Canaan IPO: to raise $400 million or become the first AI chip maker listed in US

On the morning of October 29th, Canaan filed an IPO prospectus with the Securities and Exchange Commission today, planning to raise no more than $400 million. According to the prospectus, The total revenue of Canaan in 2018 was $394.1 million. If successful, Canaan will become China’s first independent intellectual property-controlled artificial intelligence chip maker to complete an IPO in the U.S.

嘉楠IPO:拟募资4亿美元 或成国内首家美股AI芯片厂商

130 million chip mass production plus code edge calculation s

According to the prospectus, Canaan provides supercomputing solutions primarily through dedicated chips for high-performance computing. As early as 2013, Chairman and CEO Zhang Nanxuan invented and delivered the first cryptocurrency mining machines using ASIC technology, and gradually accumulated ASIC design experience in preparation for research and development involving AI chips.

In the first half of 2019, Canaan was the world’s producer of bitcoin miners, selling 21.9 percent of the world’s total mining machines, according to research firm Frost and Sullivan.

After 2016, Jianan gradually transitioned to AI, into the edge side of the AI chip field. “Edge-side chips are not as good as cloud data centers, and the power consumption limits are very strict, ” Zhang said. This also means that there are very many opportunities for innovation in the edge sector”.

In September 2018, it launched the first-generation AI Chip Vision K210, streamlining its relatively large instruction set, becoming the first company in the industry to offer commercial edge computing AI chips based on RISC-V architecture. According to reports at the time, the chip consumption power is only 0.3W, lightweight network structure for the rise of a domestic AIoT provides the technical conditions.

The prospectus also showed that Canaan’s total revenue in 2018 was $394.1 million, up 106.8 percent from 2017.

At the product level, more than 130 million ASIC chips were produced over a two-and-a-half-year period, while the commercial realization of ASIC design was realized in blockchain applications, and at the technical level, ASIC’s performance was greatly improved in terms of low voltage, energy-efficient operation and high computing density. Become a key factor in the development of blockchain and AI solutions.

“The development of aiintelligence technology, particularly those related to edge computing, and the acceptance of ASIC in AI applications are critical to our future success in product diversification,” Mr Garnan said in the prospectus.

3rd generation 12nm self-research chip to be pushed in 2020

In 2017, “artificial intelligence” was written into the government’s work report for the first time, and there is a lot of room for industry development. AI chip has become the core competitiveness of technology enterprises.

According to CICC Research, the overall AI chip market will reach $6.27 billion in 2017 and $59.62 billion by 2022, with a market size of 10 times in five years.

In the prospectus, Canaan said that China’s AI chip market is expected to continue to grow in the next few years, a favorable policy environment, strong investment in capital, vertical landing of the scene will become an important driving force.

It was revealed that in 2016, Canaan has mastered 16nm chip technology, plans to launch the second generation of 28nmAI chip by the end of 2019, next year will launch the third generation of self-research 12nm AI chip, when its calculation power will be much higher than the average of the mainstream computing power, which will also provide a guarantee for the construction of power AI.

Behind the development of self-research chips is the support of technology patents. As of June 30, 2019, Canaan had registered 59 patents in China, including two invention patents, 46 utility model patents and 11 design patents, according to the prospectus.

It is worth noting that the development of 5G technology will improve the speed and efficiency of data transmission from the edge to the cloud, which will also be a fuel booster to drive the development of edge AI.

Zhang Nanxuan has high expectations for 5G. Earlier, he said in an interview with Sina Technology, 5G can not only expand the number of connections, but also give a relatively stable connection, “end and cloud, the two always want to achieve interconnection, in the 5G era, if the problem of connectivity can be completely resolved, the development of end-side chips will have a great role in promoting.”

Focus on the 5 directions of the future Will build AI SaaS platform

Zhang Nanxuan believes that doing edge side chip is “dancing with shackles”, to power consumption and cost under strict constraints, and constantly improve computing power, and to adapt the scene, and constantly improve the specificity of the chip.

In addition to the continuous power chip, Canaan also disclosed five directions and strategies in the prospectus:

First, strengthen and consolidate your position in supercomputing solutions.

Second, IC solutions will continue to be introduced to deliver higher performance for blockchain and artificial intelligence applications through customized software development and services. In addition, for AI products, the performance and functionality of AI chips will continue to be improved and the overall AI solution will be provided.

Third, new AI products will continue to be introduced. The second generation 28nm AI chip product is currently being developed and plans to begin mass production of the second generation of the chip in the first quarter of 2020. At the same time, the third generation of 12nm AI chips is planned for the second half of 2020.

Fourth, improve the AI platform business model. The plan is to create an AI SaaS platform using AI chips, providing an optimized combination of AI chip models, algorithms, custom software, and user interfaces to gradually complete an open ecosystem.

Fifth, continue to expand overseas business. There are plans to set up overseas offices and seek strategic overseas investment opportunities through acquisitions to help achieve expansion objectives.

At present, the integrated application of blockchain technology plays an important role in the new technological innovation and industrial transformation, which means that blockchain technology has officially become a national industry. Once the listing is successful,  Canaan will also become the true ” first stock in global blockchain”.

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