0001104659-23-047189 | 20-F | XBRL Viewer

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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2022 shares
Document Information [Line Items]
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	001-39127
Entity Registrant Name	Canaan Inc.
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	28 Ayer Rajah Crescent #06-08
Entity Address, Country	SG
Entity Address, Postal Zip Code	S139959
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Accounting Standard	U.S. GAAP
Entity Shell Company	false
Entity Central Index Key	0001780652
Amendment Flag	false
Auditor Name	KPMG Huazhen LLP
Auditor Firm ID	1186
Auditor Location	Beijing, China
Class A ordinary shares
Document Information [Line Items]
Title of each class	Class A ordinary shares, par value US$0.00000005 per share*
Name of each exchange on which registered	NASDAQ
Entity Common Stock, Shares Outstanding	2,492,514,048
No Trading Symbol Flag	true
Class B Ordinary Shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	311,624,444
ADR
Document Information [Line Items]
Title of each class	American Depositary Shares, each representing 15Class A ordinary share
Trading Symbol	CAN
Name of each exchange on which registered	NASDAQ
Business Contact
Document Information [Line Items]
Entity Address, Address Line One	28 Ayer Rajah Crescent #06-08
Entity Address, Country	SG
Entity Address, Postal Zip Code	S139959
Contact Personnel Name	James Jin Cheng, Chief Financial Officer
City Area Code	+65
Local Phone Number	6305 6618
Contact Personnel Email Address	IR@canaan-creative.com

CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Current assets:
Cash	¥ 707,261	$ 102,543	¥ 2,684,342
Restricted cash	0	0	47,362
Accounts receivable, net			367
Inventories	1,473,990	213,708	812,363
Prepayments and other current assets	1,689,079	244,893	1,729,027
Total current assets	3,870,330	561,144	5,273,461
Non-current assets:
Cryptocurrency	87,273	12,653	20,310
Property, equipment and software, net	597,988	86,700	185,566
Right-of-use assets	29,600	4,292	30,920
Deferred tax assets	151,410	21,952	99,044
Other non-current assets	17,437	2,528	2,956
Non-current financial investment	20,000	2,900	20,000
Total non-current assets	903,708	131,025	358,796
Total assets	4,774,038	692,169	5,632,257
Current liabilities:
Accounts payable	116,333	16,867	143,441
Contract liabilities	4,613	669	1,340,731
Income tax payable	50,340	7,299	148,719
Accrued liabilities and other current liabilities	336,705	48,814	437,394
Lease liabilities, current	16,118	2,337	14,819
Total current liabilities	524,109	75,986	2,085,104
Non-current liabilities:
Lease liabilities, non-current	10,039	1,456	16,292
Warrant liability			66,347
Other non-current liabilities	4,163	604	5,824
Total liabilities	538,311	78,046	2,173,567
Contingencies (Note 15)
Shareholders' equity:
Ordinary shares (US$0.00000005 par value; 1,000,000,000,000 shares authorized; 2,804,138,492 shares issued, 2,577,386,552 and 2,496,001,757 shares outstanding as of December 31, 2021 and 2022, respectively)	1		1
Subscriptions receivable from shareholders	(1)		(1)
Treasury stocks (US$0.00000005 par value; 226,751,940 and 308,136,735 shares as of December 31, 2021 and 2022, respectively)	(380,538)	(55,173)	(231,281)
Additional paid-in capital	3,298,531	478,242	2,891,134
Statutory reserves	102,586	14,874	97,420
Accumulated other comprehensive loss	(4,844)	(702)	(101,925)
Retained earnings	1,219,992	176,882	803,342
Total shareholders' equity	4,235,727	614,123	3,458,690
Total liabilities and shareholders' equity	¥ 4,774,038	$ 692,169	¥ 5,632,257

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Ordinary shares, par value	$ 0.00000005	$ 0.00000005
Ordinary shares, shares authorized	1,000,000,000,000	1,000,000,000,000
Ordinary shares, shares issued	2,804,138,492	2,804,138,492
Common stock shares outstanding	2,496,001,757	2,577,386,552
Treasury stocks, par value	$ 0.00000005	$ 0.00000005
Treasury stock, shares	308,136,735	226,751,940

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
Revenues
Mining revenue	¥ 218,639	$ 31,700	¥ 21,688
Leases revenue			7,556	¥ 18,963
Other revenues	705	102	347	901
Total Revenues	4,378,907	634,882	4,986,706	447,686
Cost of revenues	(2,831,107)	(410,472)	(2,135,961)	(409,922)
Gross profit	1,547,800	224,410	2,850,745	37,764
Operating expenses:
Research and development expenses	(546,642)	(79,256)	(332,846)	(140,041)
Sales and marketing expenses	(62,966)	(9,129)	(100,467)	(19,980)
General and administrative expenses	(580,523)	(84,168)	(589,107)	(131,624)
Impairment on cryptocurrency	(52,959)	(7,678)
Total operating expenses	(1,243,090)	(180,231)	(1,022,420)	(291,645)
Income (loss) from operations	304,710	44,179	1,828,325	(253,881)
Interest income	15,938	2,311	7,310	3,153
Change in fair value of warrant liability	24,598	3,566	190,178	0
Investment income	0		277	5,844
Interest expense				(3,587)
Foreign exchange gains, net	242,957	35,225	17,890	2,419
Other income, net	22,156	3,212	6,410	30,958
Income (loss) before income tax expense	610,359	88,493	2,050,390	(215,094)
Income tax expense	(124,002)	(17,979)	(50,108)	0
Net income (loss)	486,357	70,514	2,000,282	(215,094)
Foreign currency translation adjustment, net of nil tax	97,081	14,075	(22,145)	(24,238)
Total comprehensive income (loss)	¥ 583,438	$ 84,589	¥ 1,978,137	¥ (239,332)
Weighted average number of shares used in per Class A and Class B ordinary share calculation:
- Basic \| shares	2,560,106,403	2,560,106,403	2,521,667,815	2,345,703,779
- Diluted \| shares	2,577,892,069	2,577,892,069	2,576,157,247	2,345,703,779
Net earnings (loss) per Class A and Class B ordinary share (cent per share)
- Basic \| (per share)	¥ 19.00	$ 2.75	¥ 79.32	¥ (9.17)
- Diluted \| (per share)	¥ 18.87	$ 2.74	¥ 77.65	¥ (9.17)
Share-based compensation expenses were included in:
Share-based compensation expenses	¥ 407,397	$ 59,067	¥ 491,461	¥ 2,950
Cost of revenues
Share-based compensation expenses were included in:
Share-based compensation expenses	990	144	269
Research and development expenses
Share-based compensation expenses were included in:
Share-based compensation expenses	66,065	9,579	99,173	652
Sales and marketing expenses
Share-based compensation expenses were included in:
Share-based compensation expenses	16,263	2,358	8,240	41
General and administrative expenses
Share-based compensation expenses were included in:
Share-based compensation expenses	324,079	46,987	383,779	2,257
Product
Revenues
Revenues	¥ 4,159,563	$ 603,080	4,956,891	427,522
Maintenance service revenue
Revenues
Revenues			¥ 224	¥ 300

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Foreign currency translation adjustment, tax	¥ 0	¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands	Ordinary Shares CNY (¥) shares	Subscription Receivables From Shareholders CNY (¥)	Treasury Stock CNY (¥) shares	Additional Paid-in Capital CNY (¥)	Statutory Reserves CNY (¥)	Accumulated Other Comprehensive Loss CNY (¥)	Retained Earnings (Accumulated Deficit) CNY (¥)	CNY (¥) shares	USD ($) shares
Beginning Balance at Dec. 31, 2019	¥ 1	¥ (1)		¥ 1,631,609	¥ 97,307	¥ (55,542)	¥ (980,579)	¥ 692,795
Beginning Balance (in shares) at Dec. 31, 2019 \| shares	2,350,123,270		22,098,952
Share repurchased \| shares	(25,799,190)		25,799,190
Share Repurchase			¥ (23,915)					(23,915)
Share-based compensation expense				2,950				2,950
Foreign currency translation						(24,238)		(24,238)
Vesting of restricted share units and restricted shares				60				60
Vesting of restricted share units and restricted shares (in shares) \| shares	4,002,052		(4,002,052)
Profit appropriations to statutory reserves					0
Net income							(215,094)	(215,094)
Ending Balance at Dec. 31, 2020	¥ 1	(1)	¥ (23,915)	1,634,619	97,307	(79,780)	(1,195,673)	432,558
Ending Balance (in shares) at Dec. 31, 2020 \| shares	2,328,326,132		43,896,090
Share repurchased \| shares	(34,683,225)		34,683,225
Share Repurchase			¥ (103,543)					(103,543)
Share-based compensation expense				491,461				491,461
Foreign currency translation						(22,145)		(22,145)
Vesting of restricted share units and restricted shares				86				86
Vesting of restricted share units and restricted shares (in shares) \| shares	101,574,270		(101,574,270)
Profit appropriations to statutory reserves					113		(113)
Repurchase of vested employee restricted share units for tax withholding			¥ (150,705)					(150,705)
Repurchase of vested employee restricted share units for tax withholding(Shares) \| shares	(33,255,495)		33,255,495
Resale of vested employee restricted share units for tax withholding			¥ 46,882				(1,154)	45,728
Resale of vested employee restricted share units for tax withholding (in Shares) \| shares	13,043,895		(13,043,895)
New issuance of ordinary shares and warrants				764,968				764,968
New issuance of ordinary shares and warrants(Shares) \| shares	202,380,975		70,833,345
Issuance of ordinary shares as a reserve for share-based compensation awards \| shares			158,701,950
Net income							2,000,282	2,000,282
Ending Balance at Dec. 31, 2021	¥ 1	(1)	¥ (231,281)	2,891,134	97,420	(101,925)	803,342	¥ 3,458,690
Ending Balance (in shares) at Dec. 31, 2021 \| shares	2,577,386,552		226,751,940					2,577,386,552	2,577,386,552
Share repurchased \| shares	(154,614,975)		154,614,975
Share Repurchase			¥ (253,079)					¥ (253,079)
Share-based compensation expense				407,397				407,397
Foreign currency translation						97,081		97,081	$ 14,075
Vesting of restricted share units and restricted shares (in shares) \| shares	53,018,580		(53,018,580)
Profit appropriations to statutory reserves					5,166		(5,166)
Repurchase of vested employee restricted share units for tax withholding			¥ (31,097)					(31,097)
Repurchase of vested employee restricted share units for tax withholding(Shares) \| shares	(17,102,175)		17,102,175
Resale of vested employee restricted share units for tax withholding			¥ 134,919				(64,541)	70,378
Resale of vested employee restricted share units for tax withholding (in Shares) \| shares	37,313,775		(37,313,775)
Net income							486,357	486,357	70,514
Ending Balance at Dec. 31, 2022	¥ 1	¥ (1)	¥ (380,538)	¥ 3,298,531	¥ 102,586	¥ (4,844)	¥ 1,219,992	¥ 4,235,727	$ 614,123
Ending Balance (in shares) at Dec. 31, 2022 \| shares	2,496,001,757		308,136,735					2,496,001,757	2,496,001,757

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Cash flows from operating activities
Net income (loss)	¥ 486,357	$ 70,514	¥ 2,000,282	¥ (215,094)
Adjustments for:
Revenue recognized on acceptance of cryptocurrency	(238,596)	(34,593)	(21,688)
Cost recognized on payment of cryptocurrency	56,877	8,246
Realised gain on sale of cryptocurrency	1,167	169
Depreciation and amortization of property, equipment and software	226,419	32,828	11,009	11,852
Depreciation of operating lease assets			3,118	19,389
Foreign exchange gain	(13,490)	(1,956)	(9,668)	(14,094)
Provision of allowance for doubtful receivables	90	13	911	4,849
Deferred income tax benefits	(52,366)	(7,592)	(99,044)
Loss on disposal of property, equipment and software	272	39	47	96
Share-based compensation expense	407,397	59,067	491,461	2,950
Change in fair value of warrant liability	(24,598)	(3,566)	(190,178)	0
Investment income	0		(277)	(5,844)
Reduction in the carrying amount of the right-of-use assets	15,701	2,276	17,584	13,432
Interest of lease liabilities	1,342	195	1,613	1,938
Impairment charge to non-current financial investment	0		25	2,475
Impairment loss of cryptocurrency	52,959	7,678	1,061
Write-down of inventories	467,271	67,748	50,714	44,916
Write-downs of prepayments	86,216	12,500	0
Provision for reserve for inventory purchase commitments	75,847	10,997
Changes in assets and liabilities:
Accounts receivable	367	53	6,761	(4,499)
Inventories	(1,559,148)	(226,055)	(787,554)	(93,760)
Prepayments and other current assets	26,647	3,863	(1,413,497)	(99,127)
Other non-current assets	(14,090)	(2,043)	(426)	2,720
Prepaid interest expense			246	(149)
Accounts payable	(95,181)	(13,800)	106,034	(61,643)
Notes payable			(13,963)	(13,499)
Contract liabilities	(1,386,068)	(200,961)	910,343	422,100
Income tax payable	(98,482)	(14,279)	148,719
Accrued liabilities and other current liabilities	(97,270)	(14,102)	247,940	29,591
Other non-current liabilities	(1,661)	(241)	(2,196)	8,020
Lease liabilities	(20,677)	(2,998)	(20,527)	(14,322)
Net cash provided by (used in) operating activities	(1,696,698)	(246,000)	1,438,850	42,297
Cash flows from investing activities:
Payment for short-term investments				(1,334,077)
Proceeds from disposal of short-term investments			62,663	1,288,540
Purchase of property, equipment and software	(95,129)	(13,792)	(37,708)	(2,176)
Proceeds from disposal of property, equipment and software			160	637
Proceeds from disposal of cryptocurrency	64,806	9,396
Payment for non-current financial investments			(20,000)	(2,500)
Net cash provided by (used in) investing activities	(30,323)	(4,396)	5,115	(49,576)
Cash flows from financing activities:
Payment for repurchase of ordinary shares	(234,307)	(33,971)	(103,543)	(23,915)
Prepayment under share repurchase agreement			(573)	(16,146)
Repurchase of warrants	(44,282)	(6,420)
Payment for cost of issuance			(5,705)	(6,879)
Proceeds from borrowings				152,000
Repayment of borrowings			(35,000)	(217,000)
Proceeds from resale of treasury stock	70,378	10,204	45,728
Repurchase for tax withholdings on vesting of restricted share units	(157,295)	(22,804)	(24,508)
Proceeds from issuance of ordinary shares and warrants			1,029,455
Net cash provided by (used in) financing activities	(365,506)	(52,991)	905,854	(111,940)
Net increase (decrease) in cash and restricted cash	(2,092,527)	(303,387)	2,349,819	(119,219)
Effect of exchange rate changes on cash and restricted cash	68,084	9,870	(13,919)	(9,823)
Cash and restricted cash at the beginning of year	2,731,704	396,060	395,804	524,846
Cash and restricted cash at the end of year	707,261	102,543	2,731,704	395,804
Cash	707,261		2,684,342	391,310
Restricted cash	0		47,362	4,494
Total cash and restricted cash shown in the statement of cash flows	707,261		2,731,704	395,804
Supplemental disclosure of cash flow information:
Cash paid for interest			246	3,736
Cash paid for income tax	316,338	45,865	433
Supplemental disclosure of non-cash investing and financing activities:
Transfer from inventory to operating lease assets			15,169	135,276
Transfer from operating lease assets to inventory			12,051	¥ 115,887
Mining equipment transfer from inventory to property, equipment and software	485,514	70,393	146,881
Purchases of property, plant and equipment in accrued liabilities and other current liabilities	44,310	6,424
Accrued tax withholdings on vesting of restricted share units	(31,097)	(4,509)	126,198
Revenue recognized on acceptance of cryptocurrency	238,596	34,593	¥ 21,688
Cost recognized on payment of cryptocurrency	¥ 56,877	$ 8,246

Organization and Principal Activities

12 Months Ended

Dec. 31, 2022

Organization and Principal Activities

Organization and Principal Activities

1.	Organization and principal activities

Canaan Inc., an exempted company with limited liability incorporated in the Cayman Islands, through wholly-owned subsidiaries (collectively referred to as the “Company”), is principally engaged in integrated circuit (the “IC”) design and sale and lease of final mining equipment by integrating its IC products for Bitcoin mining and related components in the People’s Republic of China (the “PRC”), Singapore and other countries and regions.

