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It's been years since the crypto boom - why hasn't production ramped up accordingly? Or are manufacturers waiting forever until it blows over? Because that may

by iqanq 5y ago

It's been years since the crypto boom - why hasn't production ramped up accordingly? Or are manufacturers waiting forever until it blows over? Because that may never happen.

kzrdude 5y ago
Exponential growth outgrows any supply, so that's a possibility
groundhogday3 5y ago
I've read that takes 2 years to get a new semi-conductor fab up and running. While demand for GPUs has skyrocketed not only in crypto but in other areas. Couple that with us going into 2 years of global lockdowns and subsequent supply disruptions have probably exacerbated the situation greatly.
- wayoutthere 5y ago
  It takes two years under normal circumstances; from what I understand backlogs for the lithography equipment are a huge bottleneck in the industry since there are only a few companies that make such specialized machines. They were already backordered for years pre-pandemic, with most of those getting pushed out because of supply constraint issues. We’re never going to return to the level of industrial output pre-Covid. There are a dozen high-likelihood scenarios down the pipe in the 2020s (Russia, China/Taiwan, climate drought / famine, etc) that will continue holding global productivity down. We’re looking at global stagflation for most of the rest of our lives as a result, meaning crypto is a good hedge. NVidia just needs to start pricing its top-tier GPUs for crypto farms, then refurbishing the last generation for consumers when the crypto farms upgrade.
  - tsimionescu 5y ago
    If Ethereum moves to PoS, half the crypto GPU market goes poof in an instant. Not a good thing to hedge more chip fabs on, I would bet.
    - freemint 5y ago
      It will move from one to another coin and profitability will decrease slightly unless supply induces demand.
mastax 5y ago
Last crypto boom crashed leaving manufacturers high and dry. Nvidia had a 9-figure write-off IIRC.
- lostmsu 5y ago
  Is there any good article on that topic?
michaelt 5y ago
Maybe you've heard of global supply chain shortages, covering all manner of chips and other components? And a pandemic producing sudden changes in demand, as Meanwhile, mining hardware demand depends on cryptocurrency prices, which go up and down like a yoyo. Only a food would invest billions in a new chip plant when demand might have collapsed by the time it's finished.
- deleted 5y ago
  [deleted]
ThrustVectoring 5y ago
Cryptocurrency was and is volatile enough that the correct play is to not build out long-term capacity for what very well could be a flash-in-the-pan phenomenon.
MeinBlutIstBlau 5y ago
zepto 5y ago
You are basically advising them to be crypto bulls.
rainsford 5y ago
Production of something that complex isn't trivial or quick to ramp up, nor is there an unlimited production ceiling. And that's a problem, because there is effectively an unlimited demand for cryptocurrency mining equipment compared to other GPU markets. I might buy the latest GPU to play PC games at max detail. But there's no increase in value in me buying 20 GPUs so there's effectively a cap on how many GPUs the gaming market will demand. Same goes for other use-cases like scientific computing. In those cases ore GPUs do allow them to solve harder problems or finish calculations faster, but buying more GPUs is more expensive so eventually scientists hit the limits on their budgets. Cryptocurrency mining is different though since it provides a direct path to turning more computing power into more income. As long as the marginal costs to mine on a GPU are below the expected return and the payback time for the fixed cost of buying the GPU in the first place isn't too long, it nearly always makes sense to buy more GPUs. To put it another way, if it makes economic sense for me to mine on 1 GPU, it makes sense for me to mine with 10, or 100, or 1000. In fact it probably makes more sense to mine with more GPUs since there are economies of scale involved. And since miners are more concerned with their marginal costs than the fixed costs, even huge increases in GPU prices don't alter their behavior much. As long as you're making money running a card, who cares if the payoff time for it increases a few months?
LegitShady 5y ago
everyone is competing for the fastest TMSC silicon and it takes longer than the amount of time so far to decide to build new capacity and then build it and then make products.
rixed 5y ago
Isn't the complexity of the hash challenge designed to match whatever production of computing gears in value?

