What if Samsung or Toshiba were to make ASIC chips?

[OROBTC]

...

Before I looked into Bitcoin, I had never heard of BitFury and KnC and similar.

Which leads me to wonder what would happen to mining hardware should a Samsung or Toshiba entered the busines of making these special chips.

Samsung Electronics is Korea's largest company.  I have seen "Koreans in Action" (at their ball bearing plants, very impressive).  Do not discount S. Korea as a potential major player in the world!  Koreans are smart, tough and work hard.

Toshiba of Japan is also good at making mass quantities of good chips.

Perhaps even Intel or Qualcomm?

Would a major chipmaker like any of the above have a significant influence on BTC?

[Yeezus]

They could probably make them cheaper because they have the resources to make them quicker and cheaper.

[freedomno1]

It should be out of their interest for now as it is not profitable enough
That could change though in a few years
But the already developed industries might have scale to compete against them

[S4VV4S]

It should be out of their interest for now as it is not profitable enough
That could change though in a few years
But the already developed industries might have scale to compete against them

^^^^ That

It is not profitable for any company to step in unless they can do 14nm chips, which still......

[franky1]

...

Before I looked into Bitcoin, I had never heard of BitFury and KnC and similar.

Which leads me to wonder what would happen to mining hardware should a Samsung or Toshiba entered the busines of making these special chips.

Samsung Electronics is Korea's largest company.  I have seen "Koreans in Action" (at their ball bearing plants, very impressive).  Do not discount S. Korea as a potential major player in the world!  Koreans are smart, tough and work hard.

Toshiba of Japan is also good at making mass quantities of good chips.

Perhaps even Intel or Qualcomm?

Would a major chipmaker like any of the above have a significant influence on BTC?

imagine AMD you mean..

[Dr. Pepper]

I wonder what would happen if a company came along that could offer really cheap miners that most could afford? It would be sweet if regular people could get into the mining game again.

[franky1]

I wonder what would happen if a company came along that could offer really cheap miners that most could afford? It would be sweet if regular people could get into the mining game again.

bitcoin mining companies only sell the miners because they can make more money shipping them out, rather then running them for 6 months (alot of electricity bills)

it mining was long term profitable, they'd mine them themselves.. now you know why BFL dont instantly deliver.

its why excavator companies dont dig for gold, as they make more money just selling the excavators then deploying teams to go out for months digging into the ground. knowing in a few months the miners will need better equipment.

miners will forever shoot themselves in the foot, forever upgrading their rigs, if it was made cheaper, miners would just buy more of them, all trying to get that little extra, and all just causing it to get harder for themselves.

the whol make it cheap wont ever work.

if a 1Thash became 10% the price, people will just buy 10 of them instead of 1.. the slice of the pie wont change.. it will just take longer for the pie to cook (ROI)

[Peter R]

The design of integrated circuits (e.g., SHA256 ASCIs) can be carried out independently from the semiconductor fabrication.  The is known as the foundry model.  KNC and BitFury would be known as "fabless" semiconductor companies.  The bitcoin mining chips would be produced in a foundary that does jobs for all different fabless semiconductor companies, realizing efficiencies of scale without each fabless company needing to build a foundry!  The largest pure-play foundry is TSMC in Taiwan, with $20 billion in revenue last year.  Even Intel (at least according to this article) is considering allowing their foundries to be used by other groups.  So yes IDMs like Samsung or Intel could begin to produce bitcoin mining ASICs, but their advantage wouldn't be that great (and perhaps negative) because the ASICs can already be produced in world-class facilities.  

[Peter R]

imagine AMD you mean..

AMD has been "fabless" since 2009: http://www.fabtech.org/news/_a/official_amd_goes_fabless/

AFAIK, AMD contracts TSMC to produce ICs.  So you can just contract with TSMC directly. 

[OROBTC]

...

Very interesting, "thank yous" to all of you knowledgeable folks above, I appreciate it.

"It seems like" (to me anyway) that bigger players may get into this (making LARGE quantities of these chips).  But, I see your points above re profitability and fabricators (TSCM).

What would stop some heavily capitalized company from going to a TSCM and making millions of these chips...?

[bryant.coleman]

I don't think they will start producing mining rigs and ASICs all of a sudden. If they feel that the manufacturing of Bitcoin mining equipment is a promising sector, then most probably they will purchase some of the ASIC manufacturers, such as TerraHash or KnCMiner.

[Peter R]

What would stop some heavily capitalized company from going to a TSCM and making millions of these chips...?

