As to building miners for dirt cheap, if KNC's profit margin is similar to the Jupiter series, they're making about 86-89% pure profit on the gear. So it could be done.. but.. the whole thing of they won't do it because they know they can just keep the money to themselves.
I dont think their profit margin is that high with the gear, their
secret is to build the machines and then mine with them a couple months before giving to public.
Unable to pre sell to the public at inflated prices anymore, I doubt they can make mining gear at that profit margin again unless they can con more people as they are going private now, which is what the new strategy is I believe with the A series funding round.
What do you think is their profit margin?
I would expect at least 30% of ~25m$ pre-order sold (Batch 1). The NRE of a 28nm ASIC and production cost should run much about 10m$? Batch 2 was then pure profit for them, as R&D has been paid for. I'd expect the marginal cost to be comparable or lower than the Bitmain L1, so a
Titan costs 1800$ to produce after R&D.
That said, this is pure speculation, I simply don't know.
The pre-order scams etc. will also damage Bitcoin and the hoped for spike in prices may not happen. At that point it's going to be difficult to make new hardware and profit from that as before, because the marginal increase in performance/watt does not justify the explosion in R&D costs. So from now on it'll be about "cheap", not about "quick to market" (IF they sell any)
Scrypt: Bitmain at $5 MH in December. KNC batch 2 $15 MH. Bitmain cost maybe $3-3.50 but importantly BOTH Companies use the money now from pre-ordrs to do something for 3 months.
The Titans are the Scrypt offshoot. I haven't done calculations on those but the Asics Neptunes will mine back 2 btc lifetime (currently) for them mining them earlier beforehand and release to the public profits more because they have cheap electricity, if that was the case then means $950 manufacture or less to break even (or maybe make at a loss) , better yet take 10k 12k, 6k, from customers by preselling them and use for a few months then re-sell them back at (retail price) before or at order deadline.