What to know:

Application-specific integrated circuit (ASIC) chips form the backbone of the bitcoin (BTC) mining industry. ASIC machines are made for a single purpose: To solve Bitcoin’s SHA-256 algorithm as fast as possible in order to collect block rewards.

They’re extremely good at it. One of the most widely used ASIC machines, the Antminer S19, is capable of making 82 trillion computations per second — 820 times the number of stars in the Milky Way. The $30 billion ASIC manufacturing market is dominated by Bitmain. The Chinese company’s machines power roughly 80% of Bitcoin’s hashrate, according to TheMinerMag.

But Singapore-based bitcoin mining firm Bitdeer (BTDR) intends to shake things up with the release of a new ASIC chip architecture. These new chips could bring a huge jump in efficiency, the company claims, while improving transparency in the ASIC manufacturing process.

“The two dominant players [Bitmain and MicroBT] are both private companies, and very opaque,” Jeff LaBerge, head of capital markets and strategic initiatives at Bitdeer, told CoinDesk in an interview. “They don’t really engage with the media or give any type of guidance about what they’re doing from an R&D standpoint, and that makes it very difficult for end-buyers to plan.”

“We want our customers to know where we’re at in our manufacturing process, what our roadmap is in terms of new chip designs, where we’re at in our production cycles,” LaBerge said.

Shanon Squires, chief mining officer at bitcoin hosting firm Compass Mining, told CoinDesk that increased visibility into ASIC production would help miners plan new hardware shipments and make it easier to predict Bitcoin’s difficulty growth. “Bitdeer’s commitment to transparency is great for the mining industry,” he said.

“While Canaan discloses its annual sales volume for various mining models, Bitdeer takes it a step further by providing more frequent delivery volume updates,” Wolfie Zhao, head of research at TheMinerMag, told CoinDesk. “Although both are smaller players in the hardware market, their efforts show good faith in promoting transparency. Hopefully, this will encourage the larger market incumbents to take note.”

Seeking efficiency

ASIC chips have used mostly the same blueprint since 2014. Over the last decade, the biggest increases in ASIC power efficiency have come at the foundry level, as leading global chipmaker TSMC has refined its manufacturing process. While miners have also made alterations to chip design, such modifications have only brought incremental gains.

Even so, progress has been tremendous. The very first ever ASIC, Canaan’s Avalon (2013) had a power efficiency of 6,000 joules per terahash (J/TH). Bitmain’s Antminer S21XP Hydro, the current most efficient machine on the market, boasts 12 J/TH efficiency.

Bitdeer, which is listed on Nasdaq, wants to create a completely new architecture for its ASICs. “We feel like it’s going to be necessary to break into what we call the single-digit efficiency range,” LaBerge said, referring to mining rigs with less than 10 J/TH in efficiency.

Scaling up with the traditional blueprint means using progressively thinner chips. But thinner means chips are more likely to be defective and yields per batch tend to fall. “You’re also competing with Apple and Nvidia and some of the biggest companies in the world for the same materials,” LaBerge said.

Bitdeer’s Chief Strategy Officer, Haris Basit, is leading a team of engineers to create a new framework. Some members of that team worked on designs found in Bitmain's first ASIC chips back in 2014 — the chips whose architecture became the standard across the industry. (Bitmain did not respond to a request for comment.)

Bitdeer’s research has already had successes. The company’s most recent product, the SEALMINER A3, achieved a power efficiency of 9.7 J/TH during performance trials, the firm reported on Monday. That means the A3 — which still uses the traditional ASIC blueprint — could end up taking the efficiency crown from the S21XP Hydro.

Yet the miner’s SEALMINER A4, which will employ the firm’s new chip architecture, is expected to consume 5 J/TH. It will likely be the most efficient ASIC machine on the market by a significant margin.

  “People have known for a long time that you could recycle [the electric] charge on a chip, but no one's really been able to figure out how to do that in a way that allows for high performance… We've cracked the code on how to do this in a very high performance application,” Basit told the Coin Stories podcast in December.

“Instead of just using [charge] once and discharging it, we use it several times, four, five, six times. So we get [a] 75-80% improvement in efficiency by doing that,” Basit added.

