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Crypto Mining Demand Drives Investors Of TSMC To Propel Its Shares To Record High

Crypto Mining Demand Drives Investors Of TSMC To Propel Its Shares To Record High
There has been growing global demand for powerful semiconductors that are put to use for mining of cryptocurrencies and this trend has driven the results of Taiwan Semiconductor Manufacturing Co. (TMSC) and prompted the company to report its quarterly results ahead of expectations. This resulted in its share prices rising to an all-time high.  TMSC is the main chip supplier for Apple Inc.  
Fisnihing off at NT$255.50, the shares of the company ended at a 2.8 per cent higher value. It is understood that investors have complete faith in TSMC’s capacity to make the most of the boom in cryptocurrency mining which has been led by the meteoric rise of 1,400 per cent in the value of bitcoin. This rise in bitcoin has also resulted in the explosive growth in the shares of companies related to the cryptocurrency boom such as those of designers from Nvidia Corp. and Advanced Devices Inc.
In 2018, the company is anticipating a growth in revenue of 10 to 15 per cent which would be driven by autos, Internet of Things and high-performance computing, said TSMC founder Morris Chang. He is lasted to hand over the reins of the company to two assistants this year. 
That forecast “is a hint that, given its technological lead, TSMC can continue to gain market share this year,” Jinyuan Lv and Simon Lu, analysts for JihSun Securities, wrote on Friday. “Its main growth in 2018 will come from high-performance computing” and other areas.
Cryptocurrency mining is the process that involves complex calculations for solving complex equations that results in digital coins being awarded to the problem solver and this process requires great processing power of the computers. Such processing power is delivered by the types of chips and semiconductors that are made by TSMC for companies like Nvidia or AMD.
The crypto-mining segment could become the fastest-growing segment of the company and could potentially provide as much as one tenth of the total revenues to be generated by the Taiwanese company in 2018, say some analysts.
This boost in crypto currency mining is very timely for companies like TSMC because there is shrinking demand for chips form Chinese smartphone makers and shrinking expectations over the shipments for iPhone X. The revenues forecast by TSMC was lower than the expectations of the market for the next year.
The China Academy of Information and Communications Technology has noted that there has been a decline of almost 12 per cent in the total shipment of smartphones from China in 2017 because of drop in demand from the world’s biggest smartphone market as it approaches a saturation point.  But fast-growing brands like Huawei could be the ones form whom TSMC may get more orders. Huawei’s chips are designed by the company itself and it is estimated that the company might look at companies like TSMC for mass production of the chips.   
While there is a rising question mark about the 7-nanometer chip production technology which still remains untested, the Taiwanese company is all set to get into this chip production starting June this year. But there could be larger problems facing TSMC because of its growing dependency on the crypto currency mining segment where as there are growing concerns about the virtual currencies and as countries like China and South Korea are contemplating putting a curb on the trading of such virtual currencies due to financial risks

Christopher J. Mitchell

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