Canaan Inc. Secures Large Avalon Miner A1566 Purchase Order From Cipher Mining Technologies Inc.

Rhea-AI Summary

Canaan (NASDAQ: CAN) has announced a significant purchase agreement with Cipher Mining Technologies (NASDAQ: CIFR). Cipher Mining has ordered 6,600 units of Canaan's Avalon Miner A1566, known for its advanced computing power and efficiency. The delivery of these units is scheduled for Q4 2024. Additionally, Cipher has an option to acquire more mining machines, supporting up to 160 MW of capacity, allowing for operational scalability. Executives from both companies emphasized the strong partnership and the advanced capabilities of the A1566 model in addressing operational challenges.

Positive

• Secured a large order of 6,600 Avalon Miner A1566 units from Cipher Mining.
• Delivery scheduled for Q4 2024, providing a clear timeline for revenue recognition.
• Cipher Mining has an option to purchase additional units supporting up to 160 MW capacity, indicating potential future sales.
• Reflects a strong, ongoing partnership with Cipher Mining, a long-term client.
• Highlights the advanced computing power and power efficiency of the Avalon Miner A1566.
• Positive endorsement from Cipher Mining's CEO about the product's reliability and performance.

Negative

• Dependence on a single large order poses a risk if the deal faces delays or cancellations.
• Potential over-reliance on Cipher Mining as a major client.

Financial Analyst

The purchase order from Cipher Mining Technologies is a significant development for Canaan Inc. The massive order of 6,600 units of the Avalon Miner A1566, complemented by an option to buy more to fulfill up to 160 megawatts of capacity, signals strong demand for Canaan’s products. Revenue from this deal could provide a substantial boost to Canaan's financials in the fourth quarter of 2024 and beyond. Investors should note that such orders often have a ripple effect, enhancing both the top-line and potentially improving gross margins due to the scale of production.

Given the high competition in the high-performance computing solutions market, securing a long-term partner like Cipher Mining not only provides immediate financial benefits but also strengthens market positioning and showcases the reliability and performance of Canaan's technology. However, there will be pressure to deliver these units on time and to the expected performance standards, which if not met, could harm future orders and client trust.

Tech Expert

The Avalon Miner A1566 is the latest product in Canaan's lineup and its sale to Cipher Mining is a testament to its advanced computing power and power efficiency. This technical prowess is critical, especially in the post-halving era where efficiency and performance are paramount to profitability in cryptocurrency mining. The adaptation to hot environments and frequent curtailment mentioned by Cipher's CEO highlights the robustness and reliability of the A1566, making it an attractive solution for demanding clients.

For retail investors, understanding the technology behind the A1566 can offer insights into why this product might outperform competitors. Enhanced computing power translates to higher hash rates, important for successful mining operations, while power efficiency reduces operational costs, thereby improving profit margins.

SINGAPORE, June 6, 2024 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), a leading high-performance computing solutions provider, today announced that it has signed a large purchase agreement (the "Agreement") with one of the Company's long-term partners, Cipher Mining Technologies Inc. (NASDAQ: CIFR) ("Cipher").

According to the Agreement, Cipher Mining has acquired 6,600 units of Canaan's latest product, the Avalon Miner A1566, which features advanced computing power and power efficiency. The initial order is expected to be delivered in the fourth quarter of 2024. In conjunction with the Agreement, Cipher also secured an option to purchase additional mining machines, which fulfill a total capacity of up to 160 megawatts. This option provides Cipher with the flexibility to scale their operations as needed.

"We are delighted to secure this additional order from our long-term partner, Cipher Mining," said Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan. "This order not only demonstrates the superior performance of our new A1566 mining machines, which are being recognized by our valued clients, but it also reflects the deep trust built from our past collaborations where we have consistently delivered reliable products and services. Going forward, we will remain focused on providing our clients with advanced products that cater to their evolving needs, supporting their growth and success in the post-halving era."

Tyler Page, CEO of Cipher Mining Inc., commented, "When Cipher needed to upgrade our most valuable data center at Odessa and plan for our new 300 MW data center in 2025, we turned to Canaan. Between hot environments and frequent curtailment, we demand a lot from our mining equipment, and Canaan has always helped us solve our toughest challenges."

About Cipher

Cipher is an emerging technology company focused on the development and operation of bitcoin mining data centers. Cipher is dedicated to expanding and strengthening the Bitcoin network's critical infrastructure. Together with its diversely talented team and strategic partnerships, Cipher aims to be a market leader in bitcoin mining growth and innovation. To learn more about Cipher, please visit https://www.ciphermining.com/

About Canaan Inc.

Established in 2013, Canaan Inc. (NASDAQ: CAN), is a technology company focusing on ASIC high-performance computing chip design, chip research and development, computing equipment production, and software services. Canaan has extensive experience in chip design and streamlined production in the ASIC field. In 2013, under the leadership of Mr. Nangeng Zhang, founder and CEO, Canaan's founding team shipped to its customers the world's first batch of mining machines incorporating ASIC technology in bitcoin's history under the brand name Avalon. In 2019, Canaan completed its initial public offering on the Nasdaq Global Market. To learn more about Canaan, please visit https://www.canaan.io/.

Safe Harbor Statement

This announcement contains forward−looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, future product deliveries, as well as Canaan Inc.'s strategic and operational plans, contain forward−looking statements. Canaan Inc. may also make written or oral forward−looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20−F and 6−K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Canaan Inc.'s beliefs and expectations, are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking statement, including but not limited to the following: the Company's goals and strategies; the Company's ability to work with its partners to deliver on its intended timeline; the Company's future business development, financial condition and results of operations; the expected growth of the bitcoin industry and the price of bitcoin; the Company's expectations regarding demand for and market acceptance of its products, especially its bitcoin mining machines; the Company's expectations regarding maintaining and strengthening its relationships with production partners and customers; the Company's investment plans and strategies, fluctuations in the Company's quarterly operating results; competition in its industry; and relevant government policies and regulations relating to the Company and cryptocurrency. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Canaan Inc. does not undertake any obligation to update any forward−looking statement, except as required under applicable law.

Investor Relations Contact:
Canaan Inc.
Ms. Xi Zhang
Email: IR@canaan-creative.com 

ICR, LLC.
Robin Yang
Tel: +1 (347) 396-3281
Email: canaan.ir@icrinc.com

 

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SOURCE Canaan Inc.

FAQ

What is the latest product ordered by Cipher Mining from Canaan?

Cipher Mining has ordered 6,600 units of Canaan's Avalon Miner A1566.

When will Canaan deliver the Avalon Miner A1566 units to Cipher Mining?

The delivery is scheduled for the fourth quarter of 2024.

How much capacity can Cipher Mining's additional purchase option support?

Cipher Mining's additional purchase option can support up to 160 megawatts of capacity.

What is the stock symbol for Canaan?

The stock symbol for Canaan is NASDAQ: CAN.

Why did Cipher Mining choose Canaan's Avalon Miner A1566?

Cipher Mining chose the Avalon Miner A1566 for its advanced computing power, power efficiency, and proven reliability in challenging operational environments.

What is the significance of the order for Canaan?

The order demonstrates the superior performance of Canaan's new A1566 mining machines and reflects the deep trust from long-term client Cipher Mining.