As of December 31, 2022, the Company’s principal subsidiaries are as follows:


			Equity
	Date of	Place of	interest
Name of subsidiaries	incorporation	incorporation	held		Principal activities
Canaan Creative (HK) Holdings Limited	February 22, 2018	Hong Kong Special Administrative Region	100	%	Research and development of ICs
Hangzhou Canaan Intelligence Information Technology Co., Ltd.	April 9, 2013	Hangzhou, China	100	%	Research and development of ICs
Canaan Creative Co., Ltd.	April 1, 2013	Beijing, China	100	%	Research and development of ICs
Langfang Creative Technology Co., Ltd.	May 15, 2014	Langfang, China	100	%	Assembly of mining equipment and spare parts
Canaan Convey Co., Ltd.	November 2, 2017	Beijing, China	100	%	International distribution of mining equipment and spare parts
Zhejiang Avalon Technology Co., Ltd.	December 5, 2017	Hangzhou, China	100	%	Distribution of mining equipment and spare parts
Canaan Bright Sight Co., Ltd.	December 24, 2018	Beijing, China	100	%	International distribution of AI products
Canaan Creative (SH) Co., Ltd.	January 27, 2021	Shanghai, China	100	%	Research and development of ICs
Canaan Creative International PTE. Ltd	March 9, 2021	Singapore	100	%	Mining business
Canaan Creative Global Pte. Ltd.	September 18, 2021	Singapore	100	%	International headquarters, research and development of ICs, international distribution of mining equipments and spare parts
Canaan U.S. Inc.	February 1, 2022	United States	100	%	International distribution of mining equipments and spare parts, mining business

Summary of significant accounting policies

12 Months Ended

Dec. 31, 2022

Summary of significant accounting policies

Summary of significant accounting policies

2.	Summary of significant accounting policies

(a)

Basis of preparation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

(b)

Use of estimates

The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates.

The Company believes that accounting estimation of variable consideration for revenue recognition, warrant liability, valuation of deferred tax assets, write-down for inventories and prepayments, provision for reserve for inventory purchase commitments, valuation and recognition of share-based compensation reflect significant judgments and estimates used in the preparation of its consolidated financial statements.

Management bases the estimates on historical experience and on various other assumptions as discussed elsewhere to the consolidated financial statements that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from these estimates.

(c)

Consolidation

The Company’s consolidated financial statements include the financial statements of Canaan Inc. and its subsidiaries. All transactions and balances among Canaan Inc. and its subsidiaries have been eliminated upon consolidation.

Subsidiaries are those entities in which Canaan Inc. directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

(d)

Functional currency and foreign currency translation

The Company uses Renminbi (“RMB”) as its reporting currency. The functional currency of Canaan Inc. and its subsidiaries incorporated outside of the PRC is the United States dollar (“US$”), while the functional currency of the PRC entities in the Company is RMB as determined based on the criteria of Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters.

Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured at the balance sheet date exchange rate. The resulting exchange differences are included in the consolidated statements of comprehensive income (loss) as foreign exchange related gains or loss.

The financial statements of the Company are translated from the functional currency to the reporting currency, RMB. Assets and liabilities of Canaan Inc. and its subsidiaries incorporated outside of PRC are translated into RMB using the applicable exchange rates at the balance sheet date, income and expense items are translated at average exchange rates prevailing during the fiscal year. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a separate component of shareholders’ equity on the consolidated financial statement.

(e)

Convenience translation

The United States dollar (“US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers. Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the rate of US$1.00=RMB6.8972 on December 30, 2022, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on December 31, 2022, or at any other rate.

(f)

Warrant Liability

The freestanding warrants to purchase American Depositary Share (“ADSs”) at a future date were determined to be freestanding instruments that were accounted for as a liability. At initial recognition, the Company recorded the warrant liability on the consolidated balance sheets at its estimated fair value. The proceeds from issuance of ordinary shares and warrants are firstly allocated to warrant liability based on its fair value. The residual method is used to allocate the proceeds to shareholders’ equity. The warrant liability is subject to remeasurement at each reporting period and the Company adjusted the carrying value of the warrant liability to fair value at the end of each reporting period utilizing the binominal option pricing model, with changes in estimated fair value included in the change in fair value of warrant liability on the consolidated statement of comprehensive income (loss).

(g)

Fair value of financial instruments

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value include:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable, market-based inputs, other than quoted prices, for the assets or liabilities either directly or indirectly.

Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The Company’s financial instruments consist principally of cash and restricted cash, short-term investments, non-current financial investments, accounts receivable, accounts payable, short-term debts, notes payable and other liabilities.

As of December 31, 2021 and 2022, the carrying values of cash and restricted cash, accounts receivable, accounts payable and other liabilities approximated to their fair values reported in the consolidated balance sheets due to the short term nature of these instruments.

On a recurring basis, the Company measures its warrant liability at fair value.

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:


				Balance at
As of December 31, 2021	Level 1	Level 2	Level 3	fair value
Liabilities
Warrant liability	—	—	66,347	66,347

The Company values its investments in wealth management products based on quoted prices of similar products provided by banks at the end of each period, and accordingly, the Company classifies the valuation techniques that use these inputs as Level 2.

The warrants are accounted for as a liability and remeasured to fair value at the end of each reporting period utilizing the binomial option pricing model, which involves significant assumptions including the risk-free interest rate, the expected volatility, expected dividend yield and expected term (Note 11).

(h)

Cash

Cash includes cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use.


	As of December 31,
	2021	2022
RMB denominated bank deposits with financial institutions in the PRC	1,167,445	77,373
US dollar denominated bank deposits with financial institutions in the PRC	1,447,336	430,006
US dollar denominated bank deposits with overseas financial institutions	29,498	183,409
Others denominated bank deposits with overseas financial institutions	317	16,406
RMB denominated bank deposits with overseas financial institutions	—	56
Others denominated bank deposits with financial institutions in the PRC	39,746	11
Total	2,684,342	707,261

The bank deposits, including restricted cash, with financial institutions in the mainland of the PRC , Hong Kong, United States, Singapore and Kahzakhstan are insured by the government authorities up to RMB500, HKD500, USD250, SGD75 and KZT15,000 per bank, respectively. The bank deposits including term deposits and restricted cash are insured by the government authorities with amounts up to RMB11,579 and RMB20,248 as of December 31, 2021 and 2022, respectively. The Company has not experienced any losses in uninsured bank deposits and does not believe that it is exposed to any significant risks on cash held in bank accounts. To limit exposure to credit risk, the Company primarily places bank deposits with large financial institutions in the PRC mainland, Hong Kong, United States, Singapore and Kahzakhstan with acceptable credit rating.

On March 10, 2023, Signature bank was closed by the California Department of Financial Protection and Innovation. On March 12, 2023, New York State Department of Financial Services took possession of Signature Bank and appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. As of December 31, 2022, the Company held cash deposits US$1.1 million at Signature Bank. All these cash deposits have been transferred to another bank subsequent to the receivership by the end of March 2023.

(i)

Restricted cash

Restricted cash includes cash that are not readily available for the Company’s normal disbursements. Restricted cash are primarily related to cash deposits with banks and financial institutions subject to legal restrictions (note 4).

(j)

Short-term investments

Short-term investments include investments in wealth management products issued by certain banks which are redeemable by the Company at any time. The wealth management products are unsecured with variable interest rates. The Company measures the short-term investments at fair value and fair value is estimated based on quoted prices of similar products provided by banks at the end of each period. The change in fair value is recorded as investment income in the amount of RMB5,844, RMB277 and nil in the consolidated statements of comprehensive income (loss) for the years ended December 31, 2020, 2021 and 2022, respectively.

(k)

Accounts receivable

Accounts receivable are presented net of allowance for doubtful accounts. The Company uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and based on factors listed in the following paragraph. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required.

The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on general basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted.

(l)

Inventories

Inventories, consisting of finished goods, work in process, raw materials and goods in transit, which are purchased from contractual manufacturers and component suppliers. Inventories are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving and obsolete inventory, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased.

The Company considers all data available, including future demand and subsequent changes in product prices that may provide additional information about the valuation of inventories at the balance sheet date.

(m)

Cryptocurrency

Cryptocurrency is, by its nature, identifiable non-monetary assets that lack physical substance. Future economic benefit attributable to cryptocurrency is expected to flow to the Company because cryptocurrency can be exchanged to standard currencies on public trading platforms. Furthermore, the cost of the Company’s cryptocurrency assets can be measured reliably because cryptocurrency earned from mining activities can be measured with reference to the spot price to standard currencies on the date when they are earned.

The Company accounts for the cryptocurrency received from mining as intangible assets with indefinite useful life in its consolidated balance sheets because, at the time of assessment, there is no foreseeable limit to the period over which such assets are expected to generate cash flows. The Company further adopts the cost model to account for its cryptocurrency and reviews its useful life and impairment at each reporting date in accordance with ASC 350 Intangibles—Goodwill and Other. The Company accounts for cryptocurrency at cost, instead of revaluing cryptocurrency at their fair value on each accounting reference date, because the latter model is subject to inherent and substantial volatility in the value of cryptocurrency from time to time.

The Company accounts for cryptocurrency return liability at fair value, whereas accounts for the corresponding cryptocurrency at cost subject to impairment because the Company is the accounting owner of those cryptocurrency. As of December 31, 2021 and 2022, cryptocurrency return liability of RMB2,500 and nil are recorded in accounts payable, respectively.

Cost is calculated using the weighted average cost method. Gains or losses arising from the disposal of cryptocurrency are determined as the difference between the net disposal proceeds and the carrying amount of the cryptocurrency and are recognized in profit or loss on the date of disposal.

The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The recoverable amount of cryptocurrencies is based on the fair value less costs of disposal. The fair value of the cryptocurrencies is determined by using the quoted price on the cryptocurrencies platform website well recognized by the block chain users.

During the year ended December 31, 2022, the Company recognized impairment loss of RMB52,959 on cryptocurrency.

(n)

Operating lease assets

Operating lease assets consist of lease contracts for mining equipment for Bitcoin mining with customers, which are reclassified from inventories at the beginning of lease period. Operating lease assets are recorded at cost less accumulated depreciation and impairment losses. Depreciation is provided using a straight-line method over the estimated economic lives which is generally 18 months. Depreciation expenses are included in costs of revenues. The Company monitors accounting estimates relating to the depreciation period. Changes made to estimates are reflected in depreciation expense on a prospective basis. As of December 31, 2021 and 2022, the Company did not have any operating lease assets.

(o)

Property, equipment and software

Property, equipment and software are stated at historical cost less accumulated depreciation, amortization and impairment loss, if any. Depreciation and amortization is calculated using the straight-line method over the shorter of their estimated useful lives of these assets or the term of the related leases. The estimated useful lives are as follows:


Leasehold improvements		the shorter of their useful lives and the lease terms
Computers and electronic equipment		3 to 5 years
Mechanical equipment		5 years
Mining equipment		1.5 years
Motor vehicles		5 years
Software		3 years

Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property, equipment and software is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive income (loss).

Construction in progress represents assets under construction. Construction in progress is transferred to property, equipment and software and depreciation or amortization commences when an asset is ready for its intended use.

(p)

Non-current financial investment

The Company’s non-current financial investment include an equity investment without readily determinable fair value, and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock, and is measured and recorded using a measurement alternative that measures the non-current financial investment at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. The carrying value of the Company’s non-current financial investment measured under cost minus impairment were RMB20,000 and RMB20,000 as of December 31, 2021 and 2022.

During the year ended December 31, 2021 and 2022, the Company recognized impairment charge of RMB25 and nil recorded in other income, net.

(q)

Impairment of long-lived assets

For other long-lived assets including property, equipment and software, the Company evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Company assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

(r)

Contract liabilities

Cash proceeds received from customers before product delivery is recognized as contract liabilities and is recognized as revenues when revenue recognition criteria are met.

The prepayments received from customers as of December 31, 2021 and 2022 was RMB1,340,731 and RMB4,613, respectively. The revenue recognized during the years ended December 31, 2020, 2021 and 2022 for the beginning balance of contract liability was RMB8,008, RMB424,426 and RMB1,323,344, respectively.

(s)

Revenue from contracts with customers (ASC 606)

The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services.

Products revenue

The Company generates revenue primarily from the sale of mining equipment directly to a customer, such as a business or individual engaged in Bitcoin mining activities. As the Bitcoin price fluctuates, the Company may adjust the selling price of mining equipment on a weekly basis, as customers are only willing to pay for machines based on their ability to recover their investment through mining Bitcoin over a relatively short period of time. The Company’s sales arrangements usually require a full prepayment before the delivery of products. The Company started to offer credit sales to certain significant, long-standing customers in the PRC from 2018 to September 2020. The payment terms under credit sales generally consist of 50% down payment and 50% subsequent payments over a period of 90 to 180 days. With the adoption of a more dynamic pricing strategy for credit sales from 2018 to September 2020, the Company accepted a lower amount of consideration (as compared to fixed and promised consideration that is set out in the sales contracts) from its credit sales customers if the price of Bitcoin decreases in the post-sale period; hence providing implicit price concession to these customers and the ultimate amount of price concessions provided to these credit sales customers is highly dependent on the changes of Bitcoin prices.

Revenues from product sales are recorded at the sales price (transaction price), which includes an estimation of variable consideration which primarily results from implicit price concessions on credit sales. The amount of variable consideration is included in the transaction price to the extent it is not constrained and that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the estimates. If actual results in the future vary from estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period when such changes are known. With respect to the determination of variable consideration resulting from the amount of implicit price concession, since the Bitcoin market price is volatile and unpredictable and changes of Bitcoin price, will greatly affect the implicit price concessions to be provided by the Company to its credit sales customers, the Company historically has not been able to overcome the constraint on variable consideration at the time of product sale or at subsequent period-end dates until the Company has knowledge about the resolution of the uncertainty through payment by the customer. The Company uses all the subsequent information to the date of issuance of the financial statements to adjust the estimated variable consideration for the periods presented, representing updated information on the best estimate of the amount of transaction price that is probable of being received and therefore not constrained as of period-end. The Company will continue to monitor and evaluate historical data and other factors in determining the total transaction price (including implicit price concessions) that can be recognized for product sales on credit. During the years ended December 31, 2020, 2021 and 2022, the Company recognized price concessions provided to its customers in the amounts of RMB11,455, nil and nil, respectively. During the year ended December 31, 2022, the adjustment to the previously estimated variable considerations was nil (years ended December 31, 2020 and 2021: RMB14,685 and nil). The Company did not provide price concessions to customers in 2022 and 2021.

The Company recognizes products revenue at a point in time based on management’s evaluation of when the control of the products has been passed to customers. The transfer of control is considered complete when products have been picked up by or shipped to the Company’s customers.

The Company offers a standard product warranty of 360 days that the product will operate under normal use. At the time revenue is recognized, an estimate of future warranty costs is recorded as a component of cost of revenues. The reserves established are regularly monitored based upon historical experience and any actual claims charged against the reserve. The amount of total warranty costs incurred was RMB764, RMB28,826 and RMB12,742 for the years ended December 31, 2020, 2021 and 2022, respectively.

