Canaan, a Singapore-based producer of Bitcoin ASIC machines, has announced its withdrawal from the artificial intelligence chip sector, redirecting its focus back to its primary business in crypto infrastructure.
The company confirmed on Monday that it has ceased operations of its AI semiconductor division and has finalized a pilot production run of mining rigs within the United States.
This strategic pivot comes as Canaan aims to regain its footing, having encountered challenges in diversifying beyond its traditional Bitcoin mining operations.
Canaan Refocuses Strategy on Bitcoin Mining, Ends Costly AI Semiconductor Unit
In a formal statement released Monday, Canaan outlined the discontinuation of its AI semiconductor division, citing a lack of alignment with its long-term objectives.
Chairman and CEO Nangeng Zhang stated, “I believe that doubling down on our core strengths in crypto infrastructure and Bitcoin mining is the most strategic path forward for Canaan.”
Despite generating only $900,000 in revenue in 2024, the AI unit accounted for a significant portion of the company’s operating expenses, consuming 15% of its total costs.
$CAN Canaan to discontinue non-core AI semiconductor business unit
Canaan commenced a strategic realignment aimed at sharpening its focus on its core businesses of bitcoin mining machine sales, self-mining operations, and consumer mining products. As part of this initiative, the…
— DonCorleone77 (@CorleoneDon77) June 23, 2025
The company cited an imbalance between costs and returns, along with inadequate alignment with its future goals, as the driving factors behind the decision to dissolve the AI unit.
Since March 2022, Canaan had been evaluating various options for the segment and anticipates that the wind-down process will take several months to complete.
In its new strategic effort, Canaan has initiated its first production run in the U.S., mirroring its Malaysian operations.
While acknowledging the increase in manufacturing costs associated with U.S. operations, Canaan views this as a long-term investment opportunity.
Representatives from Canaan remarked, “This initiative is not just a hedge against tariffs but a potential strategic investment in long-term resilience.”
By establishing production facilities closer to the North American market, Canaan aims to expedite delivery times, quickly adapt to customer requirements, and better navigate potential regulatory changes.
Currently, imported mining equipment from Malaysia incurs a 10% U.S. tariff, complicating the cost predictability of components and raw materials.
In efforts to enhance its U.S. cost structure, the company is working diligently to keep production expenses in check.
Canaan underscored that any expansion of its U.S. operations will hinge on the commercial viability of production, which includes factors such as tariff clarity, sustained demand, and manageable costs.
Additionally, Canaan addressed potential national security apprehensions, ensuring that all devices shipped to the U.S. are manufactured in Malaysia and are compliant with local regulations.
Should the company expand its U.S. manufacturing capabilities, it affirmed its commitment to adhering to U.S. technology and security regulations.
Canaan Doubles Down on U.S. Bitcoin Mining as Rivals Localize Amid Tariff Pressures
Canaan, known for its Avalon series, is joining competitors Bitmain and MicroBT in bolstering operations within the U.S., now home to over 38% of global Bitcoin mining activities.
Collectively, these three firms dominate the global mining rig sector, controlling more than 90% of the market share.
This transition follows Donald Trump’s victory in the 2024 elections, which has reignited demands for domestically produced mining equipment.
In December, shortly after Trump’s re-election, Bitmain commenced American production, while MicroBT has adopted a clear “localization strategy” to meet “American Made” expectations.
Even as Canaan’s shares have plummeted by 71% year-to-date, falling below both crypto and mining indexes, some analysts see the firm’s expanding self-mining operations in the U.S. as a potential catalyst for future growth.
In addition, Canaan is targeting retail miners with the launch of its Avalon Q miner in March. This high-performance machine is designed to cater to home users, offering a capacity of up to 90 TH/s with adjustable power consumption.
@canaanio has unveiled the Avalon Mini 3 and Nano 3S at CES 2025, merging Bitcoin mining with home heating.#Canaan #BitcoinMininghttps://t.co/O41SeV9Cz6
— Finance Newso.com (@Finance Newso) January 8, 2025
The new product aims to deliver professional-grade mining capabilities to retail users, connecting to standard 110V household outlets.
Financially, Canaan exceeded revenue expectations in Q4 2024, reporting $88.8 million, marking an 80.9% increase year-over-year. Overall revenue for 2024 reached $269.3 million, a 27.4% rise compared to 2023.
@canaanio mines 82 Bitcoin in February, increasing its holdings to 1,355 $BTC, while exceeding Q4 revenue projections with $89 million.#Canaan #CryptoMining https://t.co/9H07kOtfyO
— Finance Newso.com (@Finance Newso) March 3, 2025
With the discontinuation of AI chip production and a renewed focus on enhancing its U.S. presence and retail hardware, Canaan is positioning itself for the evolving landscape of Bitcoin mining.
The post Bitcoin ASIC Manufacturer Canaan Drops AI Chips, Bets Big on U.S. Bitcoin Mining – Here’s Why appeared first on Finance Newso.
