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Bitmain, a maker of Bitcoin ASICs, halts staff salary payments: Report

source-logo  bitcoinworld.co.in 10 October 2023 07:44, UTC

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The company mentioned encountering challenges in achieving a “positive net cash flow” when making this decision. Bitmain, a manufacturer specializing in Bitcoin application-specific integrated circuits (ASICs), has halted salary disbursements for its employees from September onwards. According to recent local news reports, which cite several Bitmain employees well-versed in the situation, the company has purportedly suspended all “incentives and bonuses” for its workforce and still hasn’t settled compensation outstanding since the previous month.

Furthermore, employees are bracing for a 50% reduction in their base salaries. An alleged communication from Bitmain conveys the following message: “For the month of September, the company has failed to achieve a positive net cash flow, particularly concerning orders for [new] ASICs. Consequently, the Executive Management Team has decided to temporarily withhold salaries for September, with a review slated for after October 7, following the holiday.” Established in Beijing, China, in 2013, Bitmain stands as one of the world’s preeminent manufacturers of Bitcoin mining ASICs, once boasting an estimated 70% market share at its zenith.

The company’s Antminer ASIC series currently leads the industry in hash rate computations for Bitcoin mining. In August, Hive, a Bitcoin mining company, made headlines with its acquisition of 2,000 Bitmain S19 XP ASIC miners for immediate deployment in its mining rigs. These S19XP ASIC miners are priced at $4,653 on Bitmain’s platform. Hive anticipates that following the integration, its mining rigs will generate a combined revenue of $80 per megawatt hour, encompassing both old and non-Bitmain models.

In 2021, Bitmain co-founder Jihan Wu announced the resolution of a year-long ownership dispute with fellow co-founder Micree Zhan.Pursuant to the settlement, Wu stepped down as Bitmain’s chairman and CEO, selling his ownership stake to Zhan for $600 million. At the time, Bitmain had outlined plans for an initial public offering valuing the company at $5 billion by late 2022. These aspirations are believed to have been put on hold due to the persistent bear market conditions.