Canaan to exit AI semiconductor business, focus on crypto operations

SINGAPORE - Crypto mining company Canaan Inc. (NASDAQ:CAN), currently trading at $0.61 with a market cap of $280 million, announced Monday it will discontinue its non-core AI semiconductor business to concentrate on its primary operations in bitcoin mining machine sales, self-mining, and consumer mining products. According to InvestingPro data, the company has seen its stock decline over 70% year-to-date, highlighting the challenging market conditions.

The strategic realignment aims to streamline operations and improve capital efficiency by eliminating a business segment that generated approximately $0.9 million in revenue during fiscal year 2024. The AI semiconductor unit, described as "ASICs for edge computing applications" in the company’s annual report, accounted for around 15% of Canaan’s total operating expenses last year. This move comes as InvestingPro analysis shows the company is quickly burning through cash, with a concerning gross profit margin of -14.62%.

Canaan has been exploring options for its AI semiconductor business since March 2022, including potential asset sales or orderly wind-downs. The discontinuation process is expected to conclude within the coming months.

"By focusing our resources and talent on the areas where we have deep expertise and competitive advantage, we aim to drive sustainable growth," said Nangeng Zhang, chairman and chief executive officer of Canaan Inc. The company’s financial health score is currently rated as ’WEAK’ by InvestingPro, which offers 12 additional key insights about the company’s performance and prospects in its comprehensive Pro Research Report.

The company expects its operating expenses to decline significantly following the complete discontinuation of the AI semiconductor business unit. Canaan will redirect resources toward its core strengths in crypto infrastructure and bitcoin mining operations.

Established in 2013, Canaan specializes in ASIC high-performance computing chip design and cryptocurrency mining equipment. The company completed its initial public offering on the Nasdaq Global Market in 2019. Despite current challenges, analysts project sales growth for the current year, though profitability remains a concern according to InvestingPro forecasts.

The information in this article is based on a press release statement from Canaan Inc.

In other recent news, Canaan Inc. reported a notable increase in Bitcoin production for May 2025, achieving a record 109 bitcoins, which represents a 25% month-over-month rise. This production boost occurred despite facing increased tariffs on its Malaysia-manufactured mining equipment. The company’s operational and installed hashrates reached historical peaks at 7.27 EH/s and 8.75 EH/s, respectively. Additionally, Canaan’s executives, including CEO Nangeng Zhang, have demonstrated confidence in the company’s future by purchasing 817,268 American Depositary Shares and announcing a $30 million stock repurchase program. However, Canaan mutually agreed to terminate a $100 million preferred share financing agreement due to market conditions. Analysts from Benchmark maintained a buy rating with a $2 price target, while Northland initiated coverage with a Market Perform rating and a $1.50 price target. Benchmark views Canaan’s stock as an attractive opportunity for investors, citing potential upside if market conditions improve. Meanwhile, Northland highlighted Canaan’s strategic positioning in the cryptocurrency mining sector and its dual strategy of manufacturing and self-mining operations.

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