The "Mining Rig" Supply Chain is changing, as three major Chinese giants set up factories in the US.

On June 19, news emerged that according to Reuters, the world's top three Bitcoin and Crypto Assets Mining Rig manufacturers, Bitmain, Canaan Creative, and Bit Microelectronics, are all planning to establish manufacturing plants and build a Supply Chain in the United States to avoid the impact of U.S. tariff policies.

The "Mining Rig" market continues to grow, with Chinese manufacturers occupying a monopoly position.

With the continuous growth of the Crypto Assets market in recent years, and the representative Bitcoin price breaking 100,000 USD, the demand for virtual currency Mining Rigs is also very strong. According to analysts' predictions, by 2028, the value of the Mining Rig industry will reach 12 billion USD.

According to a forecast by consulting firm Frost & Sullivan, by December 2023, Bitmain, Canaan Creative, and Bit Microelectronics will occupy 95.4% of the global crypto assets mining rig equipment market (earlier data showed that the third place was taken by Ebang International).

China once dominated the entire value chain of crypto assets—from Mining Rig manufacturing to mining and trading—until its government banned virtual currency activities in mainland China in 2021, citing financial stability risks. Subsequently, "miners", traders, and exchanges moved abroad. However, under the protective role of technology manufacturers, Bitmain, Canaan Creative, and Bitmicro continued to dominate the hardware sector. They resisted Western competitors, partly due to their first-mover advantage in developing high-performance chips tailored for mining.

Currently, the three major Mining Rig manufacturers mentioned above not only control the supply of Mining Rig chips, Mining Rig equipment, and supporting hardware, but also have their own mining pools.

△Canaan Creative's Bitcoin mining facility, hosted by Luna Squares in West Texas, USA, in 2023.

The role of the Mining Pool is to improve mining efficiency by centralizing computing power. Miners connect their Mining Rigs to the pool, which is responsible for managing and distributing the mining rewards. This method allows miners to utilize resources more effectively, increasing the success rate and stability of mining profits.

Affected by the U.S. tariff policy, Chinese Mining Rig manufacturers go to the U.S. for production.

However, with the ongoing escalation of the China-U.S. trade war and the reciprocal tariff policy implemented by the Trump administration, changes in the Supply Chain of crypto mining rigs are being triggered. In April of this year, the United States announced a 34% reciprocal tariff on products exported from China to the U.S., and subsequently, both sides continued to impose reciprocal measures, with the U.S. cumulatively increasing tariffs on Chinese exports to the U.S. by 145%.

On May 12, a phased tariff agreement was reached between China and the United States, with the U.S. canceling a total of 91% of tariffs imposed on Chinese goods after April 8, 2025. Additionally, 24% of the 34% reciprocal tariffs previously imposed on Chinese goods will be suspended for 90 days, while the remaining 10% will be temporarily retained. However, if subsequent negotiations do not go well, the U.S. may still continue to impose 34% or even higher tariffs on China. When considering the additional 20% tariffs that have already been accumulated since the announcement of reciprocal tariffs in February this year, the total tariff rate could reach as high as 54%.

Taking Bitmain's currently strongest Bitcoin Miner S23 Hyd. as an example (pre-order now, delivery in January 2026), its price is 17,400 USD. If a 54% tariff is added for exports to the United States, it means that its American customers will need to pay up to 9,396 USD in tariffs, which will undoubtedly greatly reduce its competitiveness in the U.S. market.

△Bitmain's currently popular Mining Rig products

Clearly, this will be a significant blow to the Chinese mining rig giants who dominate the global Crypto Assets mining rig market. This is because the US market accounts for over 30% of the global market for Crypto Assets mining rig procurement. This has directly driven Chinese Crypto Assets mining rig manufacturers to manufacture in the US.

As the world's largest Mining Rig manufacturer, Bitmain began producing Mining Rig equipment in the United States one month after Trump won the presidential election, in December 2024. This is a "strategic move."

Leo Wang, Vice President of Corporate Development and Capital Markets at Canaan Creative, also told Reuters that after Trump announced his so-called "reciprocal tariffs" on April 2, Canaan Creative began trial production of its Mining Rig equipment in the United States to avoid the impact of tariffs. He stated that this initiative is exploratory, as the turbulent tariff situation has ruled out a significant amount of investment.

"Our reasoning is to try to lower costs for us and our clients," said Leo Wang, adding that the prospect of tariffs means "we must explore all alternatives." However, the U.S. may also increase tariffs on Southeast Asian countries that host assembly plants for Chinese Mining Rig manufacturers.

The third-ranked Bitwei also stated in a statement that it is "actively implementing localization strategies in the United States" to "avoid the impact of tariffs."

"Bottleneck" and "Threat Theory"

Due to the monopoly position of Chinese manufacturers in the crypto assets mining rig market, some American competitors and politicians have been amplifying the "threat theory" surrounding Chinese crypto assets mining rigs.

For example, Auradine, a Mining Rig manufacturer supported by the largest Bitcoin miner in the United States, MARA Holdings, has been lobbying the U.S. government to restrict the export of Mining Rigs made in China to stimulate the development of the local Mining Rig equipment sector in the United States.

"Although over 30% of Bitcoin mining occurs in North America, more than 90% of the mining hardware comes from China, which represents a serious geographical supply-demand imbalance," said Sanjay Gupta, Chief Strategy Officer of Auradine.

Sanjay Gupt also stated that there are security risks for China’s mining rigs, with "hundreds of thousands connected to the U.S. power grid."

In response, Leo Wang from Canaan Creative refuted that Crypto Assets mining equipment does not pose a security threat because "if they are not used for Bitcoin mining, they will be useless." Nevertheless, he said that manufacturers might suffer "collateral damage" due to the U.S. restrictions on selling high-tech products to Chinese companies.

Bitmain's AI subsidiary Sophgo was previously placed on the entity list by the United States for security reasons, highlighting this risk.

It is worth mentioning that U.S. President Trump has promised to promote the mainstream use of crypto assets in the United States. His son, Eric Trump, partnered with energy and technology company Hut 8 to launch the miner American Bitcoin, aiming to establish a strategic Bitcoin reserve.

However, Chinese manufacturers' monopoly in the crypto assets mining equipment market "creates a bottleneck for American miners," said U.S. crypto attorney John Deaton. "If China restricts exports or supplies... it could undermine the stability of the Bitcoin network and affect U.S. users and investors."

Ryan M. Yonk, an economist at the American Institute for Economic Research, also stated that the largest market cap miners MARA, Core Scientific, CleanSpark, and Riot platforms are all based in the United States, so over-reliance on hardware sourced from China "may pose problems."

To avoid political influences, Canaan Creative began developing its business in Singapore several years ago, despite the fact that the Chinese market accounts for 40% of its revenue.

The Chief Technology Officer of the crypto assets platform Komodo, Kadan Stadlemann, stated that Chinese mining rig manufacturers may establish factories in the United States, but in the short term, American crypto assets miners will still purchase mining rigs from China and will be troubled by higher import costs. "But this is not meant to harm the industry. It is about forcing a change that should have happened long ago," he said.

"The China-U.S. trade war is causing structural changes in the Bitcoin supply chain, rather than superficial changes," according to Guang Yang, the Chief Technology Officer of blockchain technology provider Conflux Network. For American companies, "this change has even gone beyond tariffs, representing a strategic shift towards 'politically acceptable' hardware sources."