Bitmain Mined Crypto for Its Own Benefits on Devices Owned by the Customers

AMD is an interesting addition on the TSMC list since they moved over from GlobalFoundries after they closed the 7nm plants. Qualcomm is also a …

Cryptomining company Bitmain is facing several troubles at once. Thecompany is facing multiple lawsuits and had to sell its latestAntminer S15 at a loss to help pay off its debt.

Blockstream CSO Samson Chow talked about the company’s problems in a series of tweets; he said,

“1/ Bitmain already facing multiple lawsuits and more being filed. Their assembly, component, production, and repair companies are unpaid and losing patience. It seems Bitmain is deep in debt and trying to raise new capital from unwitting investors to keep going.”

Selling Antminers at a loss

Thecompany sold the latest iteration of its mining hardware- theAntminer S15 at a loss. The units were sold for 30% below cost. Chownoted that the cost basis for the 7nm chips is 3x of the 16nm chips.Now, several questions are being posted about the S17 50 TH miner.

There are rumors that the company is cherry picking the units to show their potential investors and get some funding. The yield for their 7nm chips is bad, and only close to 60% are viable. Chow notes that Bitmain could have only made about a 1000 S15 miners. This shows grim times for the company which is currently facing a cash crunch.

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Bitmain Inner Mongolia Virtual Currency Farm. Reportedly operating 25.000 ASIC devicdes mining Bitcoin and other cryptocurrencies around the clock every day. Court document image.
Bitmain Inner Mongolia Virtual Currency Farm. Reportedly operating 25.000 ASIC devicdes mining Bitcoin and other cryptocurrencies around the clock every day. Court document image.

The 7nm issue continues

TSMC also says that they have sold their entire 7nm chips to companies like Apple, Qualcomm, Nvidia, AMD, and Huawei. AMD is an interesting addition on the TSMC list since they moved over from GlobalFoundries after they closed the 7nm plants. Qualcomm is also a new switchover to TSMC. They were earlier working with Apple. There is no way for Bitmain to work here, even if their chip design is good. TSMC’s capacity is full, making 7nm a lost cause for the Chinese mining company.

Bitmain’s supplies are going unpaid, and their lawsuits will keep the company busy in the meanwhile. One of them was filed in November last year which sought $5 million in damages. According to the documents filed in the North District Court of California, the company mined crypto for its own benefits on devices owned by the customers.

Law suit filed by Bitmain's customer.
Lawsuit filed by Bitmain’s customer.

The lead plaintiff of the lawsuit Gor Gevorkyan, from Los Angeles County dragged the China and US-based entities of the company saying that the lengthy ASIC setup process that their devices need allows the company to benefit off the customers.

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TSMC sees February revenues fall 22 per cent.

To be fair, TSMC did predict that things were going to get worse. It had estimated previously first-quarter revenues at US$7-7.1 billion, a downward …

TSMC disclosed its cumulative 2019 revenues through February decreased 3.7 per cent from a year earlier.

To be fair, TSMC did predict that things were going to get worse. It had estimated previously first-quarter revenues at US$7-7.1 billion, a downward revision from its original estimation of US$7.3-7.4 billion.

At the time it said that its downward revision was due to a larger-than-expected number of wafers affected by defective photoresist materials which disrupted an advanced production site for Nvidia, Huawei Technologies and other big semiconductor companies.

TSMC said the production problems will cut revenue by as much as $550 million for the quarter ending in March. The company now expects revenue of $7 billion to $7.1 billion — the lowest since the first quarter of 2016 — compared with the previous projection of up to $7.4 billion.

TSMC’s senior corporate communications director Elizabeth Sun said at the time: “To ensure the quality of our wafers delivered to customers, we have decided to scrap a higher number of wafers than our earlier estimate … and that resulted in our revision of the financial projection.”

The trouble discovered by TSMC on 19 January involved a photoresist chemical — a crucial material for etching circuits onto silicon wafers. The defective material caused a deviation from the normal yield rate in wafer production.

Shin-Etsu Chemical and JSR of Japan supplied the material to TSMC. The chipmaker remained silent about the source of the defective chemical.

