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56.4 TH/s of Avalon Bitcoin Mining ASICs Reportedly Held Up in Customs

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Today, after several weeks of silence on the status of the 10,000 chip bulk orders, Yifu Guo posted on Avalon’s web site a story of extortion in china. Several weeks ago a team member’s personal information was identified and family members were intimidated. Reportedly, the malicious party was threatening Avalon team member’s safety if their demands for payment were not met. The radio-silence during was attributed to their evaluating potential solutions and implementing new security procedures. Also included in this report is an update on the status of existing pre-orders, as well as a discussion of their future plans.

The good news is that a significant portion of pre-orders are on their way to customers’ hands. Avalon sold both per-assembled units running at 65GH/s as well as bulk orders of 10,000 ASIC chips running at 282 MH/s each. Avalon pre-sold 600 assembled units units on March 25th for 75 BTC, projected to be one month’s return on mining at the time. The original shipping date was projected to be May 5th and the difficulty in mining has risen significantly since then, reducing expected ROI. As of the announcement today, all of these units have either arrived in customer’s hands or on their way through DHL.

In April, Avalon began taking orders for the 10,000 ASIC batches which were projected to arrive in mid-July. These individual chips cannot be used immediately and require being set in printed circuit boards (PCB) before they can be used. Avalon open-sourced this project and the bitcoin community quickly generated working prototypes. Aside from a report of 1 batch arriving in Switzerland, most customers have been anxiously awaiting the arrival of their orders. Today Avalon reported that 200,000 chips – totaling 45.4 TH/s – are on their way to customers but held up in customs. This would account for approximately 15% of the current 371 TH/s of current network speed. The chips have been in customs for 2 weeks now and the announcement did not provide any insight into why they are being held, or if they’re expected to be cleared any time soon.

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Source: mining.thegenesisblock.com

Not to be missed in the announcement was Yifu’s report that another 800,000 chips are in production from per-orders in early to mid-May. Given the 10 week initially-projected lead time they should be arriving by the end of August, but he emphasized that the predicted timeline has become tight. This massive order accounts for 225 TH/s, or 60% of the current mining network speed. Considering this is only accounting for one company’s production of chips it is clear the 75% monthly growth the network has seen recently is not likely to slow down soon.

As a final note, Avalon addressed the WSJ article published last Sunday that claimed Avalon was receiving $200M in funding from the famous ForEx trader Joe Lewis. The original article was ultimately taken down and a retraction posted in it’s place, but it appears some pieces of it may have been rooted truth. Avalon said the article, “consists of rumors, opinions and pieces of various stories,” and while apparently an NDA is in place preventing them from clarifying any furthers, they can confirm that they had a meeting with Taiwan Semiconductor (TSMC) in Amsterdam last week.

Additionally, Avalon spoke for the first time about their plans for more advanced chip designs. The current Gen1 chips use a 110nm process which is quickly becoming obsolete. Smaller processes allow chip manufacturers to make more powerful and power-efficient designs. Their Gen2 chips will use a 55nm process in the same physical dimensions, requiring very little rework for existing PCB designs. To much of the communities excitement, these Gen2 chips will not be pre-sold but will only be sold from existing stock starting in mid-October. Finally, Avalon hinted to the fact that there are two additional designs, Gen3 and Gen4, in parallel development that are in still in early stages.

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