Chip Maker TSMC Reports 'Big Drop' in Crypto Mining Revenue

Chip-making giant Taiwan Semiconductor Manufacturing Company has reported a slump in its crypto mining business revenue for last year.

The firm announced its Q4 2018 financial results and also published an earnings call transcript on Thursday, providing revenue details across business segments.

In the transcript, TSMC's CEO and vice chairman C. C. Wei said that the firm's HPC segment was down in 2018 on a year-on-year basis, when its cryptocurrency mining business was included.

"Cryptocurrency is a big drop from 2018 to 2019. So if we put the cryptocurrency together in the HPC, it's a big drop. It's almost a double-digit."

TSMC did not provide specific figures for its crypto mining business in the transcript, because "It belongs to one of the big customers," possibly a reference to crypto mining giant Bitmain as it remains the firm's primary customer.

Nearly 60 percent of Bitmain's total chip supply came from TSMC in 2017 and the first half of 2018, according to its initial public offering application filed.

TSMC also witnessed slower demand for crypto miners in Q4 2018, which resulted in inventory build-up.

"You can imagine that cryptocurrencies mining, they dropped quite a lot," Wei said, adding: "I will say it's more due to the sudden drop in the demand rather than there's some hidden inventory that we cannot see."

On the outlook for its crypto mining business in 2019, Wei said that the firm can't provide a percentage forecast because the sector is "Volatile."

For this quarter, TSMC has cut its revenue estimation to $7.3 billion-$7.4 billion, as the firm expects its business will be "Dampened by the overall weakening of the macroeconomic outlook, mobile product seasonality, and high levels of inventory in the semiconductor supply chain," according to Ho. Computer processors image via Shutterstock.