ASICMINER: Entering the Future of ASIC Mining by Inventing It

[101111]

Being the chief architect on CPU mid-cores at one of the biggest consumer electronics companies in the world makes this guy far more qualified than a team of guys in China that made one simple chip at an archaic process node.

Rubbish.

[stripykitteh]

Point is - you should recognize FC has one year of direct experience and this guy has decades of related experience.

That also ties in to a wider point; i.e., there are *hundreds* of vastly experienced chip designers with experience working for Intel, AMD, Samsung, et cetera who are capable of designing a 28nm ASIC. Acquiring the talent is not a big hurdle and there are probably a few more Cointerras lurking in the wings right now.

Exactly. Money buys talent. AM has money. I don't see how one name attached to cointerra threatens AM so significantly.

AM has a massive head start and funds to buy whatever skillset or expertise they may be lacking

They do, but they won't be able to lock up all the talent. Nor will having money beyond a certain point make any difference, and it looks as though the cost of bringing a 28nm ASIC to market isn't that high a hurdle either. I think you are mistaken in thinking AM have a big lead over their competition. They will have a place in the market in the short to medium term, but there's no 'moat' around their business, unlike the ones Microsoft and Oracle enjoy. Anyone with a few million and the right contacts in the semiconductor industry can start eating into AsicMiner's market share within a few months. Jeepers, bitfury isn't even a qualified EE apparently and he's eating friedcat's lunch right now using 65nm.

[Rival]

I would not characterize it as FC getting his lunch eaten when FC sells out of everything he ever offers. Even with populist suggestions that his products are overpriced. Such remarks lead me to believe that people think FC is losing potential profits on products he has not yet produced, which could be said for pretty much anyone else in the marketplace.

Continuously selling out of everything you produce is a sign of success, not weakness.

[BitThink]

I would not characterize it as FC getting his lunch eaten when FC sells out of everything he ever offers. Even with populist suggestions that his products are overpriced. Such remarks lead me to believe that people think FC is losing potential profits on products he has not yet produced, which could be said for pretty much anyone else in the marketplace.

Continuously selling out of everything you produce is a sign of success, not weakness.

Agree with you.

 Having a reliable product line to continuously produce chips and boards is definitely the strength of AM, which is often be overlooked. One of the reasons AM choose 130nm in the beginning was that there were plenty of idle 130nm product lines in Shenzhen that time because exactly the technology is ancient, so AM could find one with very low price and did not need to compete with big players in EE world.

Now some startups are developing 22nm chips, which is the mainstream now. As a result, they have to try their best to secure the product lines. That means to compete with Intel, AMD, SamSung, .... Even if they win, the cost cannot be low for sure. In short, I believe they have the ability to design a chip, but how many they can produce and what is the cost is another thing.

[Mabsark]

I would not characterize it as FC getting his lunch eaten when FC sells out of everything he ever offers. Even with populist suggestions that his products are overpriced. Such remarks lead me to believe that people think FC is losing potential profits on products he has not yet produced, which could be said for pretty much anyone else in the marketplace.

Continuously selling out of everything you produce is a sign of success, not weakness.

Agree with you.

 Having a reliable product line to continuously produce chips and boards is definitely the strength of AM, which is often be overlooked. One of the reasons AM choose 130nm in the beginning was that there were plenty of idle 130nm product lines in Shenzhen that time because exactly the technology is ancient, so AM could find one with very low price and did not need to compete with big players in EE world.

Now some startups are developing 22nm chips, which is the mainstream now. As a result, they have to try their best to secure the product lines. That means to compete with Intel, AMD, SamSung, .... Even if they win, the cost cannot be low for sure. In short, I believe they have the ability to design a chip, but how many they can produce and what is the cost is another thing.

22nm is only mainstream for Intel. Mainstream for everyone else is 28nm. 20nm will become mainstream for them in 2014/2015 while Intel will be moving to 14nm in 2014.

[stripykitteh]

I would not characterize it as FC getting his lunch eaten when FC sells out of everything he ever offers. Even with populist suggestions that his products are overpriced. Such remarks lead me to believe that people think FC is losing potential profits on products he has not yet produced, which could be said for pretty much anyone else in the marketplace.

Continuously selling out of everything you produce is a sign of success, not weakness.

You are missing the point entirely.

[candoo]

Why does he not upgrade/increase the hashrate? Did anyone of the board members speak to him?
I dont think that Hardware sells are good in the long term view..

[candoo]

Because they are developing new hardware instead. Which is certainly more long-term.

And whats the reason to do only one thing instead both of them ?

[Lauda]

The new blades are pretty much useless.

[Vycid]

It still is slightly more lucrative, and brings in the money now instead of later.

Normally, when companies sell out of product,  we assume it was because they failed to maintain enough stock, not because it was "more lucrative". I am quite fascinated by these arguments.

[Strange Vlad]

Depends what "do the job well" means.

These guys are going straight for 28nm.

good for them. However friedcat obviously has much more experience with creating chips and devices for bitcoin mining. I would sooner trust Avalon or Asicminer to create new chip before KnCMiner and Cointerra and Hashfast since they have never created bitcoin mining ASIC chip before.

