At the end of October, Jia Nan Zhizhi submitted a prospectus to the US Securities and Exchange Commission. After the third update of the prospectus on November 14, Jianan Zhizhi plans to list on Nasdaq on November 21, the stock code " CAN". The latest prospectus shows that the funds raised by Jianan Zhizhi have been adjusted to a maximum of US$400 million to US$90 million to US$110 million, and the price per share is US$9-11, compared with their previous IPO application on the Hong Kong Stock Exchange. It has shrunk dramatically, reducing it by about 70%.
In addition, although Jianan Zhizhi's revenue of more than 99% was contributed by the sale of Bitcoin mining machines, Jia Nan Zhizhi always positioned himself as a focus on AI chip development and production during the application for IPO. Semiconductor companies" and "leading supercomputing solution providers."
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What kind of chemical reaction can the first encounter of "Mineral Machine First" and Nasdaq encounter?
01 Looking back at Jia Nan’s past
Perhaps at the beginning, Zhang Nanzhen did not think that "Pumpkin Zhang" and "Jia Nan Zhi Zhi" would become the most important labels for his two different stages.
He also did not think that from the first generation of FPGA mining machines, the first ASIC mining machine, to the world's first 7nm mass production chip, and then to becoming the first mining machine manufacturer to submit a prospectus to the Hong Kong Stock Exchange, he And his Jia Nan Zhi Zhi seems to always walk in front of everyone, stepping on the right vent, but for various reasons, has not become a real industry "first mover" until this time went to the United States to go public.
At that time, Zhang Nanxuan, while being decapitated in the vast sea of books, was addicted to the bloody world of the anime. He is addicted to station B, and even rumors that he can watch more than 500 anime a year.
Technical men, otaku, these seemingly ugly words, but it is the most authentic life portrayal of Zhang Nanxuan. Until 2011, the free magical bitcoin broke into his life, letting him see the possibility of changing a more parallel parallel world than the anime's different dimension world.
In 2011, Zhang Nanxun, who was born in technology, began to research the bitcoin mining machine and appeared in the bitcoin community bitcointalk.org with the ID of “ngzhang”, an early forum for Bitcoin created by Satoshi Nakamoto and often discussed.
In November of this year, ngzhang published "FPGA development board – Icarus" in the community, and showed the believers in the Bitcoin world the FPGA (Field Programmable Gate Array) mining machine Icarus, which is the bitcoin mining into the FPGA. The first product of the era. Icarus is the name of a heroine in Zhang Nan's favorite anime "The Object of Heaven".
At this point, Bitcoin mining experienced the initial computer CPU mining and GPU mining, and officially entered the FPGA era in 2011.
In the world of Bitcoin, there has also been a "Pumpkin Zhang".
But the accident is always unexpected. In June 2012, the American Butterfly Lab announced that it was preparing to develop an ASIC mine that was far superior to the mainstream FPGA miners at that time. If successful, Butterfly Labs will be able to use the new mining machine to reduce the impact of other mining machines on the market, and have the opportunity to control the computing power of the Bitcoin network by more than 51% and gain control over the free bitcoin world.
Even if Butterfly Labs does not launch a 51% power attack on the Bitcoin network, the potential threat has left the Bitcoin community uneasy. To crush this threat, either the development of the Butterfly Lab has failed completely, or others have developed ASIC mining machines faster, bringing the entire bitcoin mining industry into the ASIC era.
In order to defend the world of Bitcoin, at the time, "Pumpkin Zhang" Zhang Nanyi and "Baked Cat" Jiang Xinyu in the "Four Great Kings" of the Chinese currency circle announced the development of ASIC mining machines.
Zhang Nanzhen also encountered another key person at this time: Chinese-American programmer Yifu Guo. The two hit it off and decided to jointly develop the ASIC mining machine.
In September of the same year, Zhang Nanxuan and Guo Yifu showed samples of their ASIC mining machines. Zhang Nanxuan, who is passionate about animation, named the new mining machine "Avalon".
Avalon is the strongest defensive weapon in the Japanese anime "Fate". It is also the nickname of the legendary world of Arthur, the ultimate habitat of King Arthur. For Pumpkin Zhang, Avalon will be his strongest weapon to "maintain peace in the world" and resist the butterfly mining machine. It is also the habitat of his soul, pouring his expectations and dreams.
In order to raise funds for research and development, Zhang Nanxuan and Guo Yifu decided to pre-sale the mining machine, and set the "overlord clause" that seems to be somewhat unbelievable now: no refund, delivery time and no after-sales guarantee in any case.