“Our SEALMINER A4 chips will use this technology, but it should also be applicable more generally in digital chips, especially digital chips that are highly active, like GPUs and signal processing chips.”

Manufacturing chips

Making ASICs isn’t easy. Bitdeer’s research team is divided into two units (one in Singapore, another in Silicon Valley) that both work on new chip designs. “For such a simple machine — all it does is solve the SHA-256 algorithm — it’s extremely complicated to design. We’ve got some of the best engineers in the world working on this,” LaBerge said. The company spends approximately $6-8 million on research per quarter.

So far, the firm has been delivering new products at a fast pace. Bitdeer pushed out both the SEALMINER A1 and A2 in 2024 and is expecting the A3 to enter mass production in the latter half of 2025. It says the A4 should reach tape-out (the last stage of its designing process) in the third quarter of the year, with a release likely in late-2025 or early 2026.

When a new chip design is finalized, Bitdeer sends the plans over to TSMC. Not only is the Taiwanese firm the largest chip manufacturer in the world, it’s also the most advanced on a technological level, which makes Bitdeer’s partnership with it crucial.

“You can't just go to TSMC and say, ‘Hey, I want 100 exahash worth of chips in the next three months.’ There's a process for going through that,” LaBerge said. “You go in and ask them for chip allocation, and they'll give that based on priority.”

Once it has the plans in hand, TSMC produces a mask, which essentially functions as a template for chips — like the platen in a printing press. The mask is sent to Bitdeer alongside risk chips (a small batch of chips that the company can use for trials) to make sure the design works properly. If the firm needs any alterations to be made to the design, that’s when it happens. In that case, TSMC makes corrections based on Bitdeer’s feedback and sends over a new mask with new risk chips. All of this happens at significant cost. Bitdeer spent $14 million on the A2’s tape-out and $26 million on the A3's.

When Bitdeer is satisfied with a design, TSMC uses the mask to mass-produce wafers. LaBerge compared wafers to sheets, each containing hundreds of chips. Technically, a mask can be used to create an almost unlimited number of wafers, but TSMC has finite resources and can only produce a certain number of chips, so firms end up competing for them.

One of the advantages of the A4’s design, according to LaBerge, is that it’s supposed to make the firm’s chip allocation process easier. “[Basit] challenged the team to come up with a new architecture that didn’t need to undergo TSMC’s latest processes, but could step back a couple of generations, which would allow us to use a node that is much less in demand,” he said. A semiconductor node is basically a specific version of the firm’s chip manufacturing technology; TSMC is constantly building new nodes in an effort to refine its processes.

It takes roughly three months for Bitdeer to receive its mask and risk chips after first submitting its design to TSMC. Then, it’s another three or four months for the company to receive its chips once it has given the foundry the green light for mass production. The chips are sent straight to Bitdeer’s manufacturing facilities in Asia. From there, it can take four to eight weeks for the mining rigs to be fully built and packaged.

Aiming for the top

Despite all the costs incurred during production, some of the capital required for manufacturing ASICs comes from Bitdeer’s customers.

Miners interested in purchasing Bitdeer’s ASICs typically put down a deposit of 25% to 50% of the total cost of the order. The production cycle tends to average at six to seven months, so it doesn’t take long for the company to recuperate its funds and make a profit.

Building ASICs also creates advantages for Bitdeer’s own mining operations. Up until recently the firm, which was founded in 2021, focused on the hosting business, meaning that it provided facilities for other bitcoin miners to place their rigs. Bitdeer is slowly transitioning out of that model and expanding its own mining operations alongside its ASIC manufacturing arm.

The acquisition of ASICs is typically the most expensive part of building up a bitcoin mining operation. These machines usually only last around three or four years before newer models make them obsolete, so bitcoin mining firms are constantly looking to acquire more.

Not only is Bitdeer able to considerably reduce these costs by producing its own machines, but it also has the option of selling its mining rigs to other firms depending on its needs.

Down the line, Bitdeer aims to give Bitmain and MicroBT a run for their money, and disrupt what LaBerge called the duopoly of the ASIC market. “We want to be the top player in the market, absolutely,” LaBerge said. “We believe we have the team and the technology to do that.”