Nasdaq-listed mining-machine maker Intchains Group is halting plans for significant new Ethereum purchases, redirecting its capital toward the development of a new mining chip and early-stage artificial intelligence initiatives. The strategic pivot follows a severe drop in revenue and wider losses during the first half of the year.
On Aug. 20, Intchains reported that its revenue for the first half of the year collapsed by 94% to RMB11.1 million (approximately $1.6 million), down from RMB175.6 million during the same period a year earlier. Nearly all of that revenue came from a RMB10.9 million sale of non-core chip inventory to a related party, highlighting weaknesses in its core hardware business. Additional pressure came from China's February restrictions on domestic mining-machine sales, which led Intchains to stop accepting new mainland orders.
The company stated it no longer anticipates material additional accumulation of cryptocurrency. However, it plans to maintain its existing treasury and continue generating staking yield. As of June 30, Intchains held approximately 9,176 units of ETH-based cryptocurrencies valued at RMB98.1 million. By Aug. 20, 4,556 ETH had been allocated to staking.
The pullback from crypto buying does not stem from an immediate liquidity shortage. Intchains reported $68 million (RMB461.1 million) in cash and short-term investments at the end of June, which management says is sufficient to fund its ASIC program internally and support planned activities for at least 12 months. This marks a notable shift from earlier in the year, when the firm pursued a dollar-cost-averaging strategy to accumulate Ethereum.
Weaker demand, lower selling prices, inventory impairments, and a decline in the fair value of its ETH holdings contributed to an RMB148.9 million ($21.9 million) net loss for the first half, compared to a profit a year earlier.
ASIC and AI Pivot
Intchains is now centering its recovery strategy on a next-generation mining ASIC that completed tape-out in July. The chip requires sample production and validation before a targeted commercial launch in the fourth quarter. Chief Executive Officer Qiang Ding noted that the company expects the new ASIC to contribute modestly to revenue in the second half of 2026, becoming a more meaningful driver in 2027.
Alongside hardware development, the company is evaluating AI initiatives, including potential acquisitions, as an avenue for longer-term growth and diversification. Ding indicated that the AI effort remains in the early stages, with more specific plans expected next year.
