Intel Halts Production of Bitcoin Mining Chips a Year After Launch

Intel Corp. – Intel has announced that it will no longer be producing its line of bitcoin mining chips, a year after their launch. This move follows a trend of chip manufacturers, such as Nvidia Corp., who suffered losses due to the cryptocurrency market collapse.

Intel aims to stop accepting orders for its Blockscale series by October 20th of this year, and delivery is expected to end by April 20th of next year. As part of its IDM 2.0 plan, Intel will be outsourcing the manufacturing of its chips to external clients while increasing its own output of smaller, faster chips.

Initially, Intel’s processors were purchased by companies such as Argo Blockchain, Block Inc., Hive Blockchain Technologies, and GRIID Infrastructure. However, the decision to halt production of their bitcoin mining chips is in line with Intel’s broader shift towards producing chips for other sectors, such as artificial intelligence and 5G networks. This change in focus may help Intel stay ahead in the market and adapt to the evolving needs of the technology industry.

In December 2022, Hive Blockchain, a Canadian Bitcoin mining company, utilized Intel’s Bitcoin-mining ASICs to mine 213.8 BTC, equivalent to $3.15 million. Although Intel’s Blockscale 1000-series chips provide improved efficiency and profitability, the company’s operational income costs increased by approximately 50% Year-on-Year (YOY) in 2022 to $1.7 billion from $1.2 billion in 2021.

Intel’s annual report shows that these operational expenses were “related to increased inventory reserves taken and investments” in the company’s product roadmap. To meet its 2022 commitment of “delivering five technology nodes in four years,” which includes the first Intel Blockscale ASIC, Intel aimed to advance its IDM 2.0 plan by “spending in production capacity around the world.”

However, Intel’s 2022 results were impacted by COVID-19 supply chain shutdowns in China, as well as the unpredictable macroeconomic environment caused by inflation and the Ukrainian conflict. As a result, the company has discontinued support for the Intel Blockscale 1000 Series ASIC while continuing to invest in IDM 2.0 and assist its Blockscale customers.

In conclusion, while Hive Blockchain’s successful utilization of Intel’s Bitcoin-mining ASICs demonstrates their profitability, Intel’s operational income costs increased significantly in 2022. Despite this, Intel remains committed to advancing its IDM 2.0 plan and supporting its Blockscale customers, despite discontinuing support for the Intel Blockscale 1000 Series ASIC.