The incident was the second production disruption linked to suppliers in less than six months for the key provider of Apple core processor chips. TSMC has already seen its bottom line kicked by poor on iPhone sales.

The production site in the southern Taiwanese city of Tainan, dubbed Fab 14B, supplies chips to customers including Apple, Huawei semiconductor arm HiSilicon Technologies, Nvidia, MediaTek, Xilinx, Broadcom and AMD.

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Apple Setting Up Shop Close to Qualcomm

You might recall that Broadcom announced that it would be seeing its … (Broadcom doesn’t build cellular modems, but it builds chips that are part of a …

The chorus of reports that Apple (NASDAQ: AAPL) is planning to build its own cellular modem chips has continued to grow louder, particularly as the bitter legal battle between cellular modem giant Qualcomm (NASDAQ: QCOM) and Apple has dragged on.

Now, according to Apple (via 9to5Mac), the company is planning on opening up an engineering facility in San Diego — the city where Qualcomm’s headquarters is located. That facility, according to the company, is set to employ 1,200 employees.

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Given that Apple is apparently planning to build its own cellular modems, it’s little wonder that the company would set up shop in a town jam-packed with wireless chip engineers.

Here’s what this means for Qualcomm — the leading maker of cellular modems — as well as other modem makers that have development efforts in the city.

The cost of talent is set to rise

The talent market is like any other — the price of talent is substantially guided by supply/demand dynamics. The more demand there is for a given supply, the higher the price of that talent.

Apple developing its own cellular modems is certainly going to increase the demand for that talent.

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What this is likely to mean, then, is that modem development — at least in San Diego — is set to become more expensive. Apple, despite its recent disappointing financial performance, is still hugely successful and can afford to write the big checks required to lure in some of the industry’s best engineers.

Since Qualcomm is the leading developer of cellular modems in terms of both technology prowess as well as in raw industrywide unit share, it’s natural to expect that Apple is going to be extremely interested in recruiting some Qualcomm talent to bring its modems to life.

This isn’t likely to be good for Qualcomm’s financial performance. At best, the company might need to give some of its best engineers significant raises to match or exceed offers that Apple might put out, increasing operating expenses. In a less optimistic scenario, Qualcomm might see many of its top engineers leave, which could weaken the company’s ability to continue to crank out great products.

The talent situation is already tight

You might recall that Broadcom announced that it would be seeing its stock-based compensation expenses rise by more than 70% in its current fiscal year as it implements a “special broad-based multiyear equity award program” in a bid to retain the talent that it has in a “tight labor market.”

Apple building its own wireless chips is only going to exacerbate that issue.

Moreover, while I’ve focused primarily on Qualcomm as a company that could get hurt in this potential talent war, it is by no means the only company that might feel the pain. Apple could very well nab talent from other companies that build great wireless chips, like Broadcom. (Broadcom doesn’t build cellular modems, but it builds chips that are part of a smartphone’s cellular subsystem.)

Qualcomm’s main rival in merchant mobile applications processor market, MediaTek, also has an office in San Diego, for example.

Investor takeaway

The news that Apple is setting up an engineering facility in San Diego lends further credence to the reports that Apple is, in fact, building its own cellular modem technology. It also means that the cost of engineering talent may be set to rise, driving up operating expenses for wireless chip companies that operate in the area.

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Dialog Semi to buy Silicon Motion’s IoT business for $45 mn

Dialog Semiconductor is set to acquire Silicon Motion’s mobile communications business for $45 million in cash, expanding its presence in the market …

Dialog Semiconductor is set to acquire Silicon Motion’s mobile communications business for $45 million in cash, expanding its presence in the market for low-power connected devices.

Dialog Semiconductor iW656Dialog, which already has a strong Bluetooth franchise, said it would buy Silicon Motion’s FCI product line which includes ultra-low-power, battery-operated Wi-Fi products used in the Internet of Things (IoT).

CEO Jalal Bagherli has highlighted the need to extend Dialog’s connectivity offering into new channels. Wi-Fi-enabled sensors that can be monitored remotely, with a battery life extending for years, are one such opportunity.