Making a functional ASIC is not excessively complicated. The complex part is the optimization.  I think you'll find it is really FC's team that lacks experience here, having designed only one chip - I quote, from AnandTech,

Ravi’s focus at SARC was on the CPU Mid-Core, including integer execution and special purpose registers

Being the chief architect on CPU mid-cores at one of the biggest consumer electronics companies in the world makes this guy far more qualified than a team of guys in China that made one simple chip at an archaic process node.

The hardware and boards should be the easy part, given the preponderance of existing packaging companies to partner with (at least for anyone with connections in the industry).

Point is - you should recognize FC has one year of direct experience and this guy has decades of related experience.

The notorious counterexample to what you said is Bitfury.  The guy had NO prior experience, NO special education, and yet somehow managed to develop a quite successful and well-optimized chip from scratch, within less than a year (including self-education), all by himself!

Now please don't imply that superstar engineer can make orders of magnitude difference.  Bitcoin ASIC is not a CPU core, it's just hundreds of small and simple identical SHA256 calculators, not really much to optimize there.

[Strange Vlad]

It still is slightly more lucrative, and brings in the money now instead of later.

Normally, when companies sell out of product,  we assume it was because they failed to maintain enough stock, not because it was "more lucrative". I am quite fascinated by these arguments.

Usually when a company dumps products at a much lower price than before it is to get rid of remaining stock for incoming new generation of hardware. Based on ASICMiners fairly stagnant hashrate (even though they have thousands of these blades left to sell) I'd say it's fairly safe to assume it won't be long before Gen 2 (Whatever that is) is on it's way.

No, they didn't significantly drop the price relative to the value (which is inverse proportional to difficulty).  Actually, the previous price drop (50->10) was even greater by absolute value.

And FC still has some room to drop the price through the next couple of months; I'd estimate that production costs are somewhere around 30 to 60 USD.

[Vycid]

Depends what "do the job well" means.

These guys are going straight for 28nm.

good for them. However friedcat obviously has much more experience with creating chips and devices for bitcoin mining. I would sooner trust Avalon or Asicminer to create new chip before KnCMiner and Cointerra and Hashfast since they have never created bitcoin mining ASIC chip before.

Making a functional ASIC is not excessively complicated. The complex part is the optimization.  I think you'll find it is really FC's team that lacks experience here, having designed only one chip - I quote, from AnandTech,

Ravi’s focus at SARC was on the CPU Mid-Core, including integer execution and special purpose registers

Being the chief architect on CPU mid-cores at one of the biggest consumer electronics companies in the world makes this guy far more qualified than a team of guys in China that made one simple chip at an archaic process node.

The hardware and boards should be the easy part, given the preponderance of existing packaging companies to partner with (at least for anyone with connections in the industry).

Point is - you should recognize FC has one year of direct experience and this guy has decades of related experience.

The notorious counterexample to what you said is Bitfury.  The guy had NO prior experience, NO special education, and yet somehow managed to develop a quite successful and well-optimized chip from scratch, within less than a year (including self-education), all by himself!

Now please don't imply that superstar engineer can make orders of magnitude difference.  Bitcoin ASIC is not a CPU core, it's just hundreds of small and simple identical SHA256 calculators, not really much to optimize there.

So, wait, what's the argument here? That FC has no advantage over the competition because his experience is no greater, or that he has no advantage because his experience doesn't matter?

(As I said before, it's the industry connections that will make CoinTerra successful at 28nm)

No matter how you slice it I see a company trading at a significant premium to fair value for no perceivable reason.

[Rival]

The perceivable reason is dividends with a track record. 

[Vycid]

The perceivable reason is dividends with a track record.  

Oh boy.

If you think past performance guarantees future return I've got some bad news for you.

There are better ways to evaluate future performance. Even if there is truth to the argument that AM is less risky than its competitors,  it is not enough to explain the massive valuation differential.

AM has released no plans that suggest it will remain particularly competitive.  You are all operating on misguided hope.

I'm bearish on misguided hope.

[candoo]

28nm  will finish the mining game for almost everyone... NO ROI

[glendall]

I'm really looking forward to the announcement of the Gen 2 product. Can't wait. I have high hopes. Hopefully it will come at just the right time....  I'm holding shares long, and hope they rebound to some extent to somewhere close to what they were going for last month...

I got faith in F. C.

[fumble]

I would not characterize it as FC getting his lunch eaten when FC sells out of everything he ever offers. Even with populist suggestions that his products are overpriced. Such remarks lead me to believe that people think FC is losing potential profits on products he has not yet produced, which could be said for pretty much anyone else in the marketplace.

Continuously selling out of everything you produce is a sign of success, not weakness.

Avalon sold out of everything they produced.
BFL sold out almost an entire year of product before shipping.
And the rest of the companies with no product that have collected millions of dollars?

These products would sell out if you encased them in a pile of dog shit. So for this industry, selling out has no weight.

[Ytterbium]

Depends what "do the job well" means.

These guys are going straight for 28nm.

good for them. However friedcat obviously has much more experience with creating chips and devices for bitcoin mining. I would sooner trust Avalon or Asicminer to create new chip before KnCMiner and Cointerra and Hashfast since they have never created bitcoin mining ASIC chip before.

Well, that's ridiculous.  Designing a bitcoin ASIC is easy.  You could do the basic logic layout in an afternoon. The future is figuring out how to make it more space and energy efficient.

[Rival]

These products would sell out if you encased them in a pile of dog shit. So for this industry, selling out has no weight.

Honestly, that was one of the funniest things I have read all week. And a good counter-point as well.