Mining revenue

The Company performs mining activities with its own mining equipment to earn cryptocurrency reward. The Company recognizes revenue when it earns the cryptocurrency as a result of its mining activity. The amount of revenue recognized is measured with reference to the spot price of the cryptocurrency to standard currencies on the date when it is earned.

Maintenance services revenue

The Company also generates a small portion of revenue from its maintenance services under separate contracts. Revenue from the maintenance service to the customer is recognized when the related services have been rendered to the customers.

(t)

Revenue from lease arrangements as lessor (ASC 842, Lease)

From July 2019, the Company started to generate revenue from the leases of mining equipment for Bitcoin mining to its customers. The leases cannot generally be extended or terminated at the customer’s discretion. However, upon the mutual agreement of the parties, the leases can be early terminated after three months. Rental charges are computed based on a time rate of machine’s type and rental period. The leases of mining equipment meet the classification of operating leases, and revenues from operating leases are recognized on a straight-line basis over the contract terms. The Company ceased leasing mining equipment in the second quarter of 2021.

(u)

Value-added-tax (“VAT”) recoverable and surcharges

Value added tax recoverable represent amounts paid by the Company for purchases. The surcharges (i.e., Urban construction and maintenance tax, educational surtax, local educational surtax), vary from 6% to 12% of the value-added-tax paid depending on the taxpayer’s location.

(v)

Cost of revenues

Amounts recorded as cost of revenues relate to direct expenses incurred to generate revenue. Such costs are recorded as incurred. Cost of revenues primarily consists of product costs, including costs of raw material, contractual manufacturers for production, labor costs, shipping and handling costs, manufacturing and depreciation, warehousing costs, inventories write-downs, prepayments write-downs, provision for reserve for inventory purchase commitments and tax surcharges.

(w)

Research and development expenses

Research and development expenses consist primarily of salary and welfare for research and development personnel, consulting and contractor expenses, testing and tooling materials and other expenses in associated with research and development personnel. The Company recognizes research and development expenses as expense when incurred.

(x)

Sales and marketing expenses

Sales and marketing expenses consist primarily of salary and welfare for sales and marketing personnel, promotion and marketing expenses and other expenses in associated with sales and marketing personnel.

Advertising expense is expensed as incurred and included in selling and marketing expenses. The advertising expenses were RMB3,701, RMB4,461 and RMB6,771 for the years ended December 31, 2020, 2021 and 2022, respectively.

(y)

General and administrative expenses

General and administrative expenses consist primarily of salary and welfare for general and administrative personnel, rental expenses and depreciation in associated with general and administrative personnel, allowance for doubtful receivables, entertainment expense, general office expense and professional service fees.

(z)

Government grants

Government grants generally consist of financial subsidies received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. The eligibility to receive such benefits and amount of financial subsidy to be granted are determined at the discretion of the relevant government authorities.

Government grants are recognized when there are reasonable assurances that the Group will comply with the conditions attach to them and the grants will be received. Government grants for the purpose of giving immediate financial support to the Group with no future related costs or obligation are recognized in the Group’s consolidated statements of comprehensive income when the grants become receivable.

RMB32,499, RMB5,699 and RMB19,226 were recognized in other income, net for the years ended December 31, 2020, 2021, and 2022, respectively. There were no significant commitment or contingencies for the government subsidies received for the years ended December 31, 2020, 2021 and 2022.

(aa)

Lease arrangement as lessee

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease.

The Company has elected not to recognize right-of-use assets or lease liabilities for leases with an initial term of 12 months or less and the Company recognizes lease expense for these leases on a straight-line basis over the lease terms.

(ab)

Employee social security and welfare benefits

Employees of the Company in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated defined contribution plan. The Company is required to contribute to the plan based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government.

The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Company’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses in the consolidated statements of comprehensive income (loss) amounted to RMB14,919, RMB27,740 and RMB47,154 for the years ended December 31, 2020, 2021 and 2022, respectively.

(ac)

Income taxes

The Company accounts for income taxes under the liability method. Under the liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax income rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that some portion or all deferred income tax asset will not be realized in the foreseeable future.

The Company evaluates its uncertain tax positions using the provisions of ASC 740-10, Income Taxes, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company recognizes in the financial statements the benefit of a tax position which is ‘‘more likely than not’’ to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense.

(ad)

Share-based compensation

The Company grants restricted shares and share options to eligible employees and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation.

Employees’ share-based compensation awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at the grant date if no vesting conditions are required; or b) for share-based awards granted with only service conditions, using the graded vesting method, over the vesting period; or c) for share-based awards with service conditions, using the graded vesting method, net of estimated pre-vesting forfeitures, over the vesting period. If the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards are reversed as occurred.

A change in any of the terms or conditions of share-based awards is accounted for as a modification of the awards. The Company calculates incremental compensation expense of a modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified at the modification date. For vested awards, the Company recognizes incremental compensation cost in the period when the modification occurs. For awards not being fully vested, the Company recognizes the sum of the incremental compensation expense and the remaining unrecognized compensation expense for the original awards over the remaining requisite service period after modification.

Share-based compensation in relation to the restricted shares is measured based on the fair market value of the Company’s ordinary shares at the grant date of the award. Share-based compensation in relation to the share options is estimated using the Binomial Model. The determination of the fair value of share options is affected by the share price of the Company’s ordinary shares as well as the assumptions regarding a number of complex and subjective variables, including the expected share price volatility, risk-free interest rate, exercise multiple and expected dividend yield. The fair value of these share options was determined by management with the assistance from an independent valuation firm.

(ae)

Statutory reserves

The Company’s subsidiaries incorporated in the PRC are required on an annual basis to make appropriations of retained earnings set at certain percentage of after-tax profit determined in accordance with PRC accounting standards and regulations (“PRC GAAP”).

Appropriation to the statutory general reserve should be at least 10% of the after tax net income determined in accordance with the legal requirements in the PRC until the reserve is equal to 50% of the entities’ registered capital. The Company is not required to make appropriation to other reserve funds and the Company does not have any intentions to make appropriations to any other reserve funds.

The general reserve fund can only be used for specific purposes, such as offsetting the accumulated losses, enterprise expansion or increasing the registered capital. Appropriations to the general reserve funds are classified in the consolidated balance sheets as statutory reserves.

There are no legal requirements in the PRC to fund these reserves by transfer of cash to restricted accounts, and the Company has not done so.

Relevant laws and regulations permit payments of dividends by the PRC subsidiaries and affiliated companies only out of their retained earnings, if any, as determined in accordance with respective accounting standards and regulations. Accordingly, the above balances are not allowed to be transferred to Canaan Inc. in terms of cash dividends, loans or advances.

The Company has made nil, RMB113 and RMB5,166 appropriations to statutory reserve for the years ended December 31, 2020, 2021 and 2022, respectively.

(af)

Repurchase of share

The Company accounts for treasury stock using the cost method. Under the cost method, when the Company’s shares are acquired for purposes other than retirement, the costs of the acquired stock will be shown separately as a deduction from the total of capital stock.

(ag)

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings (loss) per share is calculated by dividing net income (loss) attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalents shares outstanding during the period. Dilutive equivalent shares are excluded from the computation of diluted earnings (loss) per share if their effects would be anti- dilutive. ordinary share equivalents consist of the ordinary shares issuable in connection with the Company’s ordinary shares issuable upon the conversion of the share-based awards, using the treasury stock method.

(ah)

Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in shareholders’ equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders.

Comprehensive income (loss) is reported in the consolidated statements of comprehensive income (loss). Accumulated other comprehensive loss of the Company include the foreign currency translation adjustments.

(ai)

Segment reporting

Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision makers in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results including revenue, gross profit and operating profit at a consolidated level only. The Company does not distinguish between markets for the purpose of making decisions about resources allocation and performance assessment. Hence, the Company has only one operating segment and one reportable segment.

Long-lived assets consist of cryptocurrency, property, equipment and software, net, right-of-use assets and other non-current assets. As of December 31, 2022, the long-lived assets, net of RMB173,505 were located in Central Asia and RMB349,688 were located in the United States. The remaining long-lived assets were mainly located the in PRC. The Company’s revenue segregated by geographic region is disclosed below.

The geographical region of revenue generated is based on the location at which the goods delivered or the services were provided:


	For the Years Ended December 31,
Geographic region	2020	2021	2022
Indonesia	—	—	1,446,347
Malaysia	—	—	802,063
United States of America	3,528	312,722	631,243
Australia	114	361,377	405,808
Kazakhstan	47,792	711,596	386,768
Cyprus	—	633,322	243,500
Hong Kong Special Administrative Region	12,301	87,971	149,488
Canada	162	402,489	122,799
Mainland China	379,418	1,779,923	122,770
Laos	—	—	32,660
Thailand	31	289,013	18,644
Sweden	8	152,127	6,285
Other countries or regions	4,332	256,166	10,532
Total	447,686	4,986,706	4,378,907

(aj)

Recently issued accounting pronouncements

New and amended standards adopted by the Company:

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions and amending and clarify existing guidance. The guidance is effective for public business entities for annual reporting periods, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, it is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The standard is effective for the Company for fiscal years beginning after 15 December 2021, and interim periods within fiscal years beginning after 15 December 2022. Early adoption is permitted. The Company adopted this guidance on January 1, 2022 and it did not have a material effect on the Company’s consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This update is effective for annual periods beginning after December 15, 2021, and early application is permitted. This guidance should be applied either prospectively to all transactions that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or retrospectively to those transactions. The Company adopted ASU 2021-10 during 2022 using the retrospective approach. See Note 2(z) for related disclosure.

ii.

New and amended standards not yet adopted by the Company:

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 was further amended in November 2018 by ASU 2018-19 and in November 2019 by ASU 2019-10. This guidance requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability. The guidance is effective for public companies for annual reporting periods, and interim periods within those years beginning after December 15, 2019. For all other entities, it is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As the Company is an “emerging growth company” and elects to apply for the new and revised accounting standards for the fiscal year beginning after December 15, 2022. The Company does not expect the adoption of ASU No. 2016-13 to have a material effect on its consolidated financial statements.

In August 2020, the FASB issued Accounting Standards Update 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments in this Update are effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted this guidance on January 1, 2023 and it did not have a material effect on the Company’s consolidated financial statements.

Risks and Concentration

12 Months Ended

Dec. 31, 2022

Risks and Concentration

Risks and Concentration

3.	Risks and concentration

(a)

Concentration of credit risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, restricted cash, and accounts receivable. The Company places its cash and restricted cash with financial institutions with high credit ratings and quality.

The Company conducts credit evaluations of customers, and generally does not require collateral or other security from its customers. The Company establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.

Accounts receivable are unsecured and are derived from revenue earned through customers. The risk with respect to accounts receivable is mitigated by credit evaluations performed on them.

As of December 31, 2021 and 2022, accounts receivable were RMB367 and nil, respectively.

Accounts receivable concentration of credit risk is as below:


	As of December 31,
	2021		2022
Customer A	52	%	—

Customers which contributed more than 10% of total revenue are as below:


	For the Years Ended December 31,
	2020	2021		2022
Customer B	*	*		33	%
Customer C	*	18	%	22	%
Customer D	*	*		16	%

Less than 10%

(b)

Supplier concentration

For the year ended December 31, 2020, the Company’s purchases of its integrated circuits mainly from two suppliers.

For the year ended December 31, 2021, the Company’s purchases substantially all its integrated circuits from one supplier.

For the year ended December 31, 2022, the Company’s purchases substantially all its integrated circuits from three suppliers.

Although only a limited number of manufacturers for such integrated circuits are available, management believes that they could change their suppliers within these manufacturers which provided integrated circuits on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely.

Restricted cash

12 Months Ended

Dec. 31, 2022

Restricted cash

Restricted Cash

4.	Restricted cash

In December 2021, cash balance of RMB47,362 was temporarily restricted by a bank from access to the bank account during the restriction period. The restriction was subsequently released in April 2022. No cash balance was restricted as of December 31, 2022.

Inventories

12 Months Ended

Dec. 31, 2022

Inventories

Inventories

5.	Inventories

Inventories consist of the following:


	As of December 31,
	2021	2022
Raw materials	429,208	789,134
Work in process	78,354	261,436
Finished goods	304,801	423,420
Total	812,363	1,473,990

During the year ended December 31, 2021 and 2022, the Company recognized inventories write-down of RMB50,714 and RMB467,271 in cost of revenues, respectively.

For the years ended December 31, 2020, 2021 and 2022, at the beginning of lease period, the inventories reclassified to operating lease assets were RMB135,276, RMB15,169 and nil, respectively. At the end of lease period, the operating lease assets with net book value of RMB115,887, RMB12,051 and nil were reclassified to inventories for the years ended December 31, 2020, 2021 and 2022, respectively. Depreciation expense of operating lease assets of RMB19,389, RMB3,118 and nil was recorded in the cost of revenues for the year ended December 31, 2020, 2021 and 2022, respectively . The Company ceased the asset lease business in 2021 as a result of the restriction of mining activities in the PRC.

Prepayments and Other Assets

12 Months Ended

Dec. 31, 2022

Prepayments and Other Assets

Prepayments and Other Assets

6.	Prepayments and other assets

The current and non-current portions of prepayments and other assets consist of the following:


	As of December 31,
	2021	2022
Prepayments and other current assets
Prepayments to vendors (Note a)	1,427,820	1,105,194
VAT recoverable	260,571	396,701
Prepayment for repurchase of ordinary shares	15,901	24
VAT refund for export sales (Note b)	14,041	107,549
Deferred charges	—	42,943
Deposits	1,494	23,183
Others (Note c)	9,200	13,485
	1,729,027	1,689,079
Other non-current assets
Long-term rental and other deposits	2,956	17,046
Prepayments for purchase of software	—	391
	2,956	17,437

Note a: Prepayments to vendors mainly represent prepayments made to third-party suppliers for foundry services. The Company also records a write-down for the prepayment to third-party suppliers when the Company believes that the net realizable value (being the estimated selling price of final products, less the costs of completion and selling expenses) is less than carrying amount. For the years ended December 31, 2021 and 2022, the Company recorded write-downs of nil and RMB86,216 for the prepayment to third-party suppliers in cost of revenues. As of December 31, 2021 and 2022, the Company’s purchase obligation to third-party suppliers for foundry service was RMB917,346 and RMB465,709, respectively (Note 10 (a)).

Note b: Canaan Convey Co., Ltd. is entitled to VAT refund for its export sales.

Note c: During the years ended December 31, 2020, 2021 and 2022, the Company recorded provision of allowance for other receivables of RMB4,849, RMB911 and RMB90, respectively.