Dialog will take on a 100-strong engineering team based in South Korea as part of the deal to buy FCI, which had 2018 revenue of $30 million. The transaction is expected to complete this year.

Dialog Semiconductor CEO Jalal Bagherli earlier the chipset designer is targeting growth opportunities from home healthcare to gaming consoles following a $600 million deal to cut its exposure to Apple.

The Anglo-German chip designer struck the deal in October with Apple, which accounts for three-quarters of its revenue, helping it to weather an iPhone sales downturn better than other suppliers to the smartphone maker.

Dialog said the business that will remain after it transfers a team of programmers and patents to Apple should show strong growth in 2019.

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Taiwan Semiconductor (TSM) Valuation Rose While Oaktree Capital Management LP Boosted …

Some Historical TSM News: 16/03/2018 – TSMC 2330.TW SAYS IT ORDERS FACILITY AND CONSTRUCTION FOR T$301 MLN; 01/05/2018 – Arm …

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Oaktree Capital Management Lp increased its stake in Taiwan Semiconductor (TSM) by 6.14% based on its latest 2018Q4 regulatory filing with the SEC. Oaktree Capital Management Lp bought 222,768 shares as the company’s stock rose 3.00% with the market. The hedge fund held 3.85M shares of the semiconductors company at the end of 2018Q4, valued at $142.05 million, up from 3.63M at the end of the previous reported quarter. Oaktree Capital Management Lp who had been investing in Taiwan Semiconductor for a number of months, seems to be bullish on the $197.74 billion market cap company. The stock decreased 0.59% or $0.23 during the last trading session, reaching $38.79. About 4.43 million shares traded. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has declined 8.36% since March 7, 2018 and is downtrending. It has underperformed by 12.73% the S&P500. Some Historical TSM News: 16/03/2018 – TSMC 2330.TW SAYS IT ORDERS FACILITY AND CONSTRUCTION FOR T$301 MLN; 01/05/2018 – Arm Physical IP to Accelerate Mainstream Mobile and IoT SoC Designs on TSMC 22nm ULP/ULL Platform; 19/04/2018 – TSMC is the world’s largest semiconductor foundry company and manufactures chips for Apple and its component suppliers; 28/03/2018 – TAIPEI — U.S. senior trade official met with Chairman Morris Chang of Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, and other industry executives this week in Taiwan to foster greater collaboration, according to a source familiar with the matter and a local media report; 09/04/2018 – TSMC to cut 1 seat in board of directors after Morris Chang retires in June, sources say; 01/05/2018 – Mentor enhances tool portfolio for TSMC 5nm FinFET and 7nm FinFET Plus processes and Wafer-on-Wafer stacking technology; 26/03/2018 – RENESAS ELECTRONICS TO OUTSOURCE ALL OF ITS AUTOMOTIVE MICROCONTROLLER PRODUCTION TO TAIWAN SEMICONDUCTOR MANUFACTURING CO – NIKKEI; 01/05/2018 – Cadence Collaborates With TSMC to Advance 5nm and 7nm+ Mobile and HPC Design Innovation; 09/04/2018 – Brightwire: TSMC to cut 1 seat in board of directors after Morris Chang retires in June; 26/04/2018 – TSMC 2330.TW SAYS IT ORDERS EQUIPMENT FOR T$856 MLN