by iqanq 5y ago

It's been years since the crypto boom - why hasn't production ramped up accordingly? Or are manufacturers waiting forever until it blows over? Because that may never happen.

kzrdude 5y ago

Exponential growth outgrows any supply, so that's a possibility

groundhogday3 5y ago

I've read that takes 2 years to get a new semi-conductor fab up and running. While demand for GPUs has skyrocketed not only in crypto but in other areas. Couple that with us going into 2 years of global lockdowns and subsequent supply disruptions have probably exacerbated the situation greatly.

wayoutthere 5y ago
It takes two years under normal circumstances; from what I understand backlogs for the lithography equipment are a huge bottleneck in the industry since there are only a few companies that make such specialized machines. They were already backordered for years pre-pandemic, with most of those getting pushed out because of supply constraint issues. We’re never going to return to the level of industrial output pre-Covid. There are a dozen high-likelihood scenarios down the pipe in the 2020s (Russia, China/Taiwan, climate drought / famine, etc) that will continue holding global productivity down. We’re looking at global stagflation for most of the rest of our lives as a result, meaning crypto is a good hedge. NVidia just needs to start pricing its top-tier GPUs for crypto farms, then refurbishing the last generation for consumers when the crypto farms upgrade.
- tsimionescu 5y ago
  If Ethereum moves to PoS, half the crypto GPU market goes poof in an instant. Not a good thing to hedge more chip fabs on, I would bet.
  - freemint 5y ago
    It will move from one to another coin and profitability will decrease slightly unless supply induces demand.

mastax 5y ago

Last crypto boom crashed leaving manufacturers high and dry. Nvidia had a 9-figure write-off IIRC.

lostmsu 5y ago
Is there any good article on that topic?

michaelt 5y ago

Maybe you've heard of global supply chain shortages, covering all manner of chips and other components? And a pandemic producing sudden changes in demand, as Meanwhile, mining hardware demand depends on cryptocurrency prices, which go up and down like a yoyo. Only a food would invest billions in a new chip plant when demand might have collapsed by the time it's finished.

deleted 5y ago
[deleted]

ThrustVectoring 5y ago

Cryptocurrency was and is volatile enough that the correct play is to not build out long-term capacity for what very well could be a flash-in-the-pan phenomenon.

MeinBlutIstBlau 5y ago

zepto 5y ago

You are basically advising them to be crypto bulls.

rainsford 5y ago

Production of something that complex isn't trivial or quick to ramp up, nor is there an unlimited production ceiling. And that's a problem, because there is effectively an unlimited demand for cryptocurrency mining equipment compared to other GPU markets. I might buy the latest GPU to play PC games at max detail. But there's no increase in value in me buying 20 GPUs so there's effectively a cap on how many GPUs the gaming market will demand. Same goes for other use-cases like scientific computing. In those cases ore GPUs do allow them to solve harder problems or finish calculations faster, but buying more GPUs is more expensive so eventually scientists hit the limits on their budgets. Cryptocurrency mining is different though since it provides a direct path to turning more computing power into more income. As long as the marginal costs to mine on a GPU are below the expected return and the payback time for the fixed cost of buying the GPU in the first place isn't too long, it nearly always makes sense to buy more GPUs. To put it another way, if it makes economic sense for me to mine on 1 GPU, it makes sense for me to mine with 10, or 100, or 1000. In fact it probably makes more sense to mine with more GPUs since there are economies of scale involved. And since miners are more concerned with their marginal costs than the fixed costs, even huge increases in GPU prices don't alter their behavior much. As long as you're making money running a card, who cares if the payoff time for it increases a few months?

LegitShady 5y ago

everyone is competing for the fastest TMSC silicon and it takes longer than the amount of time so far to decide to build new capacity and then build it and then make products.

rixed 5y ago

Isn't the complexity of the hash challenge designed to match whatever production of computing gears in value?