Canaan Inc. Expands Self-Mining Footprint in North America

Rhea-AI Summary

Canaan Inc. (NASDAQ: CAN) has announced a significant expansion of its crypto mining operations in North America through new partnerships. The company has signed a three-year master colocation agreement with Mawson Hosting in Midland, Pennsylvania, and a 24-month equipment hosting agreement for a facility in Edna, Texas.

These partnerships are expected to add approximately 4.7 EH/s of North American hashrate to Canaan's self-mining computing power. The majority of this hashrate is anticipated to be installed by the second quarter of 2025.

The expansion aligns with Canaan's strategic focus on the U.S. market, where regulatory policies support the company's ambitions for both self-mining activities and mining machine sales opportunities.

Positive

• Significant expansion of mining capacity with 4.7 EH/s additional hashrate
• Strategic entry into U.S. market with favorable regulatory environment
• Long-term partnerships secured with 3-year and 24-month agreements

Negative

• Several months delay in implementation with majority of hashrate not active until Q2 2025

Insights

Cryptocurrency Mining Expert

Canaan's expansion into self-mining operations marks a significant strategic pivot that transforms the company from primarily a hardware manufacturer to a vertically integrated mining operator. The addition of ~4.7 EH/s of hashrate represents substantial computing power that will meaningfully contribute to Canaan's revenue diversification strategy.

The geographic selection of Pennsylvania and Texas is strategically sound. Texas offers favorable electricity rates and a supportive regulatory environment for crypto mining operations, while Pennsylvania provides access to alternative energy sources and cooler climate conditions that can reduce cooling costs. The multi-year agreements (three years with Mawson and two years for the Texas facility) demonstrate a medium-term commitment to this business model evolution.

This expansion allows Canaan to capture value across the mining value chain rather than solely relying on equipment sales, which tend to be cyclical and subject to market volatility. By operating their own mining equipment, they can generate more consistent revenue streams from block rewards and transaction fees, particularly valuable given their access to proprietary latest-generation mining hardware at manufacturer cost.

The timing of this announcement suggests Canaan has been methodically evaluating hosting partnerships, as noted by CEO Zhang's reference to evaluating sites for "several months." This patient approach indicates disciplined expansion rather than rushed deployment.

Financial Analyst

This strategic expansion represents a material business model evolution for Canaan with several financial implications. First, it diversifies revenue streams beyond hardware sales, which can help smooth out the company's historically volatile financial performance tied to cryptocurrency market cycles.

The colocation agreements enable Canaan to deploy significant mining capacity without building and operating their own facilities, reducing capital expenditure requirements while still accessing the benefits of self-mining operations. This capital-efficient approach is particularly important given Canaan's market capitalization of approximately $386 million.

The partnership with publicly-traded Mawson Infrastructure Group adds credibility to this strategic shift and may facilitate smoother expansion in the regulated U.S. market. For investors, this move signals management's commitment to establishing a more stable business foundation rather than relying exclusively on mining rig sales.

With the majority of the 4.7 EH/s expected to be installed by Q2 2025, investors should anticipate gradual revenue contribution over the coming quarters rather than immediate financial impact. The multi-year agreements also provide better visibility into future earnings potential from this business segment.

This vertical integration strategy positions Canaan to potentially capture higher margins during favorable crypto market conditions while providing revenue diversification during hardware sales downturns, creating a more balanced business model with reduced cyclicality.

New mining partnerships to add ~4.7 EH/s

Mining machines to be hosted at facilities in Pennsylvania and Texas

Self-mining energization expected in coming months

SINGAPORE, March 26, 2025 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), an innovator in crypto mining, today announced that wholly owned subsidiaries of Canaan have signed agreements that expand the Company's self-mining capabilities at two new partners' mining facilities in Pennsylvania and Texas.

A three-year master colocation agreement has been entered into with Mawson Hosting LLC, an affiliate of Mawson Infrastructure Group Inc. (NASDAQ: MIGI), for its facility in Midland, Pennsylvania. This expansion in Pennsylvania, together with another recently executed 24-month equipment hosting agreement for a facility in Edna, Texas, is expected to add around 4.7EH/s of North American hashrate to Canaan's self-mining computing power. The majority of this hashrate is expected to be installed by the second quarter of 2025.

"Our team has been evaluating mining sites across North America for several months, patiently looking for self-mining and partnership opportunities that made sense for our business.  We believe that these two new partners have goals that align with Canaan's and that we can build long-term relationships with them," said Nangeng Zhang, chairman and chief executive officer of Canaan.  "The U.S. has regulatory policies that support our Company's ambitions, and we believe that we will be able to find additional partnerships and sites that will help us to increase our presence in the U.S. through self-mining activities and provide us with additional opportunities for mining machine sales."

"We are delighted to announce the partnership between Canaan and Mawson. This agreement aligns with our strategy of optimizing digital infrastructure and compute management capabilities with the latest-generation machines. By combining Canaan's cutting-edge hardware and Mawson's digital infrastructure innovation, we expect to create long-term value that will benefit both companies as well as the overall ecosystem," said Rahul Mewawalla, chief executive officer and president of Mawson Infrastructure Group Inc.

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, 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 press release 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, Canaan Inc.'s anticipated financing plans and its intended use of proceeds 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 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.
Xi Zhang
Email: IR@canaan-creative.com 

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

View original content:https://www.prnewswire.com/news-releases/canaan-inc-expands-self-mining-footprint-in-north-america-302411876.html

SOURCE Canaan Inc.

FAQ

How much hashrate will Canaan (CAN) add through its new North American mining partnerships?

Canaan will add approximately 4.7 EH/s of hashrate through its new partnerships in Pennsylvania and Texas.

When will Canaan (CAN) complete the installation of its new mining operations?

The majority of the 4.7 EH/s hashrate is expected to be installed by the second quarter of 2025.

What is the duration of Canaan's (CAN) new hosting agreements in Pennsylvania and Texas?

Canaan signed a three-year agreement with Mawson Hosting in Pennsylvania and a 24-month agreement for the Texas facility.

Where are Canaan's (CAN) new mining facilities located in North America?

The new mining facilities are located in Midland, Pennsylvania and Edna, Texas.