Application-specific integrated circuit (ASIC) chips form the backbone of Bitcoin (BTC) mining industry. The ASIC machine is for one purpose: to solve Bitcoin’s SHA-256 algorithm as quickly as possible to collect block rewards.
They are very good at it. One of the most widely used ASIC machines, the Antminer S19 is able to perform 82 trillion calculations per second, which is 820 times the number of stars in the Milky Way. The $30 billion ASIC manufacturing market is dominated by Bitmain. The machines of Chinese companies are roughly 80% of Bitcoin hashrateaccording to theminermag.
However, Singapore-based Bitcoin mining company Bit (BTDR) intends to shake with the release of new ASIC chip buildings. The company claims that these new chips could lead to enormous efficiency while increasing transparency in the ASIC manufacturing process.
“The two main players (Bitmain and Microbt) are private companies and are very opaque,” Jeff Laberge, head of capital markets and strategic planning at Bitdeer, told Coindesk in an interview. “From a research and development perspective, they don’t really interact with the media and provide any kind of guidance for what they do, which makes it difficult for end buyers to plan.”
“We want customers to know where we are in the manufacturing process, the roadmap in the new chip design and where we are in the production cycle,” Laberge said.
Shanon Squires, chief mining officer at Bitcoin custody company Compass Mining, told Coindesk that Coindesk’s visibility into ASIC production will help miners plan new hardware shipping and make it easier to predict the difficulty growth of Bitcoin. “Bitel’s commitment to transparency is very useful for the mining industry,” she said.
“While Canaan disclosed annual sales of various mining models, Bitdeer further developed it by providing more frequent updates to deliver volumes,” Wolfie Zhao, head of research at Theminermag, told Coindesk. “While both are smaller players in the hardware market, their efforts have shown sincere confidence in improving transparency. Hopefully this will encourage the attention of larger market incumbents.”
Seeking efficiency
Since 2014, ASIC chips have mainly used the same blueprint. The biggest improvement in ASIC power efficiency over the past decade has been at the casting level, as TSMC, a leading global chip manufacturer, has perfected its manufacturing process. Although miners also made changes to chip designs, the modification only brought about growth benefits.
Even so, the progress is still huge. Canaan’s Avalon (2013) is the first ASIC ever, with a power of 6,000 Joules per Terahash (J/Th). Bitmain’s Antminer S21XP Hydro is the most efficient machine on the market with 12 j/th efficiency.
Bitdeer listed in Nasdaq hopes to create a completely new architecture for its ASIC. “We felt the need to break into what we called the singular efficiency range,” Laberge refers to mining rigs with less than 10 j/th efficiency.
Extending with traditional blueprints means using gradually thinner chips. But thinner means that the chip is more likely to have defects, and the trend per batch tends to decline. “You are also competing with Apple and Nvidia and some of the largest companies in the world for the same material,” Laberge said.
Haris Basit, chief strategy officer at Bitdeer, leads a team of engineers to create a new framework. Laberge attributes some members of the department to Bitmain’s first ASIC chips in 2014 – the construction of these chips became the standard across the industry. (Bitmain did not respond to a request for comment.)
Bitdeer’s research has been successful. The company’s latest product, Sealminer A3, achieved a power efficiency of 9.7 j/t during performance trials Report on Monday. This means that the A3 (still using the traditional ASIC blueprint) may eventually take the efficiency crown from the S21XP Hydro.
However, the miner sealer A4 that will adopt the company’s new chip building is expected to consume 5 j/th. It is probably the most efficient ASIC machine on the market.
“People have long known that you can recycle (electric) on chips, but no one is really able to figure out how to do this in a way that allows for high performance… We’ve divided the code on how to do this in very high performance applications, “Basit” Tell Coin Story Podcast in December.
“We not only have to use (charge) and discharge, but also a few times, four, five, six times. So by doing so, we can improve (a) 75-80% efficiency,” Basit added.
