Bitcoin ASIC manufacturer Canaan has completed a successful pilot production run in the United States, marking a major shift in its manufacturing strategy. Alongside this move, the company has officially exited its artificial intelligence (AI) chip business, citing a strategic pivot back to its core strengths: Bitcoin mining and crypto infrastructure.

A Canaan spokesperson told Cointelegraph that the US pilot mirrors the company’s Malaysia-based operations. While the firm acknowledges that costs are higher in the US, it sees this move as a long-term strategic investment aimed at building resilience and reducing dependence on overseas supply chains.

Focusing on Core Crypto Infrastructure

Canaan’s CEO and chairman, Nangeng Zhang, described the decision as a deliberate realignment toward the company’s foundational mission.

“I believe that doubling down on our core strengths in crypto infrastructure and Bitcoin mining is the most strategic path forward,” Zhang stated.

The company’s decision to abandon AI chip manufacturing reflects its intention to stay focused amid growing competition and evolving global trade dynamics. As the crypto mining landscape matures, Canaan’s return to a single-product focus is seen as a move to enhance efficiency and agility.

Tariff Pressures and Strategic Hedging

One of the primary motivations behind Canaan’s US expansion is to navigate increasing geopolitical risks, including tariffs. While Malaysia-produced ASICs are currently subject to a 10% import tariff in the US, the situation remains fluid and complex for components and raw materials.

Canaan said that manufacturing in the US offers a strategic hedge against rising trade barriers and provides flexibility in responding to market and policy changes.

“This initiative is not just a hedge against tariffs but a potential strategic investment in long-term resilience,” a company representative explained.

The firm believes that producing closer to North American customers will shorten delivery times, allow for faster responses to demand, and provide a buffer against future disruptions.

Industry-Wide Shift Toward US Production

Canaan’s move aligns with a broader trend in the Bitcoin mining hardware industry. Alongside competitors Bitmain and MicroBT, the company is joining a growing effort to establish manufacturing bases in the US. This shift reflects increasing scrutiny of Chinese tech firms and the desire to mitigate risks associated with international trade and security compliance.

Canaan noted that its devices are currently assembled in Malaysia and certified by local authorities, easing some security concerns in the US market.

“Should we expand our US production further, we intend to ensure that our operations align with evolving US standards for technology and security,” the company said.

This commitment follows the US Customs and Border Protection’s 2024 halt on thousands of Bitmain ASIC units over concerns related to US-sanctioned telecom giant Huawei. The devices were linked to Chinese chip designer Xiamen Sophgo, prompting investigations and delays.

Commercial Viability and Future Prospects

Despite the optimism, Canaan acknowledged that its US expansion will depend on achieving commercial viability. The firm is actively working to optimise its cost structure to make domestic production more sustainable. Factors such as customer demand, tariff clarity, and production efficiency will determine whether the company continues scaling its US operations.

While the exit from AI may seem like a retreat, it signifies a clearer focus for the company. As the global regulatory landscape shifts and demand for secure, compliant mining equipment grows, Canaan’s streamlined focus on Bitcoin infrastructure could offer a competitive edge.

By investing in domestic production and leaving behind non-core ventures, Canaan is betting on a future where localisation, regulatory compliance, and strategic focus define success in the crypto hardware space.