Intel Bitcoin Mining Chips Discontinued Despite Chip Efficiency, Revenue Up $63M in 2022

Intel announced the end of its first-generation Blockscale 1000-series Bitcoin mining ASICs on April 18, though the chips have contributed to both efficiency and revenue growth in 2022 versus 2021.

The announcement, originally reported by Tom’s Hardware, cited “an increased focus on IDM 2.0 operations” as the rationale behind the decision to discontinue the chips.

However, the chip was part of the Accelerated Computing Systems and Graphics Group (AXG) revenue segment, which saw a $63 million increase in 2022 compared to 2021.

Intel Annual Report: AXG Earnings $B

Efficient but not cost effective

Deployed by at least one public Bitcoin (BTC) mining company through 2022, Intel Blockscale 1000-series chips have proven efficient and profitable.

In December 2022, Canadian bitcoin mining company Hive Blockchain mined a total of 213.8 BTC — worth $3.15 million — using Intel bitcoin mining ASICs.

Despite the improvement in efficiency and profitability that Intel’s Blockscale 1000-series chips offer, Intel’s operating expenses grew nearly 50% year-over-year (YOY) to $1.7 billion in 2022, from $1.2 billion dollars in 2021.

Intel Annual Report: AXG Operating Income (Loss) $B

Those operational costs were due to “increased inventory reserves and investments” in Intel’s product roadmap, according to the company’s annual report.

Intel committed to “deliver five technology nodes in four years” in 2022 — one of which was the first Intel Blockscale ASIC — and sought to accelerate its IDM 2.0 strategy by “investing in manufacturing capabilities around the world.”

Intel noted that its 2022 results “were impacted by an uncertain macroeconomic environment resulting from inflation, the war in Ukraine and COVID-19 shutdowns [its] supply chain in China.”

cause of termination

Intel’s case for discontinuing its bitcoin mining chips is supported by the additional $500 million in year-over-year operating expenses in 2022 — further establishing the finality of the company’s decision.

Regarding the IDM 2.0 strategy, the company said:

“While we aggressively adjusted capital investments in 2022 to respond to changing business conditions, we still made significant investments during the year in support of our IDM 2.0 strategy.”

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