Why ASIC Manufacturing Is a Geopolitical Flashpoint

ASIC manufacturing is centralized in Taiwan and China, creating a single point of failure for Proof-of-Work blockchains like Bitcoin. This geographic concentration contradicts the decentralization ethos and creates a strategic chokepoint for global compute power.

Control over ASICs is control over consensus. A state actor with manufacturing dominance can launch 51% attacks or enforce blacklists by controlling hardware. This is a more fundamental threat than software-level MEV or governance attacks seen in DeFi.

The US-China tech war directly targets this vulnerability. Export controls on advanced chipmaking equipment from companies like ASML aim to curb China's progress, making TSMC in Taiwan a geopolitical battleground. Every Bitcoin mined is a transaction in this larger conflict.

Evidence: Over 90% of the world's most advanced semiconductors are manufactured by TSMC. For Bitcoin, an estimated 65-75% of hashrate relies on ASICs from Chinese firms like Bitmain and MicroBT.

ASIC manufacturing is centralized. Over 95% of global ASIC production is controlled by TSMC and Samsung, creating a single point of failure for Proof-of-Work networks like Bitcoin and Kaspa.

This creates a hardware veto. A state-level actor can disrupt a blockchain's security by pressuring these foundries, a risk that decentralized software alone cannot mitigate.

Proof-of-Stake is not immune. Validator hardware still relies on the same supply chain, and staking concentration in services like Lido and Coinbase creates analogous political attack vectors.

Evidence: China's 2021 mining ban demonstrated state power over PoW, while the US's TSMC subsidies show the explicit geopolitical value of controlling advanced fabrication.

ASIC manufacturing is centralized. Over 90% of Bitcoin mining ASICs are produced by a handful of Chinese-founded firms like Bitmain and MicroBT, creating a critical single point of failure for global blockchain security.

Control of hardware is control of consensus. Nations that dominate ASIC production, like China, hold implicit leverage over Proof-of-Work networks. This creates a geopolitical attack vector distinct from software-based protocol governance.

The U.S. is responding with industrial policy. The CHIPS Act and export controls on advanced semiconductors to China are not just about CPUs; they are a direct play to re-shore critical infrastructure, including crypto-native hardware.

Evidence: The 2021 Chinese mining ban demonstrated state power, but the real lesson was the resilience of ASIC supply chains—miners relocated, but the machines, still manufactured in China, continued to dictate network hash rate distribution.

ASIC manufacturing is centralized in Taiwan and China, creating a single point of failure for a $1.3 trillion network. This mirrors the geopolitical chokehold on advanced chip fabrication for AI (Nvidia, TSMC) and defense systems.

Controlling hash rate is power. A state actor with dominant ASIC production, like China's Bitmain, possesses a latent capability for a 51% attack or to enforce transaction censorship, a threat model identical to controlling AI model training or satellite jamming tech.

Proof-of-Work is physical. Unlike the software-centric security of Ethereum or Solana, Bitcoin's security is a function of joules and silicon. This creates a hardware arms race where national industrial policy, not just code, determines network sovereignty.

Evidence: Three manufacturers—Bitmain, MicroBT, Canaan—control over 90% of Bitcoin ASIC supply. This concentration exceeds the market share of TSMC in leading-edge logic chips.

ASIC manufacturing is centralized in China, creating a single point of failure. This concentration means a state actor can weaponize supply chains to censor transactions or launch 51% attacks, undermining the censorship-resistance guarantee that defines Bitcoin.

Decentralized mining pools are the counterweight. While hardware production is centralized, the global distribution of hash power through pools like Foundry USA and AntPool creates a geopolitical firewall. No single jurisdiction controls the actual network consensus.

The precedent is hardware bans. China's 2021 mining ban proved that state action can eliminate geographic hash power. A coordinated ASIC export ban would be a more potent attack, making the decentralization of mining pools the last line of defense.

Evidence: Over 50% of Bitcoin's hash rate now operates outside China post-ban, with the U.S. and Kazakhstan as leaders. This rapid geographic redistribution demonstrates the network's resilience when its operational layer (miners) is decentralized, even if its hardware layer is not.

Geographic concentration is a systemic risk. Over 95% of global ASIC production is controlled by Chinese firms like Bitmain and MicroBT, creating a single point of failure for Bitcoin and other PoW chains. This centralization contradicts the decentralized ethos of the underlying networks.

Onshoring efforts will accelerate. National security concerns will drive Western governments to subsidize domestic ASIC fabs. This mirrors the strategic logic behind the CHIPS Act, creating parallel, geopolitically-aligned supply chains for critical infrastructure.

Fragmentation creates protocol divergence. New ASIC designs will emerge for specific regional power grids and regulatory environments. This will lead to competing hardware standards, potentially splitting mining pools and hashpower along geographic lines.

Evidence: The U.S. Department of Energy now classifies Bitcoin mining as part of national critical infrastructure, a designation that mandates supply chain resilience and will catalyze billions in domestic investment.