Three major Chinese Bitcoin mining machine manufacturers are establishing production bases in the United States to resist Trump tariffs

Reuters Shanghai/Singapore, June 18 - As U.S. President Trump’s tariff war reshapes the cryptocurrency supply chain, the world’s three best-selling Bitcoin mining machine manufacturers – all originating from China – are establishing production bases in the United States. Bitmain, Canaan, and Bit Micro are the three companies that manufacture over 90% of the world’s mining machines, which are essentially computers specifically designed for digital computations to produce Bitcoin. Establishing a base in the U.S. can exempt them from tariffs but may provoke U.S. security concerns regarding China in areas such as chip manufacturing and energy security. Guang Yang, Chief Technology Officer of the crypto technology provider Conflux Network, stated: “The China-U.S. trade war is triggering structural changes in the Bitcoin supply chain, rather than superficial changes.” Additionally, Yang mentioned that for U.S. companies, “this is not just a tariff issue. It is a strategic pivot towards ‘politically acceptable’ hardware sources.” Bitmain is the largest of the three companies by sales. The company began producing mining machines in the U.S. last December as a “strategic move” in response to Trump winning the presidential election. Canaan executive Leo Wang told Reuters that Canaan has started trial production in the U.S. to avoid tariffs following Trump’s announcement of a liberation day tax on April 2. He said this initiative is exploratory, as the turbulent tariff situation hinders significant investment. Ranked third, Bit Micro stated in a release that the company is “actively implementing a localization strategy in the U.S. to avoid the impact of tariffs.” Analysts estimate that the industry dominated by these three players will be valued at $12 billion by 2028. It is the upstream of a business chain that extends to the energy-intensive Bitcoin mining process, supporting IT infrastructure, and trading platforms. U.S. competitor Auradine has been lobbying to restrict Chinese supplies to stimulate hardware competition. Auradine is backed by the market’s largest Bitcoin miner, MARA Holdings (MARA.O). Auradine Chief Strategy Officer Sanjay Gupta said: “While over 30% of Bitcoin mining activity occurs in North America, over 90% of mining hardware comes from China, which means there is a severe imbalance in regional supply and demand.” According to consulting firm Frost & Sullivan, as of December 2023, the top three companies hold a 95.4% share of the hardware market by computing power. Gupta noted that regarding Chinese mining machines, “hundreds of thousands of mining machines connected to the U.S. power grid” pose a security risk. Canaan’s Leo Wang stated that mining machines do not threaten security because “they are useless without application in Bitcoin mining.” However, he mentioned that manufacturers may suffer “collateral damage” due to U.S. restrictions on selling high-tech products to Chinese companies. Bitmain did not respond to requests for comment. Kadan Stadlemann, Chief Technology Officer of the cryptocurrency platform Komodo, said that while Chinese drilling machine manufacturers may open shops in the U.S., in the short term, U.S. Bitcoin miners will still purchase mining machines from China and will be impacted by rising import costs He said: "But this is not to harm the industry, but to force the industry to make the changes it should have made long ago."