Miners Scramble For Semiconductors As Shortages Drive Rig Prices Up

A semiconductor shortage has been going on – to various degrees – for over a year at this point, affecting all industries dependent on them. Ford has shut down some plants, and the production of computer components has also been facing constraints. GPUs and the like are in short supply – and mining rigs are no exception.

Inventory Sold Out Nearly An Year In Advance

Bitmain – one of the leading cryptocurrency mining rig companies in the industry – has had their entire inventory sold out all the way up to August 2021.

The last remaining rigs have also greatly increased in price. For instance, the Bitmain Antminer S19 had a going price of $1897 per unit. The price has since skyrocketed and an Antminer S19 will now set you back $2767.

According to Alex Ao – the vice president of a semiconductor manufacturer named Innosilicon – there are simply not enough chips lying around to meet the growing demand after a great year for Bitcoin.

“There are not enough chips to support the production of mining rigs. These capacity expansions occurred even as Bitcoin went through its quadrennial halving that saw block reward subsidies cut in half. Thus, while China still dominates the global hash rate distribution, North American mining interests are reportedly “squeezing supply to China.”

The unfortunate side result of this shortage is that small-time cryptocurrency miners are being slowly pushed out of the market, as they are left without mining rigs to purchase in the wake of massive industrial-scale mining farms located in China and North America.

Big crypto mining farms are also facing their share of problems, however – for instance, authorities in the Chinese province of Yunnan ordered electricity producers to cut off the power supply to crypto miners.

What consequences the mining rig shortage may have on cryptocurrency prices remains to be seen – for instance, it may persuade more crypto users to HODL, knowing that the increased rarity of new blocks mined may drive the price of cryptocurrencies up in value.