Application-specific Integrated Circuits (ASIC) chips form the backbone of Bitcoin (BTC) mining. ASIC machines are created for a single purpose. To collect block rewards, the SHA-256 algorithm is to solve as fast as possible.
They are very good at it. One of the most widely used ASIC machines, the Antminer S19 can create 82 trillion calculations per second. This is 820 times the Milky Way star. The $30 billion ASIC manufacturing market is dominated by Bitmain. According to Theminermag, Chinese companies’ machines power around 80% of Bitcoin’s hashrate.
However, Singapore-based Bitcoin mining company Bitdeer (BTDR) is planning to shake things up with the release of a new ASIC chip architecture. They claim that these new chips can bring about a significant jump in efficiency while increasing transparency in the ASIC manufacturing process.
“The two dominant players (Bitmain and Microbt) are both private companies and are very uncertain,” Bitdeer’s capital markets head and strategic initiative Jeff Laberge told Coindesk in an interview. “They don’t actually engage with the media or give guidance on what they’re doing from an R&D perspective. That makes it very difficult for end buyers to plan.”
“We want our customers to know where we are in the manufacturing process, from a new chip design perspective, what’s in the production cycle,” Laberge said.
Shanon Squires, chief mining officer at Bitcoin Hosting Firm Compass Mining, told Coindesk that increased visibility into ASIC production will help miners plan to ship new hardware and facilitate the growth of Bitcoin’s difficulties. “Bitdeer’s commitment to transparency is fantastic for the mining industry,” she said.
“Canaan discloses annual sales volumes for various mining models, but Bitdeer is taking it a step further by providing more frequent delivery volume updates,” Wolfie Zhao, research director at Theminermag, told Coindesk. “While both are small players in the hardware market, their efforts are sincere in promoting transparency. Hopefully this will encourage incumbents in the larger market to take notes.”
I’m looking for efficiency
The ASIC chip has used almost the same blueprint since 2014. Over the past decade, the biggest increase in ASIC power efficiency has been born at the casting level. Miners have also made changes to their chip designs, but these changes only provide progressive benefits.
Still, progress was enormous. The power efficiency of the first ASIC, Canaan’s Avalon (2013), was 6,000 Joules per Terahash (J/Th). The most efficient machine today on the market, Bitmain’s Antminer S21XP Hydro boasts 12 j/th efficiency.
Bitdeer, listed on Nasdaq, wants to create a whole new architecture for ASICs. “We feel we need to infiltrate what we call a single digit efficiency range,” Laberge said, referring to mining rigs with efficiency below 10 j/Th.
Scaling up using traditional blueprints means gradually using thinner tips. However, thinner means that the chip is likely to be defective, and yield per batch tends to decrease. “You’re also competing with Apple and Nvidia and the world’s biggest companies for the same materials,” says Laberge.
Bitdeer’s Chief Strategy Officer, Haris Basit, leads a team of engineers to create a new framework. Laberge rated that some members of the unit had put together Bitmain’s first ASIC chip in 2014. This chip has become the industry standard for its architecture. (Bitmain did not respond to requests for comment.)
Bitdeer’s research has already been successful. The company’s latest product, the Sealminer A3, achieved a power efficiency of 9.7 j/Th during its performance trial, the company reported Monday. This means that A3s still using traditional ASIC blueprints may obtain the crown of efficiency from the S21XP hydro.
However, the minor seal miner A4, which employs the company’s new chip architecture, is expected to consume 5 j/th. It is probably a big margin for the most efficient ASIC machines on the market.
Compare Bitdeer’s ASIC with the oldest Bitcoin mining rig and get the best market today (Coindesk)
“People have known for a long time that (electric) charging can be recycled with chips, but they have not really understood how to do it in a way that allows for high performance… We’ve cracked the code on how to do this in a very high performance application.”
“In addition to (charging) and draining, we use it several times, four, five, six times. So (a) doing that will improve efficiency by 75-80%,” Basit added.
