The first-generation Blockscale 1000-series Bitcoin mining ASICs were discontinued by Intel on April 18, even though the chips increased revenue in 2022 from 2021 and improved efficiency.
The action was taken around a year after Intel unveiled its standalone crypto mining processor, which was claimed as being superior and energy-efficient to top-tier ASICs.
In an interview with Tom’s Hardware (opens in new tab), Intel explained that the decision was made as part of a larger IDM 2.0 strategy that has seen the company tighten its belt and concentrate on its core business and products.
IDM 2.0 is the term used to describe Intel’s strategy of outsourcing the production of goods like graphics cards and chipsets to outside foundries.
Argo Blockchain, Block (formerly Square), GRIID Infrastructure, and Hive Blockchain were recognized as Intel’s initial clients for its Blockscale ASIC (application-specific integrated circuit), which is expected to begin shipping in the third quarter of 2022.
Later, Hive Blockchain praised Intel’s processors for being crucial in boosting the effectiveness of its ASIC fleet.
Hive Blockchain, a Canadian Bitcoin mining company, used Intel Bitcoin-mining ASICs to mine a total of 213.8 BTC, or $3.15 million, in December 2022.
Although Intel’s Blockscale 1000-series processors offer enhanced efficiency and profitability, operational income costs Year-on-Year (YOY) for the company climbed by approximately 50% to $1.7 billion in 2022 from $1.2 billion in 2021.
According to Intel’s annual report, these operational expenses were “due to increased inventory reserves taken and investments” in the company’s product pipeline.
The additional $500M in operating expenses YoY in 2022, which further supports Intel’s validity for discontinuing production of its Bitcoin mining chips, adds justification to the company’s choice.
Regarding the IDM 2.0 plan, the company stated: “Though we aggressively adjusted capital investments in 2022 to respond to changing business conditions, we still made significant investments in support of our IDM 2.0 strategy during the year.”
The crypto winter and the fall in bitcoin prices have hurt the businesses of Intel’s clients, especially those who had borrowed heavily during the bull market to swiftly grow.