Such "unequal terms" did not scare off the miners who were paranoid at the time. The first 300 miners that sold for $1,299 were quickly sold out.
However, the development of the ASCI mining machine is not as easy as imagined. Although the Butterfly Lab repeatedly delayed the delivery time of the ASIC mining machine, it gave Zhang Nan a breathing space. However, Avalon, who was originally scheduled to appear at the end of 2012 by Zhang Nanzhen and Guo Yifu, also encountered an unknown technical bottleneck.
For a long time, Zhang Nanyu hoped that the instructor would apply for a year of school suspension and concentrate on solving the technical problems of the ASIC mining machine, but he was ruthlessly rejected. After many unsuccessful communication, Zhang Nanzhen made a bold decision: If so, then drop out of school.
The 29-year-old Zhang Nanxuan, with the conviction of defending the bitcoin world, has left the ivory tower of countless people's dreams.
After several storms, on the occasion of the Lunar New Year in 2012, the world's first ASIC mining machine, Avalon, was officially launched and delivered to users.
According to later recalls, each Avalon mine machine can dig up 5-7 bitcoins, and can earn tens of thousands of dollars a day. For a time, Luoyang paper expensive, many miners can not wait in front of the computer for a few days before and after the sale of Avalon.
After the success of Avalon, the pumpkin Zhang gradually faded out of people's vision, and Zhang Nanzhen opened the new Jianan Zhizhi journey.
Zhang Nanxuan and his partner Li Jiaxuan each invested 100,000 yuan to create "Beijing Jianan Zhizhi Information Technology Co., Ltd.".
The word "Jia Nan" comes from the "Jia" in Li Jiaxuan's name and the "Nan" in Zhang Nanxuan's name.
Thanks to the reputation of “Pumpkin Zhang” and Avalon, the company’s mining business is booming. However, Zhang Nanxuan made another amazing decision: to abandon the overall assembly and sales of the mining machine, focusing on chip development and production. At the same time, Jia Nan Zhizhi announced the opening of all mining machine hardware solutions except the chip.
Merchants who smelled the taste of interest, swarmed in, using the open source of Jia Nan Zhizhi, began to divide the mining machine assembly market that Zhang Nanzhen gave up, earning a lot of money. In the future, Wu Jihan, who founded the mining machine to dominate the mainland, was one of the many agents of the Avalon chip.
But the pre-sale model of the Avalon chip quickly encountered Waterloo. Jia Nan Zhizhi failed to deliver the chips on time, causing many small and medium-sized enterprises to fail to deliver the mining machines to the users on time, facing operational crisis and even closing down. The reputation of Jia Nan Zhi Zhi and Avalon, the time difference reached the extreme.
At the time, Wu Jihan also pre-purchased a batch of Avalon chips. He thought that he would make a big profit. He did not expect Zhang Nan to “hang” a hand. He was always proud of his ability to ask customers and investors. forgive.
This incident made Zhang Nanxuan become a "liar" in Wu Jihan's mouth, and planted the seeds of his own mining machine in Wu Jihan's heart. Of course, this is something.
Later, Jia Nan Zhizhi, who re-run the mining machine assembly business, once recovered from the mining machine market with the second-generation Avalon mining machine. However, at the end of 2013, the central bank and other five ministries issued the "Notice on the Prevention of Bitcoin Risk", saying that Bitcoin is not issued by the monetary authorities, does not have monetary attributes such as legal and mandatory, and is not a real currency.
With the advent of regulation, bitcoin prices have fallen rapidly, and the mining machine market has become increasingly deserted. The days of Jianan’s wisdom are sad.
In December of the same year, Liu Xiangfu added 50,000 yuan to join Jianan Zhizhi and became the third shareholder.
In May of this year, Wu Jihan and Jenke Group founded Bitumin.
In the high-speed iteration of mining machine chip technology, once a large amount of capital and personnel developed products lag behind competitors, it means that all efforts can be lost. The core competitiveness of the mining machine lies in the power and power consumption ratio (that is, the power required to dig a bitcoin).
Jia Nan’s chip technology did not lose to the mainland, but was defeated by time. In August 2015, Bitland began to pre-sell the Ant S7 mining machine, which consumes only 257.3 (W/Ths). Two or three months later, Jia Nan’s Avalon A6 mining machine was released for sale with a power consumption of 300 (W/Ths).