Cryptocurrency

12 Months Ended

Dec. 31, 2022

Crypto Currency [Abstract]

Cryptocurrency

7.	Cryptocurrency


	As of December 31
	2021	2022
Gross carrying amount	21,371	104,997
Less: Impairment of cryptocurrency	(1,061)	(17,724)
Net	20,310	87,273

Additional information about cryptocurrency consists of the following:


	For the years ended December 31,
	2021	2022
Beginning balance	—	20,310
Revenue recognized on acceptance of cryptocurrency	21,688	238,596
Cost of revenues recognized on payment of cryptocurrency	—	(56,877)
Proceeds from disposal of cryptocurrency	—	(64,806)
Realized loss on disposal of cryptocurrency	—	(1,167)
Impairment of cryptocurrency	(1,061)	(52,959)
Foreign currency translation adjustment	(317)	4,176

Ending balance	20,310	87,273

Property, Equipment and Software

12 Months Ended

Dec. 31, 2022

Property, Equipment and Software

Property, Equipment and Software

8.	Property, equipment and software

Property, equipment and software consist of the following:


	As of December 31,
	2021	2022
Cost:
Mining equipment	146,881	720,666
Computers and electronic equipment	27,492	69,698
Leasehold improvements	21,412	33,466
Mechanical equipment	7,694	855
Software	5,438	16,437
Construction in progress	665	—
Motor vehicles	470	541
Total cost	210,052	841,663
Less: Accumulated depreciation and amortization	(24,486)	(243,675)
Property, equipment and software, net	185,566	597,988

Depreciation and amortization expenses recognized for the years ended December 31, 2020, 2021 and 2022 are summarized as follows:


	For the Years Ended December 31,
	2020	2021	2022
General and administrative expenses	7,680	6,439	11,954
Research and development expenses	3,874	2,826	6,047
Cost of revenues	217	1,715	208,362
Sales and marketing expenses	81	29	56
Total	11,852	11,009	226,419

Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

The Company leases facilities under non-cancellable operating leases expiring on different dates. The terms of substantially all these leases are three years or less. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. All the Company’s leases qualify as operating leases. Variable lease cost and short-term leases (lease terms less than 12 months) are recognized as incurred.

(a)

The components of lease expenses were as follows:


	For the Years Ended December 31,
	2020	2021	2022
Lease cost:
Reduction in the carrying amount of ROU assets	13,432	17,584	15,701
Interest of lease liabilities	1,938	1,613	1,342
Expenses for short-term lease within 12 months	505	443	1,506
Total lease cost	15,875	19,640	18,549

(b)

Supplemental cash flow information related to leases was as follows:


	For the Years Ended December 31,
	2020	2021	2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	14,322	20,739	20,507
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	5,516	36,672	16,704
Lease liability settled through termination of lease:
Operating leases	427	2,590	2,493

(c)

Supplemental balance sheet information related to leases was as follows:


	As of December 31,
	2020	2021	2022
Weighted-average remaining lease term
Operating leases	1.3 year	2.4 year	1.9 year
Weighted-average discount rate
Operating lease	6.73% per annum	5.17% per annum	4.58% per annum

(d)

Maturities of lease liabilities were as follows:


Years Ending December 31,		As of December 31, 2022
2023		16,934
2024		8,762
2025 and thereafter		1,486
Total undiscounted lease payments		27,182
Less: imputed interest		(1,025)
Total lease liabilities		26,157
Amounts due within 12 months		16,118
Non-current lease liability		10,039

Accrued Liabilities and Other Liabilities

12 Months Ended

Dec. 31, 2022

Accrued Liabilities and Other Liabilities

Accrued Liabilities and Other Liabilities

10.	Accrued liabilities and other liabilities


	As of December 31,
	2021	2022
Accrued liabilities and other current liabilities
Salary and welfare payable	118,712	144,473
Provision for reserve for inventory purchase commitments (Note a)	—	75,847
Other tax payables	19,128	56,116
Customer refund	10,738	29,432
Warranty reserve (Note b)	18,026	11,953
Refund from depository bank – current	2,013	2,199
VAT payable	128,939	748
VAT received from customers related to contract liabilities	2,427	135
Withholding tax payables due to restricted share units (Note c)	126,198	—
Rental deposits.	2,120	—
Others	9,093	15,802
Total	437,394	336,705
Other non-current liabilities
Refund from depository bank – non-current	5,824	4,163

Note a: The Company entered into several contracts to purchase foundry service. These contracts represent firm purchase commitments which are evaluated for potential losses. As of December 31, 2021 and 2022, the Company’s purchase obligation to third-party suppliers for foundry service was RMB917,346 and RMB465,709, respectively.

In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2022, the Company assessed the loss contingency under the foundry service contracts taking into account the estimated selling price of mining equipment. The provision was determined by applying a methodology similar to that used in the lower of cost or net realizable value with respect to inventory, using estimates of the costs to convert raw materials into final products in order to determine net realizable value. For the year ended December 31, 2022, a provision of RMB75,847 has been recognized in cost of revenues for the Company’s inventory purchase commitments under foundry service contracts as a result of the decline in the estimated selling price of mining equipment based on the most recent subsequent selling price. No such provision was made during the year ended December 31, 2021.

Note b: For mining equipment, the Company provides its customers for 360 days warranty, subject to certain conditions, such as normal use. The Company provides for the estimated costs of warranties at the time revenue is recognized. Factors that affect the Company’s warranty obligation include product defect rates and costs of repair or replacement.

Movement of provision for warranty is as follows:


	For the year ended December 31,
	2021	2022
Accrued warranty—beginning of year	—	18,026
Accrual for warranties issued during the year	28,826	12,742
Warranty claims paid	(10,800)	(7,843)
Warranty expired	—	(10,972)
Accrued warranty—end of year	18,026	11,953

Note c: Upon vesting of the restricted share units, the Company withholds the shares to cover the statutory withholding requirement. As of December 31 2021, RMB126,198 was withheld on behalf of the employee and was subsequently remitted to the tax authority in January 2022.

Warrants

12 Months Ended

Dec. 31, 2022

Warrants

Warrants

11.

Warrants

In connection with the issuance of ordinary shares (Note 12) in May 2021, the Company also issued warrants to the investors, which entitle the investors to purchase up to an aggregate of 4,047,620 ADS (representing 60,714,300 Class A ordinary Shares) at $16.38 per ADS (representing $1.09 Class A ordinary share). Also, the Company issued warrants to two placement agents, which entitle them to purchase up to an aggregate of 674,603 ADSs (representing 10,119,045 Class A ordinary shares) at $15.75 per ADS (representing $1.05 Class A ordinary share).


			Fair Value at
	Fair Value at		June 23, 2022
	December 31, 2021		(remeasurement date)
Risk Free Rate	0.37%-0.81	%	2.32%-2.63	%
Volatility	131.47%-127.93	%	126.66%-140.39	%
Expected dividend yield	0	%	0	%
Expected term	2.3 years-3 years		1.9 years-2.1 years

On June 23, 2022, the Company entered into separate warrant repurchase agreements with all warrant holders. The Company paid US$6.6 million (equivalent to RMB44.3 million, US$1.4 per ADS) to repurchase the outstanding warrants of 4,722,223 ADSs (representing 70,833,345 Class A ordinary shares), upon which the warrant liability was extinguished.

The Company recognized the change in fair value of the warrant liability in RMB190,178 and RMB24,598 for the years ended December 31, 2021 and 2022, respectively. The change in fair value of warrant liability was recognized in the consolidated statements of comprehensive income (loss) in respective periods.

Movement of warrant liability is as follows:


	For the years ended December 31,
	2021	2022
Beginning balance	—	66,347
Issuance of warrant	258,782	—
Change in fair value of warrant liability	(190,178)	(24,598)
Repurchase of warrant liability	—	(44,282)
Foreign currency translation adjustment	(2,257)	2,533
Ending balance	66,347	—

Ordinary shares

12 Months Ended

Dec. 31, 2022

Ordinary shares

Ordinary shares

12.	Ordinary shares

The Company’s authorized share capital is designated into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to fifteen votes. In addition, certain matters including those related to the change of control of the Company require an additional approval by the holders of a majority of Class A ordinary shares voting as a separate class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Class B ordinary shares will be automatically converted into the same number of Class A ordinary shares under certain circumstances, including any transfer of Class B ordinary shares by the holder thereof to any person or entity which is not an affiliate of such holder.

As of January 1, 2020, the authorized ordinary shares are 1,000,000,000,000, of which 2,372,222,222 shares were issued and 2,350,123,270 shares were outstanding. These outstanding shares consist of (1) 1,993,498,826 Class A ordinary shares and (2) 356,624,444 Class B ordinary shares, which were held by the Chairman and CEO of the Company.

Effective November 25, 2020, the Board of Directors approved conversion of 45,000,000 Class B ordinary shares into 45,000,000 Class A ordinary shares.

On May 3, 2021, the Company issued 13,492,065 ADSs (202,380,975 Class A ordinary shares) to certain institutional investors for RMB1,029,455, net of issuance cost. The Company also issued to the investors warrants to purchase up to an aggregate of 4,047,620 ADSs (60,714,300 Class A ordinary shares). Also, the Company issued warrants to two placement agents, which entitles them to purchase up to an aggregate of 674,603 ADSs (10,119,045 Class A ordinary shares). The Company classified the warrants as warrant liability and the fair value of the warrant liability was RMB258,782 as of the issuance date, the residual proceeds of RMB770,673 was allocated to the Company’s ordinary shares. On June 23, 2022, the Company repurchased the warrants and the warrant liability was extinguished (Note 11).

As of December 31, 2022, the authorized ordinary shares are 1,000,000,000,000, of which 2,804,138,492 shares were issued and 2,496,001,757 shares were outstanding. These outstanding shares consist of (1) 2,184,377,313 Class A ordinary shares and (2) 311,624,444 Class B ordinary shares, which were held by the Chairman and CEO of the Company.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
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-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Treasury Stock

12 Months Ended

Dec. 31, 2022

Ordinary shares

Treasury stock

13.	Treasury stocks

2018 Equity Incentive Plan

In April 2018, the Company established a trust to hold 51,624,000 of the Company’s issued ordinary shares. These ordinary shares were contributed by the Co-Founders and employees and held in a trust (the “Trust”) for the benefit of the employees who are under the 2018 Equity Incentive Plan (Note 14).

The ordinary shares issued to the Trust are accounted for as treasury stocks of the Company and presented as such for all periods presented. The Trust does not hold any other assets or liabilities as of December 31, 2021 and 2022, nor earn any income nor incur any expenses for the years ended December 31, 2020, 2021 and 2022.

As of January 1, 2020, 22,098,952 issued ordinary shares are accounted as treasury stocks. In 2020, 4,002,052 restricted share units were transferred from treasury stock to ordinary shares. For the year ended December 31, 2021, 5,757,945 restricted share units that have been vested were transferred from treasury stock to ordinary shares under the 2018 Incentive Plan (Note 14).

As of December 31, 2021 and 2022, 12,338,955 and 12,338,955 issued ordinary shares are accounted as treasury stocks.

Amended 2018 Plan

In April 2021, the Board of Directors of the Company amended the 2018 Plan (the “Amended 2018 Plan”) (Note 14). In May and September 2021, the Company issued 94,927,065 Class A ordinary shares and 63,774,885 Class A ordinary shares, which were then reserved under the Amended 2018 Plan. For the year ended December 31, 2021, 95,816,325 restricted share units that have been vested were transferred from treasury stock to ordinary shares under the Amended 2018 Plan. Under the Amended 2018 Plan, the Company withholds the shares issued to the employees to meet the income tax withholding requirement upon the vesting of the Restricted share units. For the year ended December 31, 2021, the Company withheld 33,255,495 Class A ordinary shares for RMB150,705 and sold 13,043,895 Class A ordinary shares for RMB45,728. For the year ended December 31, 2022, the Company withheld 17,102,175 Class A ordinary shares for RMB31,097 and sold 37,313,775 Class A ordinary shares for RMB134,919. The Company did not retire any of the repurchased Class A ordinary shares. As of December 31, 2022 and 2021, 9,867,045 and 83,097,225 issued ordinary shares are accounted as treasury stocks. For the year ended December 31, 2022, 53,018,580 restricted share units were transferred from treasury stock to ordinary shares upon vesting under the Amended 2018 Plan.

Share Repurchase Program

Effective September 9, 2020, the Board of Directors approved a share repurchase program to repurchase in the open market up to US$10 million worth of its outstanding (i) ADS each representing 15 Class A ordinary shares, and/or (ii) Class A ordinary shares over the next 12 months starting from September 22, 2020 depending on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with Canaan’s working capital requirements and general business conditions, the relevant rules under United States securities laws and regulations, and the relevant stock exchange rules. During the year ended December 31, 2020, total of 1,719,946 outstanding ADSs (25,799,190 shares) were repurchased but have not been retired with a total consideration of RMB23,915, which is shown as treasury stock (Note 2(af)).

Effective September 19, 2021, the Board of Directors approved a share repurchase program to repurchase in the open market up to US$20 million worth of its outstanding (i) American Depositary Share (“ADS”) each representing 15 Class A ordinary shares, and or (ii) Class A ordinary shares over the next 12 months starting from September 20, 2021 depending on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with Canaan’s working capital requirements and general business conditions, the relevant rules under United States securities laws and regulations, and the relevant stock exchange rules. During the year ended December 31, 2021, total of 2,312,215 outstanding ADSs (34,683,225 shares) were repurchased but have not been retired with a total consideration of RMB103,543, which is shown as treasury stock (Note 2(af)).

Effective March 16, 2022, the Board of Directors approved a share repurchase program to repurchase in the open market up to US$100 million worth of its outstanding (i) American depositary shares, each representing 15 Class A ordinary shares, and/or (ii) Class A ordinary shares over the next 24 months starting from March 16, 2022 depending on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with Canaan’s working capital requirements and general business conditions, the relevant rules under United States securities laws and regulations, and the relevant stock exchange rules. During the year ended December 31, 2022, total of 10,307,665 outstanding ADSs (154,614,975 shares) were repurchased but have not been retired with a total consideration of RMB253,079, which is shown as treasury stock (Note 2(af)).

As of December 31, 2022, a total of 215,097,390 repurchased ordinary shares are accounted as treasury stocks.

Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Compensation

Share-Based Compensation

14.	Share-based compensation

In April 2021, the Board of Directors of the Company amended the 2018 Plan. Under the Amended 2018 Plan, in April 2021 and on every January 1 thereafter during which the 2018 Plan remains in effect, the maximum aggregate number of Class A ordinary shares which may be subject to awards under the 2018 Plan will be automatically increased by 15.0% of the total number of Class A ordinary shares issued and outstanding on December 31 of the preceding calendar year, if and whenever the unallocated Class A ordinary shares which may be issuable under the 2018 Plan account for less than 3% of the then total issued and outstanding Class A ordinary shares. In May and September 2021, the Company issued 94,927,065 Class A ordinary shares and 63,774,885 Class A ordinary shares, which were then reserved under the Amended 2018 Plan. In 2022, the Company granted 62,410,200 RSUs to Company’s employees under the Amended 2018 Plan.

(a)

Restricted share units

The following table summarizes the RSUs activity for the years ended December 31, 2020, 2021 and 2022:


	Number of	Weighted average
	shares	grant date fair value
		RMB
Outstanding as of December 31, 2019	15,733,334	1.51
Forfeited	(2,691,282)	1.51
Vested	(4,002,052)	1.51
Outstanding as of December 31, 2020	9,040,000	1.51
Granted	236,768,940	3.74
Forfeited	(6,991,000)	3.10
Vested	(101,574,270)	2.15
Outstanding as of December 31, 2021	137,243,670	4.81
Granted	62,410,200	1.63
Forfeited	(22,844,235)	2.11
Vested	(53,018,580)	4.36
Outstanding as of December 31, 2022	123,791,055	3.90

In 2022, the Company granted 62,410,200 RSUs to the Company’s employees under the Amended 2018 Plan. The Company used closing price of ordinary share to determine the fair value of the RSUs. Compensation expense related to RSUs with service conditions is recognized over the requisite service period, which is generally the vesting term of up to five years.

As of December 31, 2022, there was RMB346,568 unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted-average period of 31.65 months.