Goelzer Investment Management Inc decreased its stake in Apple Inc (AAPL) by 3.31% based on its latest 2018Q4 regulatory filing with the SEC. Goelzer Investment Management Inc sold 2,555 shares as the company’s stock declined 2.81% while stock markets rallied. The institutional investor held 74,684 shares of the computer manufacturing company at the end of 2018Q4, valued at $11.78M, down from 77,239 at the end of the previous reported quarter. Goelzer Investment Management Inc who had been investing in Apple Inc for a number of months, seems to be less bullish one the $822.91B market cap company. The stock decreased 0.58% or $1.01 during the last trading session, reaching $174.52. About 1,784 shares traded. Apple Inc. (NASDAQ:AAPL) has risen 0.49% since March 7, 2018 and is uptrending. It has underperformed by 3.88% the S&P500. Some Historical AAPL News: 01/05/2018 – COOK: SERVICES IS A ‘HUGE OPPORTUNITY’ FOR APPLE; 07/03/2018 – APPLE COMMENTS IN SUPPLIER RESPONSIBILITY REPORT; 13/05/2018 – Apple sows seeds of next market swing; 13/04/2018 – Lawmakers question FBI over San Bernardino suit against Apple; 01/05/2018 – Apple launches $100bn buyback and lifts dividend; 04/04/2018 – New York Post: Eli Apple can start all over; 16/05/2018 – @ashanti joined us on air to discuss the impact of streaming music on platforms such as Spotify, Apple, and Tidal; 30/05/2018 – HealthXL Launches App to Connect the Industry Leaders that are Transforming Modern Health; 02/05/2018 – Apple posted some of its strongest growth in one of its toughest geographic regions: China; 23/04/2018 – IPhone Manufacturers’ Slowing Sales Are a Bad Omen for Apple

More notable recent Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) news were published by: Seekingalpha.com which released: “Taiwan Semiconductor Manufacturing: Still Looking Good For The Long Haul – Seeking Alpha” on October 22, 2018, also Fool.com with their article: “Is Taiwan Semiconductor Under Threat From a Chinese Chipmaker? – Motley Fool” published on February 28, 2019, Benzinga.com published: “Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) – Taiwan Semiconductor Q4 Earnings Preview – Benzinga” on January 16, 2019. More interesting news about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) were released by: Seekingalpha.com and their article: “Taiwan Semiconductor: Risky-Looking Chart But Undervalued Fundamentals – Seeking Alpha” published on December 11, 2018 as well as Finance.Yahoo.com‘s news article titled: “Is Taiwan Semiconductor Mfg. Co. Ltd. (TSM) Going to Burn These Hedge Funds? – Yahoo! Finance News” with publication date: December 09, 2018.

Oaktree Capital Management Lp, which manages about $5.47B US Long portfolio, decreased its stake in Infosys Ltd (NYSE:INFY) by 1.35 million shares to 3.31M shares, valued at $31.50M in 2018Q4, according to the filing. It also reduced its holding in Vale Sa (NYSE:VALE) by 285,756 shares in the quarter, leaving it with 3.02 million shares, and cut its stake in Bank Of America Corp.

Analysts await Apple Inc. (NASDAQ:AAPL) to report earnings on May, 7. They expect $2.38 EPS, down 12.82% or $0.35 from last year’s $2.73 per share. AAPL’s profit will be $11.22 billion for 18.33 P/E if the $2.38 EPS becomes a reality. After $4.18 actual EPS reported by Apple Inc. for the previous quarter, Wall Street now forecasts -43.06% negative EPS growth.

More notable recent Apple Inc. (NASDAQ:AAPL) news were published by: Nasdaq.com which released: “Monday Apple Rumors: AAPL May Not Have a 5G iPhone Until 2020 – Nasdaq” on February 25, 2019, also Benzinga.com with their article: “Apple Inc. (NASDAQ:AAPL), Berkshire Hathaway Inc. (NYSE:BRK-A) – Soft Touch: Home Depot’s Earnings Miss, Caterpillar Downgrade Both Appear To Weigh – Benzinga” published on February 26, 2019, Seekingalpha.com published: “Why Apple’s Bruising Won’t Hurt Emerging Markets – Seeking Alpha” on February 15, 2019. More interesting news about Apple Inc. (NASDAQ:AAPL) were released by: Seekingalpha.com and their article: “Apple: Stress-Valuation – Seeking Alpha” published on February 25, 2019 as well as Seekingalpha.com‘s news article titled: “Cook says Apple will “elevate” retail experience – Seeking Alpha” with publication date: February 06, 2019.

Since November 19, 2018, it had 0 buys, and 2 insider sales for $902,607 activity. Shares for $647,520 were sold by KONDO CHRIS on Monday, November 19.

Apple Inc. (NASDAQ:AAPL) Institutional Positions Chart

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