“Our SealMiner A4 chip uses this technology, but should be applicable to digital chips more generally, particularly highly active digital chips, such as GPUs and signal processing chips.”
Manufacturing chips
Creating ASICS is not easy. Bitdeer’s research team is divided into two units (one in Singapore and one in Silicon Valley), both working on new chip designs. “For such a simple machine, all it takes is to solve the SHA-256 algorithm. The design is very complicated. We have the best engineers in the world working on this,” says Laberge. The company spends around $6-8 million on surveys per quarter.
So far, the company has been offering new products at a fast pace. Bitdeer pushes both the Sealminer A1 and A2 in 2024, and hopes that A3 will enter mass production in the second half of 2025. This states that A4 will need to reach tape-out (final stage of the design process) in the third quarter of the year.
Once the new chip design is confirmed, Bitdeer sends the plan to TSMC. Not only is the world’s largest chipmaker, the Taiwanese company also the most advanced technology level that makes Bitdia’s partnership essential.
“You can’t go to TSMC and say, ‘Hey, I want 100 exahash worth of chips in the next three months.’ “There’s a process that goes through it,” Laberge says. “You come in and ask them what chip allocations they give it based on their priorities.”
Once you have the plan, the TSMC will generate a mask. The mask essentially functions as a template for the chip, like the platen on a printing press. The mask is sent to Bitedeer with a risk chip (a small batch of chips that the company can use to try) to ensure that the design works properly. It’s when the company needs to make changes to its design. In that case, TSMC will make corrections based on Bitdeer’s feedback and send you a new mask with a new risk chip. All this happens at a significant cost. Bitdeer spent $14 million on tape out the A2, and the A3 was even more expensive, Laberge said.
If Bitdeer is happy with the design, the TSMC is mass produced using masks. Laberge compared the wafer to the sheet, each containing hundreds of chips. Technically, masks can be used to create almost unlimited numbers of wafers, but TSMC has finite resources and can only generate a certain number of chips, so companies will compete for them.
According to Laberge, one of the advantages of the A4 design is that it is supposed to facilitate the company’s chip allocation process. “(BASIT) challenged the team to come up with a new architecture that didn’t require TSMC’s latest processes, but they were able to back down a few generations, allowing them to use nodes that are far less demanding.” Semiconductor nodes are essentially a specific version of the company’s chip manufacturing technology. TSMC is constantly building new nodes to improve the process.
It takes about three months for BitDeer to receive the mask and risk tip after first sending the design to TSMC. After that, after giving the foundry a green light for mass production, the company will receive the chip for another three or four months. The chips are sent straight to Bitdeer manufacturing facilities in Asia. From there, it may take 4-8 weeks for the mining rig to be fully built and packaged.
I’m aiming for the top
Despite all the costs incurred during production, some of the capital required for Manufacturing ASIC comes from Bitdeer’s customers.
Miners interested in purchasing Bitdeer ASICs have typically reduced their deposits of 25% to 50% of the total cost of their order. Production cycles tend to average over six to seven months, so it doesn’t take long for a company to recover its funds and make profits.
Building an ASIC also offers benefits to Bitdeer’s own mining operations. Until recently, the company, founded in 2021, focused on its hosting business. That is, other Bitcoin miners provided facilities to place rigs. BitDeer is slowly moving away from its model and expanding its own mining operations along with the ASIC manufacturing sector.
ASIC acquisitions are usually the most expensive part of building a Bitcoin mining operation. These machines usually last for three or four years before new models become obsolete, so Bitcoin mining companies are always trying to win more.
BitDeer not only can significantly reduce these costs by producing its own machines, but also has the option of selling mining rigs to other companies depending on their needs.
Bitdeer aims to run for money to Bitmain and Microbt and disrupt what is called Duopoly in the ASIC market. “We absolutely want to be the top player in the market,” Lalleju said. “I believe we have the skills to do that with the team.”