(b)

Share options

The following table summarizes the share options for the years ended December 31, 2020, 2021 and 2022:


		Weighted-Average	Weighted
		per Share	Average
	Number of	Exercise	Remaining	Aggregate
	shares	Price	Contractual Term	Intrinsic Value
		RMB	Years	RMB
Outstanding as of December 31, 2019 and 2020	—	—	—	—
Granted	114,000,000	4.90	—	—
Outstanding as of December 31, 2021	114,000,000	4.90	9.10	—
Outstanding as of December 31, 2022	114,000,000	4.90	8.12	—
Expected to vest as of December 31, 2022	114,000,000	4.90	8.12	—
Exercisable as of December 31, 2022	42,000,000	4.90	8.12	—

The aggregate intrinsic value as of December 31, 2022 in the table above represents the difference between the fair value of the Company’s ordinary share on December 31, 2022 and the exercise price.

The fair values of the share options granted by the Company to employees for the year ended December 31, 2021 are as follows:


		For the Year Ended December 31,
		2021
Weighted average grant date fair value of option per share		6.63
Aggregate grant date fair value of options		465,553

For the year ended December 31, 2022, no new share options were granted.

As of December 31, 2022, there was RMB145,063 unrecognized compensation expense related to share options, which is expected to be recognized over a weighted-average period of 23.32 months.

The assumptions used to estimate the fair values of the share options granted were as follows:


	For the Year Ended December 31,
	2021
Risk-free rate of return (1)		1.25% to 1.85	%
Dividend yield (2)		0	%
Expected volatility (3)		136.91% to 142.01	%
Expected term (4)		10 years
Exercise multiple (5)		2.80
Fair value of ordinary share	US$	3.78 to US$17.51

The risk-free rate of return was estimated based on the yield of US Strip Bond with a maturity life equal to the remaining maturity life of the Company’s options as of the valuation date.

Dividend yield is zero as the Company has never declared or paid any cash dividends on its shares, and the Company does not anticipate any dividend payments in the foreseeable future.

The expected volatility was estimated based on the historical volatility of comparable peer public companies and the Company with a time horizon close to the contract life of the Company’s options.

Expected term is the contract life of the option.

The expected exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested options. As the Company did not have sufficient information of past employee exercise history, it has considered the statistics by making reference to a widely-accepted academic research publication.

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

15.	Income Taxes

(a)

Cayman Islands

Under the current tax laws of Cayman Islands, the Company is not subject to income, corporation or capital gains tax, and no withholding tax is imposed upon the payment of dividends.

(b)

Hong Kong, Singapore and United States

The Company’s subsidiaries incorporated in Hong Kong, Singapore and United States are subject to profits or income tax rates of 16.5%, 17.0% and 21.0%, respectively, on their estimated assessable profits for the years ended December 31, 2020, 2021 and 2022. Dividends income received from subsidiaries in mainland China are not subject to Hong Kong, Singapore and United States profits or income tax.

(c)

PRC Enterprise Income Tax (“EIT”)

On March 16, 2007, the National People’s Congress of the PRC enacted an Enterprise Income Tax Law (“EIT Law”), under which Foreign Investment Enterprises (“FIEs”) and domestic companies would be subject to EIT at a uniform rate of 25%. The EIT law became effective on January 1, 2008.

Canaan Creative Co., Ltd. (“Canaan Creative”) obtained its High and New Technology Enterprises (“HNTE”) certificate with a valid period of three years in 2019. Therefore, Canaan Creative is eligible to enjoy a preferential tax rate of 15% from 2019 to 2021 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. In October 2022, Canaan Creative received approval from the tax authority on the renewal of its HNTE status which entitled it to the preferential income tax rate of 15% effective retroactively from 2022 to 2024.

Hangzhou Canaan Intelligence Information Technology Co., Ltd. (“Hangzhou Canaan”) obtained its HNTE certificate with a valid period of three years in 2019, and therefore is eligible to enjoy a preferential tax rate of 15% from 2019 to 2021 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. In addition, in accordance with Caishui (2012) No. 27 issued by the State Tax Bureau on April 20, 2012, Hangzhou Canaan is qualified as an integrated circuit enterprise and enjoying a 5-year tax holiday (two year full exemption followed by three year half reduction) beginning from 2016 after utilizing all prior years tax losses. Therefore, Hangzhou Canaan is eligible to enjoy a preferential tax rate of 0% from 2016 to 2017 and 12.5% from 2018 to 2020. Thereafter, Hangzhou Canaan did not renew its HNTE certificate or integrated circuit enterprise qualification.

Canaan Creative (SH) Co., Ltd. (“Canaan Creative (SH)”) obtained its High and New Technology Enterprises (“HNTE”) certificate with a valid period of three years in 2022. Therefore, Canaan Creative is eligible to enjoy a preferential tax rate of 15% from 2022 to 2024 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority.

The Company’s other PRC subsidiaries are subject to the statutory income tax rate of 25%.

(d)PRC Withholding Income Tax on Dividends

The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.”

The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by a FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% if the immediate holding company in Hong Kong owns directly at least 25% of the shares of the FIE and could be recognized as a Beneficial Owner of the dividend from PRC tax perspective.

As of December 31, 2022, the aggregated amount of undistributed earnings of the Company entities located in the PRC that are available for distribution to the Company were RMB1,628,165. The Company plans to indefinitely reinvested undistributed earnings earned from its PRC subsidiaries in its operations in the PRC. Therefore, no withholding income tax for undistributed earnings of its subsidiaries were provided as of December 31, 2022.

A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows:


	For the Years Ended December 31,
	2020		2021		2022
PRC statutory income tax rates	(25.0)	%	25.0	%	25.0	%
Permanent book-tax difference	(4.5)	%	1.4	%	(2.4)	%
Share-based compensation	0.2	%	3.4	%	5.5	%
Super deduction of R&D expense	(5.7)	%	(2.6)	%	(14.0)	%
Others	1.0	%	0.6	%	6.1	%
Different tax rates in other jurisdictions	2.0	%	(2.2)	%	2.0	%
Effect of tax holiday	4.4	%	(7.8)	%	(16.9)	%
Change in valuation allowance	23.1	%	(14.0)	%	12.6	%
Total	0.0	%	2.4	%	20.3	%
Effects of tax holidays entitled by the PRC subsidiaries	(9,553)		160,246		103,195
Effects of tax holidays entitled by the PRC subsidiaries on basic income (loss) per Class A and Class B ordinary share (RMB cent per share)	(0.41)		6.35		4.03

Composition of income tax expense

The current and deferred portions of income tax expense included in the consolidated statements of comprehensive income (loss) are as follows:


	For the Years Ended December 31,
	2020	2021	2022
Current income tax expense	—	149,152	217,856
Deferred income tax benefits	—	(99,044)	(93,854)
Income tax expense	—	50,108	124,002

Deferred tax assets and liabilities

Deferred taxes were measured using the enacted tax rates for the periods in which they are expected to be reversed. The tax effects of temporary differences that give rise to the deferred tax asset balances as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
Deferred tax assets
Tax losses carried forward	102,239	71,668
Write-down of inventories	10,771	108,229
Property, equipment and software	—	34,905
Share-based compensation	—	30,835
Allowance for doubtful accounts	1,314	1,416
Warranty reserve	2,704	967
Subtotal	117,028	248,020
Less: Valuation allowance	(17,984)	(96,610)
Deferred tax assets	99,044	151,410

As of December 31, 2021 and 2022, the Company had tax loss carry-forwards of approximately RMB437,187 and RMB373,683 which mainly arose from its offshore subsidiaries and to a less extent from its PRC subsidiaries. Most of the PRC subsidiaries are qualified as HNTE or technology small and medium enterprise (“SMEs”), the carryforwards period for net operating losses under the EIT Law is changed from five years to ten years. The net operating loss carryforwards by the PRC mainland companies will expire in varying amounts between 2030 and 2033. PRC mainland companies tax losses of RMB1,581, RMB17,173, nil and RMB3,804 will expire, if unused, by 2030, 2031, 2032 and 2033, respectively. Other than the expiration, there are no other limitations or restrictions upon the Company’s ability to use these operating loss carryforwards.

Valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Company considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance was provided for tax loss carry-forward because it was more likely than not that such deferred tax assets will not be realized due to lack of profitable history to support the Company’s estimate of its future taxable income. If events occur in the future that allow the Company to realize part or all its deferred income tax, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur.

As of December 31, 2021 and 2022, valuation allowances of RMB17,984 and RMB96,610 were provided because it was more likely than not that the Company will not be able to utilize certain tax loss carry-forwards and other deferred tax assets generated by its subsidiaries. If events occur in the future that allow the Company to realize more of its deferred tax assets than the presently recorded amount, an adjustment to the valuation allowances will increase income when those events occur.

Movement of valuation allowance is as follows:


	For the Years Ended December 31,
	2020	2021	2022
Beginning balance	254,039	304,790	17,984
Additions (decreases) during the year	50,751	(286,806)	78,626
Ending balance	304,790	17,984	96,610

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2021 and 2022, the Company did not have any significant unrecognized uncertain tax positions.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Related Party Transactions

16.	Related party transactions

For the years ended December 31, 2020, 2021 and 2022, the related party transactions are as follows:


	For the Years Ended December 31,
	2020	2021	2022

Transaction amount with related parties
Disposal of motor vehicles	637	—	—
	637	—	—

As of December 31, 2021 and 2022, there are no related party balances.

Basic and Diluted Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2022

Basic and Diluted Earnings (Loss) Per Share

Basic and Diluted Earnings (Loss) Per Share

17.	Basic and diluted earnings (loss) per share

Basic and diluted earnings (loss) per share have been calculated in accordance with ASC 260 on computation of earnings (loss) per share for the years ended December 31, 2020, 2021 and 2022 as follows:


	For the Years Ended December 31,
	2020	2021	2022
Basic earnings (loss) per share calculation
Numerator:
Net income (loss)	(215,094)	2,000,282	486,357
Denominator:
Weighted-average ordinary shares outstanding	2,345,703,779	2,521,667,815	2,560,106,403
Basic earnings (loss) per Class A and Class B ordinary share (RMB cent per share)	(9.17)	79.32	19.00


	For the Years Ended December 31,
	2020	2021	2022
Diluted earnings (loss) per share calculation
Numerator:
Net income (loss)	(215,094)	2,000,282	486,357
Denominator:
Weighted-average ordinary shares outstanding	2,345,703,779	2,521,667,815	2,560,106,403
Add: weighted-average RSUs	—	54,489,432	17,785,666
Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share	2,345,703,779	2,576,157,247	2,577,892,069
Diluted earnings (loss) per Class A and Class B ordinary share (RMB cent per share)	(9.17)	77.65	18.87

The potentially dilutive securities that have not been included in the calculation of diluted net loss per share as their inclusion would be anti- dilutive are as follows:


	For the Year
	Ended December 31,
	2020	2021	2022
Weighted-average RSUs	10,710,636	—	—
Share options	—	114,000,000	114,000,000
Warrants	—	70,833,345	—

Contingencies

12 Months Ended

Dec. 31, 2022

Contingencies

Contingencies

18.	Contingencies

On March 4, 2020, a putative class action was filed in the United States District Court of Oregon (the “Federal Action”) against the Company, certain officers and directors of the Company, among others. The complaint alleges that the Form F-1 registration statement, initially filed with the Securities and Exchange Commission on October 28, 2019 (File No. 333-234356), contained material misstatements and omissions in violation of federal securities laws. On March 6, 2020, another putative class action, making substantially similar allegations, was filed in New York County Supreme Court (the “State Action”) against the Company and certain officers and directors of the Company. On June 1, 2020, the Company filed a motion to stay all proceedings in the State Action pending adjudication of the Federal Action, which was granted on July 21, 2020. Subsequently, the Federal Action was transferred to the U.S. District Court for the Southern District of New York (the “Court”) on September 2, 2020. On October 7, 2020, lead plaintiffs in the Federal Action filed an amended complaint asserting claims under Section 11 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act for that the registration statement failed to disclose three alleged related party transactions. On December 7, 2020, the Company filed a motion to dismiss the amended complaint in the Federal Action. On July 8, 2021, the Court dismissed the first amended complaint but allowed plaintiffs to file a second amended complaint by August 6, 2021. On August 6, 2021, plaintiffs filed a letter motion for leave to file a second amended complaint. On August 27, 2021, the Company filed a letter response to oppose plaintiffs’ August 6, 2021 letter motion and to seek a final judgment dismissing the Federal Action to be entered. On March 31, 2022, plaintiffs’ motion for leave to file a second amended complaint has been denied as futile, and plaintiffs’ claims were dismissed with prejudice, and the Court closed the motion.

On April 15, 2021, a new putative class action was filed in the United States District Court for the Southern District of New York against the Company and certain officers of the Company. The complaint alleges that the Company’s press release issued in February 2021 about increased visibility into revenue and the size and quality of orders the Company was receiving were materially false and misleading. Plaintiff claims that the truth about the Company’s revenue was revealed in April 2021, when the Company announced its latest financial results. On December 14, 2021, the Court so-ordered this stipulation. On February 7, 2022, lead plaintiffs filed an amended complaint asserting the same claims under Sections 10(b) and 20(a) of the Exchange Act against the same set of defendants. The amended complaint alleges the Company’s November 30, 2020 and February 10, 2021 press releases and the April 9, 2021 interview of the Company’s chief executive officer in an article published by Decrypt contained false and misleading statements regarding the pre-sale orders the Company had received and the Company’s ability to secure sufficient chip supply to meet the increasing demand for mining machines. On April 8, 2022, Canaan filed a motion to dismiss the amended complaint, which has been fully briefed as of July 7, 2022. As of the date of this annual report, the Court issued an order granting Canaan’s motion to dismiss the case in its entirety. The Court granted lead plaintiffs leave to further amend their amended complaint, the deadline of which is April 26, 2023.

The management of the Company believes that there are defenses to one or more of the claims asserted in the lawsuits. The management of the Company has engaged counsel with the intention to vigorously defend these lawsuits. At the date of issue of the consolidated financial statements, the Company is unable to predict the outcome of these lawsuits, or reasonably estimate a range of possible losses, if any, given the early stage of these lawsuits. Therefore, no contingent liabilities have been recorded by the Company as of December 31, 2022 in respect of these lawsuits.

Also, the Company is and, from time to time, may in the future become, involved in other legal proceedings in the ordinary course of business. The Company currently believes that the outcome of any of these existing legal proceedings, either individually or in the aggregate, will not have a material impact on the operating results, financial condition or cash flows of the Company. With respect to existing legal proceedings, the Company has either determined that the existence of a material loss is not reasonably possible or that it is unable to estimate a reasonably possible loss or range of loss. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings.

Condensed Financial Information of the Parent Company

12 Months Ended

Dec. 31, 2022

Condensed financial information of the parent company

Condensed financial information of the parent company

19.	Condensed financial information of the parent company

Rules 12-04(a) and 4-08(e)(3) of Regulation S-X require condensed financial information as to the financial position, cash flows and results of operations of a parent company as of and for the same periods for which the audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year.

The following condensed financial statements of the Parent Company have been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Parent Company used the equity method to account for its investment in its subsidiaries. Such investment is presented on the separate condensed balance sheets of the Parent Company as “Receivables from subsidiaries”. The Parent Company, its subsidiaries were included in the consolidated financial statements whereby the inter-company balances and transactions were eliminated upon consolidation. The Parent Company’s share of income (loss) from its subsidiaries is reported as “share of income (loss) from subsidiaries” in the condensed financial statements.

The Parent Company is a Cayman Islands company and, therefore, is not subject to income taxes for all years presented. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted.

As of December 31, 2021 and 2022, there were no material commitments or contingencies, significant provisions for long-term obligations or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

For the purpose of the Company’s stand-alone financial statements, its investments in subsidiaries were reported using the equity method of accounting. The Company’s share of income (loss) from its subsidiaries was reported as a share of income (loss) of subsidiaries in the accompanying parent company only financial statements. Ordinarily, under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of the parent only financial information, the Company has continued to reflect its share, based on its proportionate interest, of the losses of its subsidiaries regardless of the carrying value of the investment even though the Company is not obligated to provide continuing support or fund losses.

