Canaan Expands US Production Amid Tariff Concerns, Discontinues AI Semiconductor Business

Bitcoin mining application-specific integrated circuit (ASIC) manufacturer Canaan has successfully completed a pilot production run in the US, marking a significant shift in its operational strategy. This move is part of a broader initiative to replicate its Malaysia-based operations closer to the North American market, aiming to improve delivery cycles, respond faster to local demand, and navigate future geopolitical or regulatory shifts.

In addition to expanding its US production capabilities, Canaan has announced the discontinuation of its AI semiconductor business. This strategic realignment is aimed at sharpening the company's focus on its core strengths in crypto infrastructure and Bitcoin mining. Nangeng Zhang, chairman and CEO of Canaan, stated, "I believe that doubling down on our core strengths in crypto infrastructure and Bitcoin mining is the most strategic path forward for Canaan."

While acknowledging that production costs are higher in the US, Canaan views this initiative as a potential strategic investment in long-term resilience. The company is actively working to optimize its US cost structure, with the goal of limiting production costs and achieving commercial viability. This effort includes managing expenses, meeting customer demand, and gaining clarity around the tariff environment.

Canaan's US foray is part of a long-term effort and is more than just a response to tariffs. The company's products manufactured in Malaysia are currently subject to a 10% tariff, and the tariffs on imported components and raw materials are less clear, making expense planning difficult. Canaan's expansion into the US will ultimately depend on achieving commercial viability through a combination of cost management, customer demand, and clarity around the tariff environment.

The company has also addressed potential concerns over US national security standards. Canaan's devices shipped to the US are produced in Malaysia and certified by local authorities. The representative added that should the company expand its US production further, it intends to ensure that its operations align with evolving US standards for technology and security. This comes after the US Customs and Border Protection Agency halted the delivery of thousands of Bitmain ASICs in November 2024, following an investigation into Chinese chip designer Xiamen Sophgo over an alleged business relationship with US-sanctioned telecommunications firm Huawei. The devices were only recently released.