With a short time advantage and a weak performance advantage, Bitcoin quickly seized the market and achieved a market share of 80%. Immediately, Bitcoin launched the most popular ant S9 mining machine to date, which opened the distance with Jianan Zhizhi and became the hegemon of the mining machine world.
In the second half of 2015, it was the most difficult time for Avalon and Jia Nan. Guo Yifu, who had been responsible for the sales of the Avalon mining machine, has already left the team and gradually faded out of people's vision. At this time, Zhang Nanzhen's Jia Nan Zhi Zhi, not only to deal with pressure from rivals such as Bit China, but also need to set up a new sales team to quickly digest the mine inventory left behind.
In order to no longer eat the loss of time, on August 8, 2018, Jia Nan Zhizhi held a press conference in Hangzhou to officially release the world's first mass-produced 7 nanometer (nm) chip before the Bitland.
However, according to a blockchain report, although the 7nm chip was released first, in fact, in the market, almost no miners have seen Jianan's 7nm chip mining machine. The A10 mining machine, which was released after the release of the 7nm chip, did not use the 7nm chip, but instead returned to 16nm. According to the prospectus, Jianan's latest mining machine A11 is not equipped with 7nm chips, and Samsung's 8nm chip is suspected.
And its competitors have already realized the commercial use of 7nm and 8nm chips. The 7nm chip eventually failed to become a weapon for Jia Nan’s “overtaking”.
Jia Nan, who has survived the cold winter, is in urgent need of financing development. The early stage of the financing process was so slow that some people regarded it as a “tulip bubble”, but time gave Ji Nan’s wisdom to prove.
From 2015 to 2017, Jia Nan Yu Zhi ushered in the stage of rapid financing development.
Today, Kong Jianping, who is the co-chairman of the board of directors of Jianan Zhizhi, joined Jianan Zhizhi during this period.
Subsequently, Kong Jianping acquired a total of 3.5% of the shares in Yao Yongjie and Yingyi Investment in February 2016, and acquired a portion of Liu Xiangfu’s shares in June 2019, step by step to become the second only to Zhang Nanxuan and Li Jiaxuan. The three major shareholders.
Liu Xiangfu, the third largest sharer in the previous period, withdrew from the senior management of Jianan Zhizhi in January 2019 due to differences with the company's overall strategy.
In addition to frequent external financing, Jia Nan Zhizhi is also actively seeking listing opportunities. All of this happened after Kong Jianping joined Jia Nan.
In June 2016, Lu Yitong (300423.SZ), which listed A-share for 1 year and 4 months, began to plan the first major asset restructuring, and the object of restructuring was Jianan Zhizhi.
Luyitong plans to acquire all the shares from the 14 shareholders of Jianan Zhizhi in a cash payment of 1.061 billion yuan and a share payment of 1.999 billion yuan. The total transaction price is 3.06 billion yuan. However, the acquisition was eventually terminated due to objective factors such as the domestic market environment and regulatory policies.
After the failure of landing A shares, Jia Nan Zhizhi began to prepare for the new three board. In August 2017, Jia Nan Yu Zhi applied for the listing of the new three board. But in September of that year, the regulation of cryptocurrencies and transactions was suddenly coming. After three rounds of inquiries, in March 2018, Jia Nan Zhi Zhi eventually folded the new three boards.
In May 2018, Jia Nan was reorganized and officially submitted a prospectus to the Hong Kong Stock Exchange, becoming the first mining company to apply for landing on the Hong Kong Stock Exchange. Billion International and Bitcoin subsequently submitted IPO applications to the Hong Kong Stock Exchange. But the three major mining machine manufacturers were all rejected by the Hong Kong Stock Exchange.
On November 15, 2018, Jianan Zhizhi’s IPO application on the Hong Kong Stock Exchange expired and the listing was once again stranded.
After nearly a year of rest, Jia Nan Zhi Zhi set his sights on the US stock market. He submitted a prospectus to the US SEC on October 29, 2019, Beijing time, and plans to list on the NASDAQ.
This time, the dawn of victory is in sight. Jia Nan Zhi Zhi is about to become the first mining machine in the true sense.
02 The reality before Jia Nan’s wisdom
The good news of the blockchain industry in late October drove the price of bitcoin to rise, and the price broke through the $10,000 mark in a short period of time. However, the mining business of Huaqiang North is still deserted. In the opinion of some mining machine dealers, the short-term gains of Bitcoin have not yet boosted the business of the entire mining machine market. Everyone is actually in a wait-and-see state.