“Our Sealminer A4 chip will use this technology, but it should also be more generally applicable to digital chips, especially highly active digital chips such as GPUs and signal processing chips.”
Making chips
Making an ASIC is not easy. Bitdeer’s research team is divided into two units for new chip designs (one in Singapore and the other in Silicon Valley). “For such a simple machine – all it has to do is solve the SHA-256 algorithm – the design is very complex. We have some of the best engineers in the world working on this for that.” The company spends about $60,000-80,000 per quarter on research.
So far, the company has been delivering new products quickly. Bitdeer launched the Sealminer A1 and A2 in 2024, and the A3 is expected to be mass-produced in the second half of 2025. It said the A4 should reach the tape (the final stage of its design process) in the third quarter of this year and could be released in late 2025 or early 2026.
When the new chip design is finalized, Bitdeer will send the plan to TSMC. Taiwan companies are not only the world’s largest chip manufacturer, but also the most technologically advanced, making Bitdeer’s partnership with IT crucial.
“You can’t just go to TSMC and say, ‘Hey, I want 100 chips in the next three months.” There’s a process that can go through. “You go in and ask them to do the chip allocation, and they will give this based on priority. ”
Once the plan is owned, the TSMC produces a mask that is essentially a chip template, such as a slat in a printing press. The mask is sent to Bitdeer along with the risk chip (a small portion of the chips the company can use to test) to ensure the design works properly. If the company needs to make any changes to the design, that’s what it happens. In this case, TSMC makes corrections based on Bitdeer’s feedback and sends it on a new mask with the new risk chip. All of this happens at a huge cost. Laberge said Bitdeer spent $14 million on tapes on A2, and the A3 was even more expensive.
When Bitdeer is satisfied with the design, TSMC uses masks to mass-produce wafers. Laberge compared the grains to the sheets, each sheet containing hundreds of chips. Technically, masks can be used to create nearly infinite chips, but TSMCs have limited resources to produce only a certain number of chips, so companies will eventually compete for them.
According to Laberge, one of the advantages of the A4 design is that it should make the company’s chip distribution process easier. “(Basic) challenged the team to come up with a new architecture that doesn’t require the latest process of TSMC, but can take a few generations back, which will allow us to use a node that requires much less,” he said. The semiconductor node is basically a specific version of the company’s chip manufacturing technology. TSMC continuously builds new nodes to perfect its processes.
After Bitdeer first submitted its design to TSMC, it took about three months to get the mask and risk chip. Then, once the foundry was given a green light for mass production, the company was another three or four months of bargaining chips. These chips are sent directly to Asian bitmap manufacturing facilities. From there, a fully built and packaged mining rig can take four to eight weeks.
Aim at the top
Despite all the expenses incurred during the production process, some of the capital needed to manufacture the ASIC comes from Bitdeer’s customers.
Miners interested in purchasing Bitdeer’s ASIC usually deposits between 25% and 50% of the total cost of the order. Production cycles tend to be averaged between six and seven months, so companies can quickly recover their funds and make profits.
Establishing ASIC also creates advantages for Bitdeer’s own mining business. Until recently, the company was founded in 2021, focusing on the custody business, which means it provides rig facilities for other bitcoin miners. Bitdeer is slowly transitioning the model and expanding its own mining operations with the ASIC manufacturing division.
Acquisition of ASIC is often the most expensive part of building a Bitcoin mining business. These machines usually last only three to four years to make them obsolete, so Bitcoin mining companies are constantly seeking more acquisitions.
Not only can Bitdeer greatly reduce these costs by producing its own machines, but it also has the option of selling its mining rigs to other companies, depending on their needs.
Online, Bitdeer’s goal is to make money for Bitmain and Microbt and to undermine what Laberge calls the duopoly of the ASIC market. “We definitely want to be the top player in the market,” Lawler said. “We believe we have teams and technology to do this.”
