Despite 82% drop in quarterly revenue, Bitcoin mining hardware manufacturer Canaan remains optimistic

Canaan, a Chinese manufacturer of application-specific integrated circuit (ASIC) mining machines for Bitcoin, reported an 82% drop in revenue in Q4 2022, according to a filing with the United States Securities and Exchange Commission on March 7.

Canaan revenues fall

The quarterly dip was precipitated by a 14% drop for the year.

In Q4 2022, Canaan reported selling more than 1.9 million terahashes per second worth of computing power for Bitcoin mining, representing a 75.8% decline from the same quarter in the previous year, not accounting for lower ASIC prices.

Canaan’s mining revenue, on the other hand, improved 368.2% year-over-year to $10.46 million.

According to Nangeng Zhang, chairman and CEO of Canaan:

“We went through a tough fourth quarter as the further sinking Bitcoin price during the quarter led to lackluster market demand for mining machines as we expected.”

The CEO added, “to mitigate demand risks during the market downturn, we have been diligently improving and developing our mining business.”

Zhang mentioned specifically efforts to yield more progress in early 2023, with the firm hitting its goal of 3.8 EH/s hash rate for mining at of the end of February.

“We strive to endure the present arduous period while simultaneously positioning ourselves for the market’s resurgence. Accordingly, we have made decisive investments in bolstering our production capacity and expanding our mining operations to more varied geographic regions that offer advantageous conditions. We believe the growth of these high-quality assets will bring us tremendous bitcoin rewards and substantially appreciate in value when the bitcoin price increases.”

Canaan’s ASIC technology

Canaan’s highly sought-after Bitcoin mining chip, ASIC, was among the first to reach mass production in 2013. In 2018, Canaan made history by unveiling the world’s first 7nm ASIC chip, offering energy-efficient computing equipment to the cryptocurrency mining sector.

That same year, the company introduced the world’s first commercial edge AI chip based on RISC-V architecture, leveraging the power of ASIC technology to advance high-performance computing and artificial intelligence.

Despite the challenges of the macro market environment, Zhang added that 2022 was a notable year for the publicly traded company.

“We expanded globally and established overseas supply chains and headquarters in Singapore. Our teams gained experience in operating our mining business in various overseas locations. We have also debuted our new mining machine series incorporating the latest cutting-edge process node, driving our computing power and efficiency to a new level.”

In 2022, the company also announced expanding crypto mining operations in Kazakhstan. Canaan entered into several strategic operations with multiple crypto mining firms after China announced its crack down on crypto mining.

The hope now seems that Canaan can leverage its extensive understanding of the industry cycle to bring company revenue back up, “we are confident of overcoming challenges and capturing more market opportunities in the rising bitcoin cycle.”