The Chinese manufacturer of application-specific integrated circuit (ASIC) mining machines reported an 82% drop in revenue in the fourth quarter of 2022.
Canaan Creative, a Chinese manufacturer of Bitcoin application-specific integrated circuit (ASIC) miners, reported an 82% drop in revenue in the fourth quarter of 2022, according to a filing with the U.S. Securities and Exchange Commission on March 7.
Canaan's income drops
The quarterly decline was driven by a 14% drop for the full year.
In the fourth quarter of 2022, Canaan reported selling more than 1.9 million terahashes per second of Bitcoin mining computing power, down 75.8% from the same period last year, excluding lower ASIC prices.
On the other hand, Canaan Creative’s mining revenue increased by 368.2% year-on-year to US$10.46 million.
Zhang Nangeng, Chairman and CEO of Canaan Creative, said:
“We experienced a difficult fourth quarter as the further decline in Bitcoin prices during the quarter led to sluggish market demand for mining equipment, as we expected.”
“To mitigate demand risks during market downturns, we have been working hard to improve and grow our mining operations,” the CEO added.
Zhang specifically mentioned efforts to make more progress in early 2023, with the company achieving a mining hash rate target of 3.8 EH/s in late February.
“We strive to weather the current difficult period while being prepared for the market’s recovery. As a result, we have made decisive investments to enhance our production capabilities and expand our mining operations into more diverse geographic areas that offer favorable conditions. We believe the growth of these high-quality assets will provide us with strong returns in Bitcoin and significant appreciation when Bitcoin prices rise.”
Canaan Creative's ASIC technology
Canaan's highly sought-after Bitcoin mining chip ASIC was first mass-produced in 2013. In 2018, Canaan launched the world's first 7nm ASIC chip, providing energy-efficient computing equipment for cryptocurrency mining.
In the same year, the company launched the world's first commercial edge AI chip based on the 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 will be a year to watch for the listed company.
“We have expanded globally and established an overseas supply chain and headquarters in Singapore. Our team has gained experience running our mining operations in multiple overseas locations. We have also launched a new series of mining machines using the latest cutting-edge process nodes, bringing our computing power and efficiency to a new level.”
In 2022, the company also announced the expansion of its cryptocurrency mining business in Kazakhstan. After China announced a crackdown on cryptocurrency mining, Canaan Creative has launched a number of strategic collaborations with a number of cryptocurrency mining companies.
Now it seems to be hoped that Canaan can use its extensive understanding of industry cycles to restore the company's revenue, "We are confident that we can overcome challenges and seize more market opportunities in the Bitcoin up cycle."