Update: Intel provided further comments, which we’ve added in the article below.
Tom’s Hardware broke the news yesterday that Intel would present a new “Bonanza Mine” ASIC chip designed for ultra-low-voltage and energy-efficient Bitcoin mining at the upcoming ISSCC conference, but Intel would neither confirm nor deny if it would make the chip available to customers. Today, Fox Business reports that crypto-mining startup GRIID, which is set to go public for an estimated $3.3 billion on the NYSE in the coming days, has signed a long-term contract with Intel for its “BMZ2” mining ASICs. This means Intel will in fact compete with its own specialized ASICs for Bitcoin mining, opening up a new market that the company hasn’t addressed directly in the past.
GRIID divulged the news via its S-4 filing, which covers its plans to operate three industrial-scale facilities totaling a massive 48 megawatts of power. The company’s filing says that it has contracted with both Bitmain and MicroBT for mining ASICs, but has also “[…] entered into a definitive supply contract with Intel to provide ASICs that we expect to fuel our growth. The initial order will supply units to be delivered in 2022 and GRIID will have access to a significant share of Intel’s future production volumes.”
Bitcoin is typically mined on ASICs, which are specialized processors specifically designed to execute one type of workload. ASICs afford efficiency and performance advantages over more complex types of chips, like CPUs and GPUs, that can perform the same task. As a result, the overwhelming majority of Bitcoin mining occurs on ASICs, with companies like Bitmain providing the specialized silicon to miners at hefty premiums.
Intel sent over the following statement:
“The SHA-256 ASIC referred to in the paper being presented at ISSCC next month was our first-generation product exploration from 2018. The supply agreement released as part of required SEC disclosures from our customer concerns the second-generation ASIC for which we will provide more details soon.” – Intel Spokesperson
The GRIID listing includes several other mentions of the agreement with Intel, saying:
“On September 8, 2021, GRIID entered to a supply agreement (the “Intel Supply Agreement”) pursuant to which GRIID may purchase Intel-designed BZM2 ASICs. The Intel Supply Agreement is for an initial four-year term and will automatically renew thereafter for one period unless either party provides at least 90 days’ notice prior to the end of the initial four-year term. The Intel Supply Agreement provides GRIID with fixed pricing for the BZM2 ASICs for all orders placed prior to May 2023. In addition, subject to certain conditions, GRIID will be entitled to purchase from Intel at least 25% of all qualified Intel-designed ASICs through approximately May 2025.“
The statement refers to the cryptomining ASICs as “BMZ2,” which appears to be the codename for the Bonanza Mine chips, or a variant thereof. [EDIT: This proved to be accurate: Intel tells us that this is the second-gen chip, whereas the first-gen model will be presented at the ISSCC conference] Intel will begin delivering ASICs this year, and GRIID has a guarantee for at least 25% of Intel’s ASIC supply until May of 2025, signifying that this is a long-term four-year contract. Pricing is also locked in until May 2023.
This confirms that Intel is servicing the crypto mining hardware market, an area where it could enjoy quick growth due to its tremendous production capacity, particularly with older nodes like 14nm that are suitable for this class of accelerator. As we covered yesterday, the primary bitcoin ASIC manufacturers, like Bitmain and MicroBT, suffer from long lead times and charge prohibitively high pricing for their chips, largely because they have to rely on third-party foundries to make the chips. Additionally, foundries like TSMC tend to not give these companies preferential status in their fabs due to the uncertainty of the demand and sporadic nature of cryptomining; instead, the fabs prioritize longer-term steady business from bigger chip designers.
On the other hand, Intel controls its own supply chain and has its own production capacity. The emergence of its Bonanza Mine chips gives the company a nice entry point into the lucrative cryptomining market where its old competitors, like AMD and Nvidia, and new competitors, like Bitmain and MicroBT, have dominated. Intel will also not limit the mining performance of its standard GPUs that are coming to market soon, giving it a dual-pronged strategy of ASICs and GPUs for blockchain/cryptomining markets.
Yesterday, Intel confirmed to Tom’s Hardware yesterday that the company has worked on crypto accelerators for years but didn’t share any details about if it would offer the chips to customers. The announcements come after comments from Intel GPU chief Raja Koduri that confirmed the company was working on new silicon for blockchain/cryptocurrency tech, which you can read about here.
Intel will share that information about the new hardware on Wednesday, February 23rd, at 7 am PST at the ISSCC conference. In addition, the presentation will include a video demo of the chip.