The competition in the mining industry has always been very fierce. Every market participant has been involved in an “arms race”. The performance of the miners produced by the manufacturers is constantly improving, and the market price is adjusted in time to adjust the price. Control costs. With the endless market competition in the mining industry, the competitive landscape is changing rapidly. The former mining giants Zhongbitian and Jianan Zhizhi are still struggling to maintain the top two. Now the status of Yibang International has been upheld by the rising stars. Micro and core technology replaced the trend.
However, this business of Jianan Zhizhi selling bitcoin mining machine did not bring profit, but it has been losing money since the second half of 2018, which means that Jianan Zhizhi has been doing business in the main business for nearly a year. The sale of the loss. It can be said that the business of many bitcoin mining machine manufacturers is directly affected by the fluctuation of bitcoin price, so the performance is extremely cyclical and unsustainable.
Xu Yingkai, founder of blockchain venture capital firm BlockVC, said in an interview that the cyclicality of digital assets has led to uncertainty in the sustainability of mining machinery manufacturers. For mining machine manufacturers, the development of mining machines The core of the upgrade, supply chain integration, mining channel sales and capital chain management.
In 2018, Jia Nan Zhizhi made a major breakthrough in chip design, achieving the world's first mass production based on self-developed 7-nanometer chips. However, at present, we have not seen the shadow of the 7-nanometer chip on any Avalon mining machine. The latest Avalon A11 series mining machine has not used the 7-nanometer ASIC chip. In the comparison of the technical strength of the mining machine, Jia Nan Zhizhi It has fallen behind Bitma's Shenma series mining machine and Bitland's ant series mining machine.
In addition, Jianan Zhizhi's prospectus shows that as of the end of June 2019, its advance payment reached 530 million yuan, nearly three times more than the end of 2018. It is widely believed that this is a sign that Jianan Zhizhi has placed a large number of orders with chip suppliers. However, some media pointed out that because the financing ability is not as good as that of the competitors, Jianan Zhizhi has a weak voice in the process of cooperation with TSMC. In the prospectus, Jia Nan said, “The industry-leading fab has limited production capacity and will be limited to customers who have prepaid goods. Bitcoin has provided more advances with financing advantages, so it can get more As for the production lines of multiple power products, Bitcoin has sold more products. According to rumors, TSMC and Bitland have signed a secret gambling agreement for 7nm chips, so 7nm chips are no longer available to other miners.
The prospectus also revealed that Jianan Zhizhi's latest product A11 uses a suspected Samsung 8nm chip and does not use a 7nm chip. Due to the impact of the trade war between Japan and South Korea, Samsung has been embargoed, so product shipments have been affected. Therefore, Jianan Zhizhi could not get enough high-quality production capacity at the two major chip suppliers of TSMC and Samsung.
Recently, in the official website of Jianan Zhizhi, A8, A9 and A10 mining machines have a large number of stocks, which can be delivered within 7 working days. The large amount of inventory deductions and the drastically shortened delivery time seem to be an effort by Jianan Zhizhi to prepare for the listing of the revenue.
03 Is the future of AI blessing worth looking forward to?
On May 17, 2019, the founder of Jia Nan Zhizhi, Zhang Nanxuan, revealed to the media at the World Semiconductor Congress in 2019 that Jia Nan’s current investment in AI chips is similar to that invested in mining machines. In 2019, Jia Nan Qizhi’s artificial intelligence chip revenue is expected to be tens of millions of yuan. It is planned to use three years to achieve a 1:1 ratio of mining machine and artificial intelligence business. The two have reached a basic balance and expressed that they are very optimistic about the artificial intelligence market.
In the office exhibition hall of Jia Nan Zhi Zhi, the first thing to see is not the Avalon mining machine, but the 3D naked-eye TV equipped with the latest chips. The chip is "true love" for Jia Nan.
According to different application scenarios, artificial intelligence chips are mainly divided into two types: cloud chips and end chips. The end-side AI chip has higher requirements on energy consumption, on the one hand, the performance requirement is high, on the other hand, the cost and power consumption are low. For Jia Nan Zhizhi, who started the mining machine chip, it seems that the focus side AI chip has more advantages.
In 2016, with the Alpha dog detonating artificial intelligence, Jia Nan Zhizhi indicated to the outside world that he is developing an artificial intelligence end-side computing chip. According to Kong Jianping, the chairman of the board of directors, since 2016, Jia Nan’s investment in artificial intelligence chips has exceeded the blockchain.