Condensed Financial Information of the Parent Company

CONDENSED BALANCE SHEETS


	As of December 31,
	2021	2022
			US$
	RMB	RMB	(Note 2(e))
ASSETS
Current assets:
Cash	30,860	39,573	5,738
Prepayment for repurchase of ordinary shares	—	1,251	181
Total current assets	30,860	40,824	5,919
Non-current assets:
Investments in and receivables from subsidiaries	3,502,014	4,201,822	609,208
Total assets	3,532,874	4,242,646	615,127
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Refund from depository bank – current	2,013	2,199	319
Other payable	—	557	81
Non-current liabilities:
Refund from depository bank – non-current	5,824	4,163	604
Warrant liability	66,347	—	—
Total liabilities	74,184	6,919	1,004
Shareholders’ equity:
Ordinary shares	1	1	—
Subscriptions receivable from shareholders	(1)	(1)	—
Treasury stocks	(231,281)	(380,538)	(55,173)
Additional paid-in capital	2,891,134	3,298,531	478,242
Statutory reserves	97,420	102,586	14,874
Accumulated other comprehensive loss	(101,925)	(4,844)	(702)
Retained earnings	803,342	1,219,992	176,882
Total shareholders’ equity	3,458,690	4,235,727	614,123
Total liabilities and shareholders’ equity	3,532,874	4,242,646	615,127

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS


	For the year ended December 31,
	2020	2021	2022
				US$
	RMB	RMB	RMB	(Note 2(e))
Operating expenses:
Research and development expenses	(652)	—	—	—
Sales and marketing expenses	(41)	—	—	—
General and administrative expenses	(2,277)	(6,668)	(20,968)	(3,040)
Loss from operations	(2,970)	(6,668)	(20,968)	(3,040)
Interest income	—	1	7	1
Other income, net	2,425	2,037	2,122	308
Change in fair value of warrant liability	—	190,178	24,598	3,566
Share of income (losses) from subsidiaries	(214,549)	2,306,195	416,058	60,323
Net income (loss)	(215,094)	2,491,743	421,817	61,158
Foreign currency translation adjustment, net of nil tax	(24,238)	(22,145)	97,081	14,075
Total comprehensive income (loss)	(239,332)	2,469,598	518,898	75,233

CONDENSED STATEMENTS OF CASH FLOWS


	For the year ended December 31,
	2020	2021	2022
				US$
	RMB	RMB	RMB	(Note 2(e))
Cash flows from operating activities
Receipt of refund from depository bank	13,285	—	—	—
Other cash used in operating activities	(1)	(6,462)	(21,439)	(3,108)
Net cash provided by (used in) operating activities	13,284	(6,462)	(21,439)	(3,108)
Cash flows from investing activities
Decrease (increase) in receivables from subsidiaries	28,451	(871,194)	305,529	44,298
Net cash provided by (used in) investing activities	28,451	(871,194)	305,529	44,298
Cash flows from financing activities
Repurchase of warrants	—	—	(44,282)	(6,420)
Payment for repurchase of ordinary shares	(23,915)	(103,543)	(234,307)	(33,970)
Prepayment under share repurchase agreement	(16,146)	(573)	—	—
Payment for cost of issuance	—	(519)	—	—
Proceeds from issuance of ordinary shares and warrants	—	1,029,455	—	—
Net cash provided by (used in) financing activities	(40,061)	924,820	(278,589)	(40,390)
Net increase in cash	1,674	47,164	5,501	799
Effect of exchange rate changes on cash	(1,541)	(16,451)	3,212	466
Cash, beginning of year	14	147	30,860	4,474
Cash, end of year	147	30,860	39,573	5,739

Summary of significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of significant accounting policies

Basis of preparation

(a)

Basis of preparation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

Use of estimates

(b)

Use of estimates

Consolidation

(c)

Consolidation

Functional currency and foreign currency translation

(d)

Functional currency and foreign currency translation

Convenience translation

(e)

Convenience translation

Warrant Liability

(f)

Warrant Liability

Fair value of financial instruments

(g)

Fair value of financial instruments

The three levels of inputs that may be used to measure fair value include:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable, market-based inputs, other than quoted prices, for the assets or liabilities either directly or indirectly.

Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

On a recurring basis, the Company measures its warrant liability at fair value.

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:


				Balance at
As of December 31, 2021	Level 1	Level 2	Level 3	fair value
Liabilities
Warrant liability	—	—	66,347	66,347

Cash and cash equivalents

(h)

Cash

Cash includes cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use.


	As of December 31,
	2021	2022
RMB denominated bank deposits with financial institutions in the PRC	1,167,445	77,373
US dollar denominated bank deposits with financial institutions in the PRC	1,447,336	430,006
US dollar denominated bank deposits with overseas financial institutions	29,498	183,409
Others denominated bank deposits with overseas financial institutions	317	16,406
RMB denominated bank deposits with overseas financial institutions	—	56
Others denominated bank deposits with financial institutions in the PRC	39,746	11
Total	2,684,342	707,261

Restricted cash

(i)

Restricted cash

Short-term investments

(j)

Short-term investments

Accounts receivable

(k)

Accounts receivable

Inventories

(l)

Inventories

Cryptocurrency

(m)

Cryptocurrency

During the year ended December 31, 2022, the Company recognized impairment loss of RMB52,959 on cryptocurrency.

Operating lease assets

(n)

Operating lease assets

Property, equipment and software

(o)

Property, equipment and software


Leasehold improvements		the shorter of their useful lives and the lease terms
Computers and electronic equipment		3 to 5 years
Mechanical equipment		5 years
Mining equipment		1.5 years
Motor vehicles		5 years
Software		3 years

Non-Current financial Investment

(p)

Non-current financial investment

During the year ended December 31, 2021 and 2022, the Company recognized impairment charge of RMB25 and nil recorded in other income, net.

Impairment of long-lived assets

(q)

Impairment of long-lived assets

Contract liabilities

(r)

Contract liabilities

Cash proceeds received from customers before product delivery is recognized as contract liabilities and is recognized as revenues when revenue recognition criteria are met.

Revenue from contracts with customers (ASC 606)

(s)

Revenue from contracts with customers (ASC 606)

Products revenue

Mining revenue

Maintenance services revenue

Revenue from lease arrangements as lessor (ASC 842, Lease)

(t)

Revenue from lease arrangements as lessor (ASC 842, Lease)

Value-added-tax ("VAT") recoverable and surcharges

(u)

Value-added-tax (“VAT”) recoverable and surcharges

Cost of revenues

(v)

Cost of revenues

Research and development expenses

(w)

Research and development expenses

Sales and marketing expenses

(x)

Sales and marketing expenses

General and administrative expenses

(y)

General and administrative expenses

Government grants

(z)

Government grants

Lease arrangement as lessee

(aa)

Lease arrangement as lessee

Employee social security and welfare benefits

(ab)

Employee social security and welfare benefits

Income taxes

(ac)

Income taxes

Share-based compensation

(ad)

Share-based compensation

The Company grants restricted shares and share options to eligible employees and accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation.

Statutory reserves

(ae)

Statutory reserves

There are no legal requirements in the PRC to fund these reserves by transfer of cash to restricted accounts, and the Company has not done so.

The Company has made nil, RMB113 and RMB5,166 appropriations to statutory reserve for the years ended December 31, 2020, 2021 and 2022, respectively.

Repurchase of share

(af)

Repurchase of share

Earnings (loss) per share

(ag)

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period.

Comprehensive income (loss)

(ah)

Comprehensive income (loss)

Segment reporting

(ai)

Segment reporting

The geographical region of revenue generated is based on the location at which the goods delivered or the services were provided:


	For the Years Ended December 31,
Geographic region	2020	2021	2022
Indonesia	—	—	1,446,347
Malaysia	—	—	802,063
United States of America	3,528	312,722	631,243
Australia	114	361,377	405,808
Kazakhstan	47,792	711,596	386,768
Cyprus	—	633,322	243,500
Hong Kong Special Administrative Region	12,301	87,971	149,488
Canada	162	402,489	122,799
Mainland China	379,418	1,779,923	122,770
Laos	—	—	32,660
Thailand	31	289,013	18,644
Sweden	8	152,127	6,285
Other countries or regions	4,332	256,166	10,532
Total	447,686	4,986,706	4,378,907

Recently issued accounting pronouncements

(aj)

Recently issued accounting pronouncements

New and amended standards adopted by the Company:

ii.

New and amended standards not yet adopted by the Company:

Organization and Principal Activities (Tables)

12 Months Ended

Dec. 31, 2022

Organization and Principal Activities

Schedule of subsidiaries

As of December 31, 2022, the Company’s principal subsidiaries are as follows:


			Equity
	Date of	Place of	interest
Name of subsidiaries	incorporation	incorporation	held		Principal activities
Canaan Creative (HK) Holdings Limited	February 22, 2018	Hong Kong Special Administrative Region	100	%	Research and development of ICs
Hangzhou Canaan Intelligence Information Technology Co., Ltd.	April 9, 2013	Hangzhou, China	100	%	Research and development of ICs
Canaan Creative Co., Ltd.	April 1, 2013	Beijing, China	100	%	Research and development of ICs
Langfang Creative Technology Co., Ltd.	May 15, 2014	Langfang, China	100	%	Assembly of mining equipment and spare parts
Canaan Convey Co., Ltd.	November 2, 2017	Beijing, China	100	%	International distribution of mining equipment and spare parts
Zhejiang Avalon Technology Co., Ltd.	December 5, 2017	Hangzhou, China	100	%	Distribution of mining equipment and spare parts
Canaan Bright Sight Co., Ltd.	December 24, 2018	Beijing, China	100	%	International distribution of AI products
Canaan Creative (SH) Co., Ltd.	January 27, 2021	Shanghai, China	100	%	Research and development of ICs
Canaan Creative International PTE. Ltd	March 9, 2021	Singapore	100	%	Mining business
Canaan Creative Global Pte. Ltd.	September 18, 2021	Singapore	100	%	International headquarters, research and development of ICs, international distribution of mining equipments and spare parts
Canaan U.S. Inc.	February 1, 2022	United States	100	%	International distribution of mining equipments and spare parts, mining business

Summary of significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2022

Summary of significant accounting policies

Summary of assets and liabilities measured at fair value on a recurring basis

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:


				Balance at
As of December 31, 2021	Level 1	Level 2	Level 3	fair value
Liabilities
Warrant liability	—	—	66,347	66,347

Summary of cash and cash equivalents

Cash includes cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use.


	As of December 31,
	2021	2022
RMB denominated bank deposits with financial institutions in the PRC	1,167,445	77,373
US dollar denominated bank deposits with financial institutions in the PRC	1,447,336	430,006
US dollar denominated bank deposits with overseas financial institutions	29,498	183,409
Others denominated bank deposits with overseas financial institutions	317	16,406
RMB denominated bank deposits with overseas financial institutions	—	56
Others denominated bank deposits with financial institutions in the PRC	39,746	11
Total	2,684,342	707,261

Schedule of estimated useful lives

The estimated useful lives are as follows:


Leasehold improvements		the shorter of their useful lives and the lease terms
Computers and electronic equipment		3 to 5 years
Mechanical equipment		5 years
Mining equipment		1.5 years
Motor vehicles		5 years
Software		3 years

Summary of revenue segregated by geographic region

The geographical region of revenue generated is based on the location at which the goods delivered or the services were provided:


	For the Years Ended December 31,
Geographic region	2020	2021	2022
Indonesia	—	—	1,446,347
Malaysia	—	—	802,063
United States of America	3,528	312,722	631,243
Australia	114	361,377	405,808
Kazakhstan	47,792	711,596	386,768
Cyprus	—	633,322	243,500
Hong Kong Special Administrative Region	12,301	87,971	149,488
Canada	162	402,489	122,799
Mainland China	379,418	1,779,923	122,770
Laos	—	—	32,660
Thailand	31	289,013	18,644
Sweden	8	152,127	6,285
Other countries or regions	4,332	256,166	10,532
Total	447,686	4,986,706	4,378,907

Risks and Concentration (Tables)

12 Months Ended

Dec. 31, 2022

Risks and Concentration

Summary of accounts receivable concentration of credit risk and customers contribution of total revenue

Accounts receivable concentration of credit risk is as below:


	As of December 31,
	2021		2022
Customer A	52	%	—

Customers which contributed more than 10% of total revenue are as below:


	For the Years Ended December 31,
	2020	2021		2022
Customer B	*	*		33	%
Customer C	*	18	%	22	%
Customer D	*	*		16	%

Less than 10%

Inventories (Tables)

12 Months Ended

Dec. 31, 2022

Inventories

Schedule of inventories

Inventories consist of the following:


	As of December 31,
	2021	2022
Raw materials	429,208	789,134
Work in process	78,354	261,436
Finished goods	304,801	423,420
Total	812,363	1,473,990

Prepayments and Other Assets (Tables)

12 Months Ended

Dec. 31, 2022

Prepayments and Other Assets

Summary of prepayments and other assets

The current and non-current portions of prepayments and other assets consist of the following:


	As of December 31,
	2021	2022
Prepayments and other current assets
Prepayments to vendors (Note a)	1,427,820	1,105,194
VAT recoverable	260,571	396,701
Prepayment for repurchase of ordinary shares	15,901	24
VAT refund for export sales (Note b)	14,041	107,549
Deferred charges	—	42,943
Deposits	1,494	23,183
Others (Note c)	9,200	13,485
	1,729,027	1,689,079
Other non-current assets
Long-term rental and other deposits	2,956	17,046
Prepayments for purchase of software	—	391
	2,956	17,437

Cryptocurrency (Tables)

12 Months Ended

Dec. 31, 2022

Crypto Currency [Abstract]

Schedule of cryptocurrency


	As of December 31
	2021	2022
Gross carrying amount	21,371	104,997
Less: Impairment of cryptocurrency	(1,061)	(17,724)
Net	20,310	87,273

Schedule of additional information about cryptocurrency


	For the years ended December 31,
	2021	2022
Beginning balance	—	20,310
Revenue recognized on acceptance of cryptocurrency	21,688	238,596
Cost of revenues recognized on payment of cryptocurrency	—	(56,877)
Proceeds from disposal of cryptocurrency	—	(64,806)
Realized loss on disposal of cryptocurrency	—	(1,167)
Impairment of cryptocurrency	(1,061)	(52,959)
Foreign currency translation adjustment	(317)	4,176

Ending balance	20,310	87,273

Property, Equipment and Software (Tables)

12 Months Ended

Dec. 31, 2022

Property, Equipment and Software

Schedule of property, equipment and software

Property, equipment and software consist of the following:


	As of December 31,
	2021	2022
Cost:
Mining equipment	146,881	720,666
Computers and electronic equipment	27,492	69,698
Leasehold improvements	21,412	33,466
Mechanical equipment	7,694	855
Software	5,438	16,437
Construction in progress	665	—
Motor vehicles	470	541
Total cost	210,052	841,663
Less: Accumulated depreciation and amortization	(24,486)	(243,675)
Property, equipment and software, net	185,566	597,988

Summary of depreciation and amortization expenses

Depreciation and amortization expenses recognized for the years ended December 31, 2020, 2021 and 2022 are summarized as follows:


	For the Years Ended December 31,
	2020	2021	2022
General and administrative expenses	7,680	6,439	11,954
Research and development expenses	3,874	2,826	6,047
Cost of revenues	217	1,715	208,362
Sales and marketing expenses	81	29	56
Total	11,852	11,009	226,419

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases

Components of lease expenses

(a)

The components of lease expenses were as follows:


