Nasdaq-listed Intchains is pausing new Ethereum purchases after a 94% revenue decline, shifting capital to ASIC chip development and early-stage AI projects while maintaining its crypto treasury and staking activities
Intchains Group, a Nasdaq-listed manufacturer of altcoin mining hardware, is suspending plans for additional Ethereum purchases after reporting a sharp decline in revenue and shifting its business strategy toward chip development and artificial intelligence. The company's decision comes as its core mining-machine business faces significant headwinds, with first-half 2026 revenue falling 94% year-over-year to approximately $1.6 million, according to its latest financial disclosure.
Strategic Shift Away from Crypto Accumulation
Earlier this year, Intchains had signaled an intent to steadily accumulate Ethereum using a dollar-cost-averaging approach. By June 30, the company held about 9,176 units of ETH-based cryptocurrencies, valued at roughly RMB 98.1 million. However, amid deteriorating hardware sales and a challenging market environment, Intchains now says it will not make "material additional accumulation" of cryptocurrency in the near term. Instead, the company is prioritizing capital for the development and commercialization of its next-generation application-specific integrated circuit (ASIC) mining chip and for exploring new AI initiatives. Intchains will continue to hold its existing crypto treasury and generate staking yield, with 4,556 ETH allocated to staking as of August 20, including assets deposited through its Goldshell platform and FalconX.
Financial Pressures and Inventory Challenges
The company's financial results highlight the extent of the downturn. Nearly all first-half revenue came from a one-time sale of non-core chip inventory to a related party, underscoring weak demand for its main mining hardware products. Cost of revenue reached RMB 22.1 million-double its revenue-due to inventory impairments and lower selling prices. The decline in ETH's market value also led to a fair-value loss of RMB 89.5 million (about $13.2 million), contributing to a net loss of RMB 148.9 million ($21.9 million) for the first half of the year, compared to a RMB 4.3 million profit in the same period last year. Regulatory restrictions in China, which barred mining-machine manufacturers from selling to mainland customers, further pressured the business, forcing Intchains to halt new domestic orders.
Betting on ASICs and AI for Recovery
With its core business under strain, Intchains is now focusing on the development of a new mining ASIC, which completed tape-out in July and is expected to undergo sample production and validation before a targeted commercial launch in the fourth quarter. The company projects that the new chip could begin contributing modestly to revenue in the second half of 2026, with more substantial impact anticipated in 2027 as commercialization ramps up. Intchains' leadership describes this pivot as central to building a more resilient and diversified revenue base, aiming to strengthen its position in specialized mining hardware and improve customer efficiency. Alongside hardware development, Intchains is evaluating early-stage AI opportunities, including potential acquisitions, though these efforts remain in the exploratory phase with more details expected next year.
As of June 30, 2026, Intchains reported RMB 461.1 million (approximately $68 million) in cash and short-term investments, which it says is sufficient to fund its ASIC program and planned activities for at least the next 12 months. The company's ETH holdings and staking activities continue, but the shift away from new crypto accumulation marks a notable change in strategy as it seeks to navigate a difficult market and regulatory landscape.
According to Intchains' latest financial report, the company's first-half 2026 revenue dropped to RMB 11.1 million (about $1.6 million), down from RMB 175.6 million a year earlier. The firm's net loss for the period reached RMB 148.9 million ($21.9 million), driven by inventory impairments and a significant fair-value loss on its ETH holdings. As of June 30, Intchains held approximately 9,176 units of ETH-based cryptocurrencies, with 4,556 ETH allocated to staking platforms.
ASIC mining chips are custom-designed hardware optimized for specific blockchain algorithms, offering greater efficiency and performance compared to general-purpose devices like GPUs. While ASICs can provide a competitive edge in mining, their development requires substantial upfront investment and carries risks related to market demand, regulatory changes, and rapid shifts in network consensus mechanisms. For companies like Intchains, balancing crypto treasury management with hardware innovation and diversification into AI reflects the complex trade-offs facing mining hardware manufacturers in a volatile and increasingly regulated industry.