Nothing.  The sooner bitcoin mining ASICs become "commodities" so that I can order the chips at DigiKey, and have them delivered next day, the better.  The fact that only certain companies have the IP for the best chips (AFAIK I can't even buy the 20nm KNC ICs) actually contributes to mining centralization.  For example, a company I consult with is interested in setting up a >$1 million bitcoin mine in British Columbia.  The biggest risk when they crunch the numbers is securing a constant stream of new hardware at the true market price.  

[LiteCoinGuy]

i guess that will happen someday.

[rext]

That would be great if it happens

[Stinky_Pete]

A miner is more than just the ASIC.

[knightcoin]

I past thi text from

electronics.stackexchange.com

I looked into ASIC's a while ago and here's what I found:

Everybody has different definitions for the word "ASIC". There are (very roughly) three catagories: FPGA Conversions, "normal" ASIC, and "full custom". As expected, these are in order of increasing price and increasing performance.

Before describing what these are, let me tell you how a chip is made... A chip has anywhere from 4 to 12+ "layers". The bottom 3 or 4 layers contains the transistors and some basic interconnectivity. The upper layers are almost entirely used to connect things together. "Masks" are kind-of like the transparencies used in the photo-etching of a PCB, but there is one mask per IC layer.

When it comes to making an ASIC, the cost of the masks is HUGE. It is not uncommon at all for a set of masks (8 layers, 35 to 50 nm) to run US$1 Million! So it is no great surprise to know that most of the "cheaper" ASIC suppliers try very hard to keep the costs of the masks down.

FPGA Conversions: There are companies that specialize in FPGA to ASIC conversions. What they do is have a somewhat standard or fixed "base" which is then customized. Essentially the first 4 or 5 layers of their chip is the same for all of their customers. It contains some logic that is similar to common FPGA's. Your "customized" version will have some additional layers on top of it for routing. Essentially you're using their logic, but connecting it up in a way that works for you. Performance of these chips is maybe 30% faster than the FPGA you started with. Back in "the day", this would also be called a "sea of gates" or "gate array" chip.

Pro's: Low NRE (US$35 is about the lowest). Low minimum quantities (10k units/year).

Con's: High per-chip costs-- maybe 50% the cost of an FPGA. Low performance, relative to the other solutions.

"Normal" ASIC: In this solution, you are designing things down to the gate level. You take your VHDL/Verilog and compile it. The design for the individual gates are taken from a library of gates & devices that has been approved by the chip manufacturer (so they know it works with their process). You pay for all the masks, etc.

Pro's: This is what most of the chips in the world are. Performance can be very good. Per-chip costs is low.

Con's: NRE for this starts at US$0.5 million and quickly goes up from there. Design verification is super important, since a simple screw-up will cost a lot of money. NRE+Minimum order qty is usually around US$1 million.

Full Custom: This is similar to a Normal ASIC, except that you have the flexability to design down to the transistor level (or below). If you need to do analog design, super low power, super high performance, or anything that can't be done in a Normal ASIC, then this is the thing for you.

Pro's: This requires a very specialized set of talents to do properly. Performance is great.

Con's: Same con's as Normal ASIC, only more so. Odds of screwing something up is much higher.

How you go about this really depends on how much of the work you want to take on. It could be as "simple" as giving the design files to a company like TSMC or UMC and they give you back the bare wafers. Then you have to test them, cut them apart, package them, probably re-test, and finally label them. Of course there are other companies that will do most of that work for you, so all you get back are the tested chips ready to be put on a PCB.

If you have gotten to this point and it still seems like an ASIC is what you want to do then the next step would be to start Googling for companies and talking with them. All of those companies are slightly different, so it makes sense to talk with as many of them as you can put up with. They should also be able to tell you what the next step is beyond talking with them.

[Peter R]

A miner is more than just the ASIC.

Yes, and this is a reason I'd like to see the SHA256 ASICs become "commodities."  If the profit margin is reduced on the ASICs themselves, then mining hardware manufactures will compete on "system design" and "customer service," where there are less barriers to entry.  The most successful hardware will:
   - maximize GH/s per customer $ spent to procure that hardware
   - maximize GH/s per watt of electricity consumed
   - deliver product on schedule to customers
   - build reliable products and provide good customer service
and not the ones that control the supply of the best ASICs.  

As these chips become commodities, the supporting documentation will include detailed data sheets and application notes with "reference designs" for miners.  The problems that the early hardware developers spent millions of dollars solving will just become part of the state-of-the-art, making development easier for everyone (yet more competitive).  

...

Useful post; thanks knightcoin.

[david123]

What would stop some heavily capitalized company from going to a TSCM and making millions of these chips...?

I think I read somewhere that TSMC produces the "Hammer" chip for spondooliestech, so this
is just what is happening today..