	For the Years Ended December 31,
	2020	2021	2022
Lease cost:
Reduction in the carrying amount of ROU assets	13,432	17,584	15,701
Interest of lease liabilities	1,938	1,613	1,342
Expenses for short-term lease within 12 months	505	443	1,506
Total lease cost	15,875	19,640	18,549

Summary of supplemental cash flow information related to leases


	For the Years Ended December 31,
	2020	2021	2022
Lease cost:
Reduction in the carrying amount of ROU assets	13,432	17,584	15,701
Interest of lease liabilities	1,938	1,613	1,342
Expenses for short-term lease within 12 months	505	443	1,506
Total lease cost	15,875	19,640	18,549

Summary of supplemental balance sheet information related to leases


	For the Years Ended December 31,
	2020	2021	2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	14,322	20,739	20,507
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	5,516	36,672	16,704
Lease liability settled through termination of lease:
Operating leases	427	2,590	2,493

(c)

Supplemental balance sheet information related to leases was as follows:


	As of December 31,
	2020	2021	2022
Weighted-average remaining lease term
Operating leases	1.3 year	2.4 year	1.9 year
Weighted-average discount rate
Operating lease	6.73% per annum	5.17% per annum	4.58% per annum

Schedule of maturities of lease liabilities


	As of December 31,
	2020	2021	2022
Weighted-average remaining lease term
Operating leases	1.3 year	2.4 year	1.9 year
Weighted-average discount rate
Operating lease	6.73% per annum	5.17% per annum	4.58% per annum

Accrued Liabilities and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Accrued Liabilities and Other Liabilities

Schedule of accrued liabilities and other liabilities


	As of December 31,
	2021	2022
Accrued liabilities and other current liabilities
Salary and welfare payable	118,712	144,473
Provision for reserve for inventory purchase commitments (Note a)	—	75,847
Other tax payables	19,128	56,116
Customer refund	10,738	29,432
Warranty reserve (Note b)	18,026	11,953
Refund from depository bank – current	2,013	2,199
VAT payable	128,939	748
VAT received from customers related to contract liabilities	2,427	135
Withholding tax payables due to restricted share units (Note c)	126,198	—
Rental deposits.	2,120	—
Others	9,093	15,802
Total	437,394	336,705
Other non-current liabilities
Refund from depository bank – non-current	5,824	4,163

Schedule of product warranty liability

Movement of provision for warranty is as follows:


	For the year ended December 31,
	2021	2022
Accrued warranty—beginning of year	—	18,026
Accrual for warranties issued during the year	28,826	12,742
Warranty claims paid	(10,800)	(7,843)
Warranty expired	—	(10,972)
Accrued warranty—end of year	18,026	11,953

Warrants (Tables)

12 Months Ended

Dec. 31, 2022

Warrants

Summary of Significant Unobservable Inputs Used In Calculation Of Warrant Liability


			Fair Value at
	Fair Value at		June 23, 2022
	December 31, 2021		(remeasurement date)
Risk Free Rate	0.37%-0.81	%	2.32%-2.63	%
Volatility	131.47%-127.93	%	126.66%-140.39	%
Expected dividend yield	0	%	0	%
Expected term	2.3 years-3 years		1.9 years-2.1 years

Schedule of movement of warrant liability


	For the years ended December 31,
	2021	2022
Beginning balance	—	66,347
Issuance of warrant	258,782	—
Change in fair value of warrant liability	(190,178)	(24,598)
Repurchase of warrant liability	—	(44,282)
Foreign currency translation adjustment	(2,257)	2,533
Ending balance	66,347	—

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Summary of Stock Option Activity

The following table summarizes the share options for the years ended December 31, 2020, 2021 and 2022:


		Weighted-Average	Weighted
		per Share	Average
	Number of	Exercise	Remaining	Aggregate
	shares	Price	Contractual Term	Intrinsic Value
		RMB	Years	RMB
Outstanding as of December 31, 2019 and 2020	—	—	—	—
Granted	114,000,000	4.90	—	—
Outstanding as of December 31, 2021	114,000,000	4.90	9.10	—
Outstanding as of December 31, 2022	114,000,000	4.90	8.12	—
Expected to vest as of December 31, 2022	114,000,000	4.90	8.12	—
Exercisable as of December 31, 2022	42,000,000	4.90	8.12	—

Summary of fair values of the share options granted

The fair values of the share options granted by the Company to employees for the year ended December 31, 2021 are as follows:


		For the Year Ended December 31,
		2021
Weighted average grant date fair value of option per share		6.63
Aggregate grant date fair value of options		465,553

Summary of assumptions used to determine the fair value of stock options

The assumptions used to estimate the fair values of the share options granted were as follows:


	For the Year Ended December 31,
	2021
Risk-free rate of return (1)		1.25% to 1.85	%
Dividend yield (2)		0	%
Expected volatility (3)		136.91% to 142.01	%
Expected term (4)		10 years
Exercise multiple (5)		2.80
Fair value of ordinary share	US$	3.78 to US$17.51

Restricted Share Units

Summary of Restricted Shares Activity

The following table summarizes the RSUs activity for the years ended December 31, 2020, 2021 and 2022:


	Number of	Weighted average
	shares	grant date fair value
		RMB
Outstanding as of December 31, 2019	15,733,334	1.51
Forfeited	(2,691,282)	1.51
Vested	(4,002,052)	1.51
Outstanding as of December 31, 2020	9,040,000	1.51
Granted	236,768,940	3.74
Forfeited	(6,991,000)	3.10
Vested	(101,574,270)	2.15
Outstanding as of December 31, 2021	137,243,670	4.81
Granted	62,410,200	1.63
Forfeited	(22,844,235)	2.11
Vested	(53,018,580)	4.36
Outstanding as of December 31, 2022	123,791,055	3.90

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of Reconciliation Between Effective Income Tax Rate and PRC Statutory Income Tax Rate

A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows:


	For the Years Ended December 31,
	2020		2021		2022
PRC statutory income tax rates	(25.0)	%	25.0	%	25.0	%
Permanent book-tax difference	(4.5)	%	1.4	%	(2.4)	%
Share-based compensation	0.2	%	3.4	%	5.5	%
Super deduction of R&D expense	(5.7)	%	(2.6)	%	(14.0)	%
Others	1.0	%	0.6	%	6.1	%
Different tax rates in other jurisdictions	2.0	%	(2.2)	%	2.0	%
Effect of tax holiday	4.4	%	(7.8)	%	(16.9)	%
Change in valuation allowance	23.1	%	(14.0)	%	12.6	%
Total	0.0	%	2.4	%	20.3	%
Effects of tax holidays entitled by the PRC subsidiaries	(9,553)		160,246		103,195
Effects of tax holidays entitled by the PRC subsidiaries on basic income (loss) per Class A and Class B ordinary share (RMB cent per share)	(0.41)		6.35		4.03

Schedule of Composition of Income Tax Expense

The current and deferred portions of income tax expense included in the consolidated statements of comprehensive income (loss) are as follows:


	For the Years Ended December 31,
	2020	2021	2022
Current income tax expense	—	149,152	217,856
Deferred income tax benefits	—	(99,044)	(93,854)
Income tax expense	—	50,108	124,002

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the deferred tax asset balances as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
Deferred tax assets
Tax losses carried forward	102,239	71,668
Write-down of inventories	10,771	108,229
Property, equipment and software	—	34,905
Share-based compensation	—	30,835
Allowance for doubtful accounts	1,314	1,416
Warranty reserve	2,704	967
Subtotal	117,028	248,020
Less: Valuation allowance	(17,984)	(96,610)
Deferred tax assets	99,044	151,410

Schedule of Movement of Valuation Allowance

Movement of valuation allowance is as follows:


	For the Years Ended December 31,
	2020	2021	2022
Beginning balance	254,039	304,790	17,984
Additions (decreases) during the year	50,751	(286,806)	78,626
Ending balance	304,790	17,984	96,610

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Schedule of Related Party Transactions

For the years ended December 31, 2020, 2021 and 2022, the related party transactions are as follows:


	For the Years Ended December 31,
	2020	2021	2022

Transaction amount with related parties
Disposal of motor vehicles	637	—	—
	637	—	—

Basic and Diluted Earnings (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Basic and Diluted Earnings (Loss) Per Share

Schedule of Earnings Per Share, Basic and Diluted


	For the Years Ended December 31,
	2020	2021	2022
Basic earnings (loss) per share calculation
Numerator:
Net income (loss)	(215,094)	2,000,282	486,357
Denominator:
Weighted-average ordinary shares outstanding	2,345,703,779	2,521,667,815	2,560,106,403
Basic earnings (loss) per Class A and Class B ordinary share (RMB cent per share)	(9.17)	79.32	19.00


	For the Years Ended December 31,
	2020	2021	2022
Diluted earnings (loss) per share calculation
Numerator:
Net income (loss)	(215,094)	2,000,282	486,357
Denominator:
Weighted-average ordinary shares outstanding	2,345,703,779	2,521,667,815	2,560,106,403
Add: weighted-average RSUs	—	54,489,432	17,785,666
Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share	2,345,703,779	2,576,157,247	2,577,892,069
Diluted earnings (loss) per Class A and Class B ordinary share (RMB cent per share)	(9.17)	77.65	18.87

Effects of Outstanding RSUs Excluded From Computation of Diluted Loss Per Share Due to Anti-Dilutive Effect

The potentially dilutive securities that have not been included in the calculation of diluted net loss per share as their inclusion would be anti- dilutive are as follows:


	For the Year
	Ended December 31,
	2020	2021	2022
Weighted-average RSUs	10,710,636	—	—
Share options	—	114,000,000	114,000,000
Warrants	—	70,833,345	—

Condensed Financial Information of the Parent Company (Tables)

12 Months Ended

Dec. 31, 2022

Condensed financial information of the parent company

Schedule of Condensed Balance Sheets

CONDENSED BALANCE SHEETS


	As of December 31,
	2021	2022
			US$
	RMB	RMB	(Note 2(e))
ASSETS
Current assets:
Cash	30,860	39,573	5,738
Prepayment for repurchase of ordinary shares	—	1,251	181
Total current assets	30,860	40,824	5,919
Non-current assets:
Investments in and receivables from subsidiaries	3,502,014	4,201,822	609,208
Total assets	3,532,874	4,242,646	615,127
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Refund from depository bank – current	2,013	2,199	319
Other payable	—	557	81
Non-current liabilities:
Refund from depository bank – non-current	5,824	4,163	604
Warrant liability	66,347	—	—
Total liabilities	74,184	6,919	1,004
Shareholders’ equity:
Ordinary shares	1	1	—
Subscriptions receivable from shareholders	(1)	(1)	—
Treasury stocks	(231,281)	(380,538)	(55,173)
Additional paid-in capital	2,891,134	3,298,531	478,242
Statutory reserves	97,420	102,586	14,874
Accumulated other comprehensive loss	(101,925)	(4,844)	(702)
Retained earnings	803,342	1,219,992	176,882
Total shareholders’ equity	3,458,690	4,235,727	614,123
Total liabilities and shareholders’ equity	3,532,874	4,242,646	615,127

Schedule of Condensed Statements of Comprehensive Loss

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS


	For the year ended December 31,
	2020	2021	2022
				US$
	RMB	RMB	RMB	(Note 2(e))
Operating expenses:
Research and development expenses	(652)	—	—	—
Sales and marketing expenses	(41)	—	—	—
General and administrative expenses	(2,277)	(6,668)	(20,968)	(3,040)
Loss from operations	(2,970)	(6,668)	(20,968)	(3,040)
Interest income	—	1	7	1
Other income, net	2,425	2,037	2,122	308
Change in fair value of warrant liability	—	190,178	24,598	3,566
Share of income (losses) from subsidiaries	(214,549)	2,306,195	416,058	60,323
Net income (loss)	(215,094)	2,491,743	421,817	61,158
Foreign currency translation adjustment, net of nil tax	(24,238)	(22,145)	97,081	14,075
Total comprehensive income (loss)	(239,332)	2,469,598	518,898	75,233

Schedule of Condensed Statements of Cash Flows

CONDENSED STATEMENTS OF CASH FLOWS


	For the year ended December 31,
	2020	2021	2022
				US$
	RMB	RMB	RMB	(Note 2(e))
Cash flows from operating activities
Receipt of refund from depository bank	13,285	—	—	—
Other cash used in operating activities	(1)	(6,462)	(21,439)	(3,108)
Net cash provided by (used in) operating activities	13,284	(6,462)	(21,439)	(3,108)
Cash flows from investing activities
Decrease (increase) in receivables from subsidiaries	28,451	(871,194)	305,529	44,298
Net cash provided by (used in) investing activities	28,451	(871,194)	305,529	44,298
Cash flows from financing activities
Repurchase of warrants	—	—	(44,282)	(6,420)
Payment for repurchase of ordinary shares	(23,915)	(103,543)	(234,307)	(33,970)
Prepayment under share repurchase agreement	(16,146)	(573)	—	—
Payment for cost of issuance	—	(519)	—	—
Proceeds from issuance of ordinary shares and warrants	—	1,029,455	—	—
Net cash provided by (used in) financing activities	(40,061)	924,820	(278,589)	(40,390)
Net increase in cash	1,674	47,164	5,501	799
Effect of exchange rate changes on cash	(1,541)	(16,451)	3,212	466
Cash, beginning of year	14	147	30,860	4,474
Cash, end of year	147	30,860	39,573	5,739

Organization and Principal Activities - Schedule of Subsidiaries (Details)	12 Months Ended
	Dec. 31, 2022
Canaan Creative (HK) Holdings Limited
Organization and Principal Activities
Name of subsidiaries	Canaan Creative (HK) Holdings Limited
Date of incorporation	Feb. 22, 2018
Place of incorporation	Hong Kong Special Administrative Region
Equity interest held	100.00%
Principal activities	Research and development of ICs
Canaan Creative Co., Ltd
Organization and Principal Activities
Name of subsidiaries	Canaan Creative Co., Ltd.
Date of incorporation	Apr. 01, 2013
Place of incorporation	Beijing, China
Equity interest held	100.00%
Principal activities	Research and development of ICs
Langfang Creative Technology Co., Ltd
Organization and Principal Activities
Name of subsidiaries	Langfang Creative Technology Co., Ltd.
Date of incorporation	May 15, 2014
Place of incorporation	Langfang, China
Equity interest held	100.00%
Principal activities	Assembly of mining equipment and spare parts
Canaan Convey Co., Ltd
Organization and Principal Activities
Name of subsidiaries	Canaan Convey Co., Ltd.
Date of incorporation	Nov. 02, 2017
Place of incorporation	Beijing, China
Equity interest held	100.00%
Principal activities	International distribution of mining equipment and spare parts
Zhejiang Avalon Technology Co., Ltd
Organization and Principal Activities
Name of subsidiaries	Zhejiang Avalon Technology Co., Ltd.
Date of incorporation	Dec. 05, 2017
Place of incorporation	Hangzhou, China
Equity interest held	100.00%
Principal activities	Distribution of mining equipment and spare parts
Canaan Creative (SH) Co., Ltd.
Organization and Principal Activities
Name of subsidiaries	Canaan Creative (SH) Co., Ltd.
Date of incorporation	Jan. 27, 2021
Place of incorporation	Shanghai, China
Equity interest held	100.00%
Principal activities	Research and development of ICs
Canaan Creative International PTE Limited
Organization and Principal Activities
Name of subsidiaries	Canaan Creative International PTE. Ltd
Date of incorporation	Mar. 09, 2021
Place of incorporation	Singapore
Equity interest held	100.00%
Principal activities	Mining business
Hangzhou Canaan Intelligence Information Technology Co., Ltd.
Organization and Principal Activities
Name of subsidiaries	Hangzhou Canaan Intelligence Information Technology Co., Ltd.
Date of incorporation	Apr. 09, 2013
Place of incorporation	Hangzhou, China
Equity interest held	100.00%
Principal activities	Research and development of ICs
Canaan Bright Sight Co., Ltd.
Organization and Principal Activities
Name of subsidiaries	Canaan Bright Sight Co., Ltd.
Date of incorporation	Dec. 24, 2018
Place of incorporation	Beijing, China
Equity interest held	100.00%
Principal activities	International distribution of AI products
Canaan Creative Global Pte. Ltd
Organization and Principal Activities
Name of subsidiaries	Canaan Creative Global Pte. Ltd.
Date of incorporation	Sep. 18, 2021
Place of incorporation	Singapore
Equity interest held	100.00%
Principal activities	International headquarters, research and development ofICs, international distribution ofmining equipments and spare parts
Canaan U.S. Inc
Organization and Principal Activities
Name of subsidiaries	Canaan U.S. Inc.
Date of incorporation	Feb. 01, 2022
Place of incorporation	United States
Equity interest held	100.00%
Principal activities	International distribution ofmining equipments and spareparts, mining business

