Quick Take
- Intchains is halting plans for significant new Ethereum purchases as revenue plunges and it redirects capital toward ASIC development and AI initiatives.
- The Nasdaq-listed firm says its cash reserves can fund its next-generation chip and planned activities for at least 12 months.
- Its recovery depends on validating the new ASIC and turning early AI exploration into growth after crypto losses and inventory impairments deepened losses.
Intchains Group is pulling back from fresh Ethereum purchases after its first-half revenue collapsed by 94% and is now focused on redirecting capital toward a new mining chip and early-stage AI initiatives.
On Aug. 20, the Nasdaq-listed altcoin mining-machine maker said revenue fell to RMB11.1 million (around $1.6 million) from RMB175.6 million a year earlier. Nearly all of that came from a RMB10.9 million sale of non-core chip inventory to a related party, underscoring the weakness in its core hardware business.
Against that backdrop, Intchains said it no longer anticipates “material additional accumulation” of cryptocurrency as it prioritizes capital for developing and commercializing its next-generation ASIC and exploring AI opportunities. The company plans to maintain its existing treasury and continue generating staking yield.
The pullback from crypto buying does not appear driven by an immediate liquidity shortage. Intchains ended June with RMB461.1 million (equivalent to $68 million) of cash and short-term investments, which it says is enough to fund the ASIC program internally and support planned activities for at least 12 months.
Still, the move marks a shift from earlier this year. In February, Intchains said it was pursuing a dollar-cost-averaging strategy to steadily accumulate Ethereum, and in April Chief Executive Officer Qiang Ding said the company would continue making prudent and opportunistic purchases.
Intchains held about 9,176 units of ETH-based cryptocurrencies worth RMB 98.1 million as of June 30. As of Aug. 20, 4,556 ETH were allocated to staking, including 3,556 deposited through its Goldshell platform awaiting validator activation and 1,000 through FalconX.
The retreat from additional purchases comes as weakness in both its operating business and crypto holdings weighs on results. Cost of revenue reached RMB22.1 million, twice the company’s revenue, as Intchains impaired excess mining-machine inventory amid weaker demand and lower selling prices.
A decline in ETH also produced an RMB89.5 million ($13.2 million) fair-value loss, helping push Intchains to an RMB148.9 million ($21.9 million) first-half net loss from a RMB4.3 million profit a year earlier.
China’s February restrictions on domestic mining-machine sales added to the pressure. Intchains stopped accepting new mainland orders after regulators barred mining-machine manufacturers from providing sales and related services in the country.
ASIC and AI become the recovery bet
Intchains is now putting more weight behind a next-generation mining ASIC that completed tape-out in July. The chip still requires sample production and validation, with commercial launch targeted for the fourth quarter.
Ding said the company expects the new ASIC to contribute modestly to revenue in the second half of 2026 before becoming a more meaningful driver in 2027 as commercialization accelerates. He stated:
“It is a core part of our strategy to build a more resilient, diversified revenue base.”
He added that Intchains expects the platform to strengthen its position in purpose-built mining hardware while improving operating efficiency for customers.
The company is also evaluating AI initiatives, including potential acquisitions, as another avenue for longer-term growth and diversification. Ding said the effort remains in the early stages, with more specific plans expected next year.
Ethereum is +3.29% over the past 24 hours and currently sits at rank #2 by market cap.
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