In September 2018, Jia Nan Zhizhi released its first generation of artificial intelligence chip, the KIT K210, which was mass-produced in the fourth quarter of 2018. The Kanji K210 uses its fully self-developed neural network accelerator IP and has a machine. Visual and speech recognition capabilities for high-speed convolutional neural network calculations at ultra-low power consumption. Since then, Kanji K210 has become the star product of Jia Nan Zhizhi on artificial intelligence chips. At present, this chip is mainly used in the field of AIOT (AI+IoT), which can provide solutions for smart home, smart community, smart education and other fields.
In September 2019, Jianan Yuzhi joined Shanghai Haier Zhigu and Hainayun Technology to establish the Artificial Intelligence Research Institute, which continued to deepen the application of artificial intelligence edge computing chips in the AIOT field.
At present, AioT is also highly sought after by giant companies. Huawei announced the AioT strategy for the first time, and Jingdong upgraded its IoT business to Xiaojingyu's AioT ecosystem. Xiaomi will position its strategy for the next five years as a “mobile +AIoT” dual-engine drive strategy.
According to the prospectus, the target customers of Jianan Zhizhi artificial intelligence chip are companies in the Internet of Things industry, and plan to increase sales investment to cover the major customer groups in the Internet of Things.
According to the latest prospectus disclosure, as of the third quarter of 2019, Jianan Zhizhi’s revenue on artificial intelligence products was only 1.4 million yuan. This is in line with Zhang Nan’s “2019, artificial intelligence chip revenue is expected to be tens of millions of yuan. The goals of "level" are far apart. In addition, as of the third quarter of 2019, Jianan Zhizhi's artificial intelligence products accounted for less than 0.15% of revenue, blockchain product revenues exceeded 99.85%, and revenues were highly dependent on mining machines.
After three years, did Jia Nanzheng successfully achieve the goal of 1:1 income from mining machinery and artificial intelligence business?
Regardless of whether it is from the development of the global market or from the relevant domestic policy environment, the artificial intelligence chip is a blue ocean market with great potential facing Jianan Zhizhi.
According to research firm Frost & Sullivan, by the end of 2023, the global artificial intelligence chip market is expected to reach approximately 221.6 billion yuan, an increase of 45.1% over the 3418 billion in 2018.
In April 2018, Jiang Yang, vice chairman of the China Securities Regulatory Commission, said in the investigation of Jia Nan Zhi Zhi, "No matter what your chip is used, it is essentially a chip company. I hope you will be listed in China."
Recently, Zhang Nanxuan also said in an interview with China Enterprise Magazine that the future chip center is in China. At present, the domestic chip environment is relatively good. Many policy inclinations, including the national industrial plan, have invested a lot in the chip industry.
However, from the research and development of mining machine chips to the development of artificial intelligence chips, it seems that there is also a huge risk to Jia Nan.
As mentioned in the prospectus, "As ASICs may not be able to evolve into mainstream solutions for AI technology and applications, we may not be able to leverage ASICs to grow in the AI technology and application markets. If the AI market does not evolve as expected, and We cannot penetrate the new application market, and our future revenues and profits may be significantly and adversely affected."
Zhang Nanxuan also said in public that the design and manufacture of artificial intelligence chips requires a lot of energy, and the final application scenario is also very important.
Artificial intelligence chips need to invest huge R&D investment. According to the disclosure of the prospectus, Jianan Zhizhi did not increase R&D investment. As of the third quarter of 2019, Jianan’s R&D investment was 105 million yuan, compared with 2018. In the same period, 138 million yuan fell by 24%.
Relevant media used Jianan Zhizhi's 2018 mining machine revenue to estimate the artificial intelligence business income after three years. According to the goal of 1:1 mining and artificial intelligence business income after three years, after three years, Jia Nan Zhizhi The revenue of artificial intelligence business needs to reach 2.698 billion yuan, while the domestic artificial intelligence unicorn enterprise defiance technology has a revenue of slightly over 1.4 billion yuan in 2018.
In this way, for Jia Nan Zhi Zhi, it is not easy to seize the track of artificial intelligence chips.
Observing the actual development of the field of artificial intelligence chips, whether it is the technology giants such as NVIDIA, Google, Intel, etc., or the unicorn enterprises such as Cambrian, Defiance Technology, or the frontal competitors such as Bitland, have made efforts In the field of artificial intelligence chips, the track of artificial intelligence chips has become very crowded.
Although the policy environment is prosperous and the development potential is huge, in the face of high R&D investment and strong competitors, Jia Nan Zhizhi can continue to highlight the encirclement after the occupation of the “mining machine” and seize the development of artificial intelligence chips. Highland?