Canaan Inc., a leading provider of supercomputing solutions, is delivering on their 2021 strategic plans announced earlier this year and driving their own crypto-mining business in Kazakhstan with their latest Avalon Miner units already in operation.
Nangeng Zhang, Chairman and CEO of Canaan, said: “We believe that our self-operated Bitcoin mining business will help us improve our financial performance as well as expand our business scope and customer base. As we integrate more industry resources into our operations, we believe this business segment will enable us to revitalize our mining machine inventory, shield us from Bitcoin volatility, and ensure our inventory sufficiency during market upturns”.
As one of the largest crypto-mining machine manufacturers, the move beyond Canaan’s existing business model is the logical next step as it enables them to optimize their revenues, as well as strengthen their inventory management and supply chain capabilities.
The production and sales of mining machines have typically been closely related to the prices of their underlying cryptocurrency. Undue fluctuations in the price of Bitcoin, for instance, can have the adverse impact of inducing undue volatility in the revenue streams of mining hardware providers. Coupled with the longer-term nature of manufacturing and production processes, where lead-times tend to be more stretched out, it is not uncommon for there to be a time lag between supply-side responses and changes in demand. This often means two extremes: idling resources or overly strained capacity. The diversification into mining then, not only mitigates such operational risks, but also significantly improves Canaan’s nimbleness and ability to navigate the rapidly evolving market conditions.
During a period of lull, the mining business will benefit from taking full advantage of the availability of their in-stock mining machines to be actively deployed in their mining operations at low electricity rates, thus maximising their computing power at that time.
On the flipside, when market activity is elevated, the mining business will also benefit from putting the processing capacity of older machines in use.
The net result will be a considerable improvement in inventory planning and supply chain optimization throughout the year and unaffected by the price of Bitcoin.
Finally, the venture into Bitcoin mining allows Canaan to directly accumulate Bitcoin which is now widely accepted as an investable asset class, and thus has the potential for considerable upside for Canaan.
Canaan also recently announced the opening of their first overseas Service Center in Kazakhstan.
About
Canaan is a leading provider of supercomputing solutions, distinguished for superior cost-efficiencies and performance. In addressing the limitations of today’s computing hardware, Canaan strives to advance the world we live in by powering transformative technologies.
Canaan is renowned for having invented the world’s first ASIC-powered Bitcoin mining machine in 2013, radically catalysing the growth of a computationally advanced Bitcoin mining sector. Today, Canaan continues to be the second largest designer and manufacturer of Bitcoin mining machines globally.
Developed through academic research, rigorous expertise in semiconductor design, and backed by a robust network of strategic partners, Canaan continues to expand its suite of advanced hardware offerings, exploring opportunities across some of the world’s most exciting emerging technologies.
For more information, visit: canaan.io