Ethereum: Why do leading ASICs manufacturers sell their chips? [duplicate]

Why leading ASIC manufacturers sell the chipset: look at the industry’s supply chain

In recent years, demand for application-specific integrated circuits (ASIC) has increased as companies such as NVIDIA, AMD and BITMAIN serve a growing market for high-performance computer fans. However, one of the questions that often arises in the cryptographic community is why ASIC manufacturers sell their chips at such an excessive price. In this article, we are immersed in the complexity of supply chains and explores the causes of the ASIC premium pricing.

Rise of high -end mining

One of the primary factors that contributes to ASIC’s high costs is the growing demand for cryptocurrency miners. As more and more people are joining the digital currency revolution, the mining hardware market has increased exponentially. ASIC manufacturers used this trend by making special chips designed specifically for mining activities.

The challenges of energy consumption

Another significant factor in the high price of ASIC is the enormous energy consumption needed to operate. Most ASIC are built with advanced semiconductor technology, which costs costs. Manufacturers need to balance the need to produce efficient and energy efficient hardware with the desire to minimize electricity costs.

In many countries, including those with plenty of solar or wind energy, it is often not possible to use these cheap sources for mining operations. As a result, ASIC manufacturers may have to bring chips from other countries, where electricity is cheaper, further increasing their costs.

The role of mining hardware as a business model

ASIC manufacturers are sold to miners, mainly because of the profitable business model generated by mining. The revenue generated by mining can be significant, especially in large -scale operations. By properly pricing the chips, manufacturers can provide continuous source of income from the sale of these parts.

In addition, mining hardware is often used with other special equipment, such as refrigeration systems and motherboards, which are packed at a separate or higher price. This multi-skill approach creates a complex supply chain that contributes to ASIC’s high costs.

Effect on end users’ prices

For those who want to mince cryptocurrencies such as Ethereum (ETH), the purchase of ASIC can be a significant investment. Although it is true that miners can access cheaper electricity than some users, the cost of buying and maintaining ASIC is still relatively high.

As a result, end -user prices cannot be significantly lower than what they would pay on traditional retail or online markets. In fact, many fans claim that the price of ASIC premium will make it more economical in the long run, as miners can buy larger quantities and operate their hardware by cost-benefit analysis.

Conclusion

Leading ASIC manufacturers’ supply chain is complex, and many factors contribute to the high prices of these components. Although some users may find lower cost alternatives, others are willing to pay a premium because of the individual needs of mining activities.

As demand for high -performance computing continues to grow, it is likely that more companies enter the market and challenge traditional pricing structures. Currently, ASIC manufacturers remain the most expensive parts of the block.

Update:

Duplicated article was requested, so I copied and paste the original request to this answer:

“I understand that some people have access to cheaper electricity than others. But why not just open the mining facilities in the world that offers the lowest cost structure?