Cryptocurrency mining goliath and ASIC chip developer Bitmain is planning to set up 200,000 units of mining equipment in China that would take advantage of low-cost hydroelectric power. This news comes via a CoinDesk report published earlier today.
A source with knowledge of the matter reportedly informed CoinDesk that Bitmain has plans to install 200,000 of its own mining machines to capitalize on expected decrease hydroelectric power costs in southwestern China this summer during its rainy season. The equipment has an estimated value of about $80 million to $100 million.
Bitmain has apparently already begun negotiating deals with local mining farms to host its equipment, specifically its new machines — the AntMiner S11 and S15 — as well as some of its older models like the AntMiner S9i/j. Still, as the report notes, the majority of Bitmain’s revenue comes from sales of its equipment, and not mining; however, with sales having slowed in the ongoing bear market, doubling down on its mining capabilities seems like a shrewd move, especially given its forthcoming access to cheap energy, and Bitcoin’s slowly recovering price.
This news comes on the heels of Bitmain’s announcement last December that it would close its development center in Israel and fire local employees, and its decision in January to reduce its operations in the Netherlands.
In a statement, head of Israeli branch and Bitmain vice president of international sales and marketing tied the move to the crypto market’s decline:
“The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”
With Bitcoin trading where it is, in the $4,000 range, the company has found it difficult to turn a profit. In January, the firm also suspended its mining operations in Rockdale, Texas, laying off all employees except two engineers and the director of human relations.
As for the closure of its operations in the Netherlands, Bitmain said that the move was part of its longer-term roadmap of cost-saving measures. Bitmail reportedly suffered as a result of decreased profitability of Bitcoin mining in recent months, with Bitcoin (BTC) currently circling $4,000.
Also in January, news broke that Bitmain had reportedly suspended its mining operations in Rockdale, in the United States state of Texas. Steve Young, a Milam County Judge, issued a statement reporting that all Bitmain employees but two engineers and the director of human relations had been laid off, and all operations had been suspended.