50% worse than promised was delivered to us, the issue of “yield” popped up. Innosilicon repeatedly delivered us broken chips or “junk grade” ones as part of the purchased (and paid for) lots, forcing us to place ever bigger and bigger orders in order to fulfill our customers’ orders and eventually draining out most of the company’s money. Out of all the ordered chips, a huge part of them were simply not working and could only be thrown away in the garbage bin. Here you will see for yourself the pictures of the piles of tens of thousands of worthless junk grade chips still sealed in their original packages. When asked about clarifications, they claimed this was “normal production yield” but failed to provide any relevant document that could certify it. It is also worth mentioning that while we were struggling with thousands of junk chips, the A-grade ones could at all time be purchased in Hong Kong directly from their Chinese resellers, at some point even at lower prices than what we ourselves paid for.
At the end of this horrific experience, we had paid to Innosilicon in 2013 and 2014 a total of more than 8 million CHF but received only a small amount of usable A1 chips, causing us a huge financial loss. Therefore, we enquired two different lawyers in order to evaluate legal actions against them, but ended up with answers that more or less said that the chances of getting our rights respected from a Chinese court against a local Chinese company were close to zero. We only later found out this is a common practice from Chinese companies, regardless of the written agreements you make with them.
http://bitmine.ch/
