Despite starting the year in “an increasingly unpredictable environment” due to macroeconomic uncertainties and logistic disruptions caused by the COVID-19 pandemic, China-based chip producer, Canaan, says it recorded an increase of 119.1% in total computing power sold in Q1 2022 as compared to the same period of 2021.

More computing power sold, more revenues
In its unaudited financial results for the quarter ended March 31, 2022, released this week, the company notes that it sold 4.3 million Thash/s compared to Q1 2021’s 2.0 million Thash/s which, alongside the average selling price per Thash/s, leads to year-over-year higher revenues. Its mining business also saw a boost as the company now holds 166.96 Bitcoin – with a value of RMB45.3 million (US$7.1 million) – on its balance sheet as of March 31, its report states.

The recorded year-over-year revenues of RMB1,356.1 million (US$213.9 million) for Q1 2022 – an increase of 236.7% from 2021’s RMB402.8 million – was an underperformance that was expected, according to the company’s CFO, James Jin Cheng. It follows the suspension of delivery logistics in the second half of March due to COVID-19 control measures in Canaan’s factory and warehouses city.

“Since the end of March, we have been gradually resuming production and delivery, following the guidelines from the local governments,”  Jin Cheng said. “As of present, we have shipped out most of the delayed orders from the first quarter. In addition, despite increasing costs for raw materials, especially wafers, we managed to achieve a net income of RMB441.6 million.”

Aside from the COVID-19 resurgence, and the supply chain constraints it orchestrated, another top challenge that has been facing the crypto mining industry of late is the recent downward fluctuation in Bitcoin price.

According to Luxor Mining, which regularly provides industry-related analysis, data, and hash rate insights, the price of the top cryptocurrency has faced a prolonged drawdown since December 2021 and has in turn dropped the hashprice from application-specific integrated circuit (ASIC) mining to post-China mining ban level of below $0.13/TH/day.

Looking ahead positive
The Canaan results come as a light tinge shines on a possible underground crypto mining sector growth in China – after related activities are known to have been banned. Going by the Cambridge Centre for Alternative Finance’s new mining map data, China has reportedly re-emerged as a major contender in the Bitcoin mining fold to represent more than 20% of the Bitcoin network’s hash rate. While not denying that the US has been growing in dominance to be the world’s leading crypto mining country, the CCAF’s figures suggest that China’s discreet mining activities have resurged to be only behind the US while leaving Kazakhstan (13.22%), Canada (6.48%), and Russia (4.66%) behind. The finding suggests a new dimension to the crypto mining market competition

This could be a motivation for the likes of Canaan which expects to generate total net revenues in the range of RMB1,600 million (US$252.4 million) to RMB1,800 million in the second quarter of 2022 (or an increase of 48% to 67% to Q2 2021’s revenues). The forecast, the company states, reflects their “current and preliminary views on the market and operational conditions” but are subject to change.