Summary of significant accounting policies (Details) ₸ in Thousands, ¥ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) segment	Dec. 31, 2022 USD ($) segment	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 HKD ($)	Dec. 31, 2022 KZT (₸)	Dec. 31, 2022 SGD ($)
Summary of significant accounting policies
Foreign currency convenience translation of amounts from RMB into US$	6.8972				6.8972	6.8972	6.8972	6.8972
Investment income	¥ 0		¥ 277	¥ 5,844
Accounts payable	116,333		143,441		$ 16,867
Non-current financial investment	20,000		20,000		2,900
Impairment charge to non-current financial investment	0		25	2,475
Operating lease asset	¥ 29,600		30,920		4,292
Operating lease assets, estimated economic useful life	18 months	18 months
Prepayment received from customers	¥ 4,613		1,340,731		669
Revenue recognized from contract liability	¥ 1,323,344		424,426	8,008
Payment terms under credit sales	The payment terms under credit sales generally consist of 50% down payment and 50% subsequent payments over a period of 90 to 180 days.	The payment terms under credit sales generally consist of 50% down payment and 50% subsequent payments over a period of 90 to 180 days.
Price concessions	¥ 0		0	11,455
Adjustment to the previously estimated variable considerations	¥ 0		0	14,685
Standard product warranty	360 days that the product will operate under normal use	360 days that the product will operate under normal use
Advertising expense	¥ 6,771		4,461	3,701
Employee social security and welfare benefit expenses	¥ 47,154		27,740	14,919
Appropriation to statutory general reserve percentage	10.00%	10.00%
Statutory general reserve required maximum percentage of registered capital	50.00%	50.00%
Number of operating segment \| segment	1	1
Number of reportable segment \| segment	1	1
Warranty costs incurred	¥ 12,742		28,826	764
Impairment of indefinitely lived intangible assets	¥ 52,959	$ 7,678
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration]	Impairment of indefinitely lived intangible assets	Impairment of indefinitely lived intangible assets
Bank Time Deposits [Member]
Summary of significant accounting policies
Bank deposits insured by government authorities	¥ 20,248		11,579
CHINA \| Deposits With Financial Institution [Member]
Summary of significant accounting policies
Bank deposits insured by government authorities	500
HONG KONG \| Deposits With Financial Institution [Member]
Summary of significant accounting policies
Bank deposits insured by government authorities \| $						$ 500
UNITED STATES
Summary of significant accounting policies
Long lived assets, net	349,688
UNITED STATES \| Deposits With Financial Institution [Member]
Summary of significant accounting policies
Bank deposits insured by government authorities \| $					$ 250
SINGAPORE \| Deposits With Financial Institution [Member]
Summary of significant accounting policies
Bank deposits insured by government authorities \| $								$ 75
KAZAKHSTAN \| Deposits With Financial Institution [Member]
Summary of significant accounting policies
Bank deposits insured by government authorities \| ₸							₸ 15,000
Central Asia
Summary of significant accounting policies
Long lived assets, net	173,505
Assets Subject To Operating Lease [Member]
Summary of significant accounting policies
Operating lease asset	0		0
Government Grants
Summary of significant accounting policies
Government grants received	¥ 19,226		5,699	32,499
Minimum
Summary of significant accounting policies
Value added tax recoverable percentage	6.00%	6.00%
Maximum
Summary of significant accounting policies
Value added tax recoverable percentage	12.00%	12.00%
Statutory Reserves
Summary of significant accounting policies
Profit appropriations to statutory reserves	¥ 5,166		113	¥ 0
Cryptocurrency
Summary of significant accounting policies
Accounts payable	¥ 0		¥ 2,500

Summary of significant accounting policies - Summary of Assets and liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring - Warrant [Member] ¥ in Thousands	Dec. 31, 2021 CNY (¥)
Summary of significant accounting policies
Warrant liability	¥ 66,347
Level 3
Summary of significant accounting policies
Warrant liability	¥ 66,347

Summary of significant accounting policies - Summary of Cash and Cash Equivalents (Details) ¥ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		¥ 707,261	¥ 2,684,342
Deposits with signature bank
Disclosure Of Significant Accounting Policies [Line Items]
Cash deposits \| $	$ 1.1
China
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		11	39,746
Overseas
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		16,406	317
China, Yuan Renminbi \| China
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		77,373	1,167,445
China, Yuan Renminbi \| Overseas
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		56	0
United States of America, Dollars \| China
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		430,006	1,447,336
United States of America, Dollars \| Overseas
Disclosure Of Significant Accounting Policies [Line Items]
Cash and cash equivalents, at carrying value		¥ 183,409	¥ 29,498

Summary of significant accounting policies - Schedule of Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2022
Leasehold Improvements
Property, Equipment and Software
Estimated useful lives	the shorter of their useful lives and the lease terms
Computers and Electronic Equipment \| Minimum
Property, Equipment and Software
Estimated useful lives	3 years
Computers and Electronic Equipment \| Maximum
Property, Equipment and Software
Estimated useful lives	5 years
Mechanical Equipment
Property, Equipment and Software
Estimated useful lives	5 years
Mining Equipment
Property, Equipment and Software
Estimated useful lives	1 year 6 months
Motor Vehicles
Property, Equipment and Software
Estimated useful lives	5 years
Software
Property, Equipment and Software
Estimated useful lives	3 years

Summary of significant accounting policies - Summary of Revenue Segregated by Geographic Region (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Summary of significant accounting policies
Total net revenues	¥ 4,378,907	$ 634,882	¥ 4,986,706	¥ 447,686
Mainland China
Summary of significant accounting policies
Total net revenues	122,770		1,779,923	379,418
Kazakhstan
Summary of significant accounting policies
Total net revenues	386,768		711,596	47,792
Cyprus
Summary of significant accounting policies
Total net revenues	243,500		633,322
Canada
Summary of significant accounting policies
Total net revenues	122,799		402,489	162
Malaysia
Summary of significant accounting policies
Total net revenues	802,063
Indonesia
Summary of significant accounting policies
Total net revenues	1,446,347
Australia
Summary of significant accounting policies
Total net revenues	405,808		361,377	114
United States of America
Summary of significant accounting policies
Total net revenues	631,243		312,722	3,528
Thailand
Summary of significant accounting policies
Total net revenues	18,644		289,013	31
Sweden
Summary of significant accounting policies
Total net revenues	6,285		152,127	8
Hong Kong Special Administrative Region
Summary of significant accounting policies
Total net revenues	149,488		87,971	12,301
Laos
Summary of significant accounting policies
Total net revenues	32,660
Other Foreign Countries
Summary of significant accounting policies
Total net revenues	¥ 10,532		¥ 256,166	¥ 4,332

Risks and Concentration - Summary of Accounts Receivable Concentration of Credit risk and Customers Contribution of Total Revenue (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Concentration of Credit Risk \| Accounts Receivable \| Customer A
Risks and Concentration
Concentration risk, percentage		52.00%
Customer Concentration Risk \| Total Revenue \| Customer B
Risks and Concentration
Concentration risk, percentage	33.00%
Customer Concentration Risk \| Total Revenue \| Customer C
Risks and Concentration
Concentration risk, percentage	22.00%	18.00%
Customer Concentration Risk \| Total Revenue \| Customer D
Risks and Concentration
Concentration risk, percentage	16.00%

Risks and Concentration (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Risks and Concentration
Accounts receivable current		¥ 367
Credit Concentration Risk [Member]
Risks and Concentration
Accounts receivable current	¥ 0	¥ 367

Restricted cash (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Restricted cash
Restricted cash	¥ 0	$ 0	¥ 47,362	¥ 4,494
Restricted cash	¥ 0

Inventories - Schedule of Inventories (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Inventories
Raw materials	¥ 789,134		¥ 429,208
Finished goods	423,420		304,801
Work in process	261,436		78,354
Total	¥ 1,473,990	$ 213,708	¥ 812,363

Inventories (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
Inventories (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Inventories
Inventory write-down	¥ 467,271	$ 67,748	¥ 50,714	¥ 44,916
Reclassification of inventory to operating lease assets at the beginning of lease period	0		15,169	135,276
Reclassification of operating lease assets to inventory at the end of lease period	0		12,051	115,887
Depreciation expense of operating lease assets			3,118	19,389
Cost of Revenues
Inventories
Depreciation expense of operating lease assets	¥ 0		¥ 3,118	¥ 19,389

Prepayments and Other Assets - Summary of Prepayments and Other Assets (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Prepayments and Other Assets
Prepayments to vendors	¥ 1,105,194		¥ 1,427,820
VAT recoverable	396,701		260,571
Prepayment for repurchase of ordinary shares	24		15,901
VAT refund for export sales	107,549		14,041
Deferred charges	42,943
Deposits	23,183		1,494
Others	13,485		9,200
Prepayments and other current assets	1,689,079	$ 244,893	1,729,027
Other non-current assets
Rental and other deposits	17,046		2,956
Prepayments for purchase of software	391
Other non-current assets	¥ 17,437	$ 2,528	¥ 2,956

Prepayments and Other Assets - Summary of Prepayments and Other Assets (Parenthetical) (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Prepayments and Other Assets
Write-downs of prepayments	¥ (86,216)	$ (12,500)	¥ 0
Allowance for credit loss, other receivables	90		911	¥ 4,849
Foundry Service [Member]
Prepayments and Other Assets
Purchase obligation to third parties	¥ 465,709		¥ 917,346

Cryptocurrency - Schedule of Cryptocurrency (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Crypto Currency [Abstract]
Gross carrying amount	¥ 104,997	¥ 21,371
Impairment on cryptocurrency	(17,724)	(1,061)
Net	¥ 87,273	¥ 20,310

Cryptocurrency - Additional information (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Cryptocurrency
Beginning balance	¥ 20,310
Revenue recognized on acceptance of cryptocurrency	238,596	$ 34,593	¥ 21,688
Cost recognized on payment of cryptocurrency	56,877	8,246
Proceeds from disposal of cryptocurrency	(64,806)	(9,396)
Realised gain on sale of cryptocurrency	(1,167)	(169)
Impairment of indefinitely lived intangible assets	52,959	$ 7,678
Ending balance	87,273		20,310
Cryptocurrency
Cryptocurrency
Beginning balance	20,310
Revenue recognized on acceptance of cryptocurrency	238,596		21,688
Cost recognized on payment of cryptocurrency	(56,877)
Proceeds from disposal of cryptocurrency	(64,806)
Realised gain on sale of cryptocurrency	(1,167)
Impairment of indefinitely lived intangible assets	(52,959)		(1,061)
Foreign currency translation adjustment	4,176		(317)
Ending balance	¥ 87,273		¥ 20,310

Property, Equipment and Software - Schedule of Property, Equipment and Software (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Property, Equipment and Software
Total cost	¥ 841,663		¥ 210,052
Less: Accumulated depreciation and amortization	(243,675)		(24,486)
Property, equipment and software, net	597,988	$ 86,700	185,566
Mining Equipment
Property, Equipment and Software
Total cost	720,666		146,881
Computers and Electronic Equipment
Property, Equipment and Software
Total cost	69,698		27,492
Leasehold Improvements
Property, Equipment and Software
Total cost	33,466		21,412
Mechanical Equipment
Property, Equipment and Software
Total cost	855		7,694
Software
Property, Equipment and Software
Total cost	16,437		5,438
Construction in Progress
Property, Equipment and Software
Total cost			665
Motor Vehicles
Property, Equipment and Software
Total cost	¥ 541		¥ 470

Property, Equipment and Software - Schedule of Depreciation and Amortization Expenses (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Property, Equipment and Software
Depreciation and amortization of property, equipment and software	¥ 226,419	$ 32,828	¥ 11,009	¥ 11,852
General and administrative expenses
Property, Equipment and Software
Depreciation and amortization of property, equipment and software	11,954		6,439	7,680
Research and development expenses
Property, Equipment and Software
Depreciation and amortization of property, equipment and software	6,047		2,826	3,874
Cost of Revenues
Property, Equipment and Software
Depreciation and amortization of property, equipment and software	208,362		1,715	217
Sales and marketing expenses
Property, Equipment and Software
Depreciation and amortization of property, equipment and software	¥ 56		¥ 29	¥ 81

Leases - Components of Lease Expenses (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Lease cost:
Reduction in the carrying amount of ROU assets	¥ 15,701		¥ 17,584	¥ 13,432
Interest of lease liabilities	1,342	$ 195	1,613	1,938
Expenses for short-term lease within 12 months	1,506		443	505
Total lease cost	¥ 18,549		¥ 19,640	¥ 15,875

Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	¥ 20,507	¥ 20,739	¥ 14,322
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities	16,704	36,672	5,516
Lease liability settled through termination of lease:
Operating leases	¥ 2,493	¥ 2,590	¥ 427

Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Leases
Weighted-average remaining lease term Operating leases	1 year 10 months 24 days	2 years 4 months 24 days	1 year 3 months 18 days
Weighted-average discount rate Operating lease	4.58%	5.17%	6.73%

Leases - Schedule of Maturities of Lease Liabilities (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Leases
2022	¥ 16,934
2023	8,762
2024 and thereafter	1,486
Total undiscounted lease payments	27,182
Less: imputed interest	(1,025)
Operating lease liabilities	26,157
Amounts due within 12 months	16,118	$ 2,337	¥ 14,819
Non-current lease liability	¥ 10,039	$ 1,456	¥ 16,292

Accrued Liabilities and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Accrued Liabilities and Other Liabilities
Salary and welfare payable	¥ 144,473		¥ 118,712
Provision for reserve for inventory purchase commitments	75,847		0
Other tax payables	56,116		19,128
Customer refund	29,432		10,738
Warranty reserve (Note b)	11,953		18,026
Refund from depository bank - current	2,199		2,013
VAT payable	748		128,939
VAT received from customers related to contract liabilities	135		2,427
Withholding tax payables due to restricted share units (Note c)			126,198
Rental deposits			2,120
Others	15,802		9,093
Total	336,705	$ 48,814	437,394
Other non-current liabilities
Refund from depository bank - non-current	¥ 4,163		¥ 5,824

Accrued Liabilities and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Parenthetical) (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Accrued Liabilities and Other Liabilities
Provision for reserve for inventory purchase commitments	¥ 75,847	$ 10,997
Withholding tax payable restricted share units current.			¥ 126,198
Foundry Service
Accrued Liabilities and Other Liabilities
Provision for reserve for inventory purchase commitments	75,847		0
Purchase obligation to third parties	¥ 465,709		¥ 917,346

Accrued liabilities and other liabilities - Schedule of Product Warranty Liability (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Accrued Liabilities and Other Liabilities
Accrued warranty-beginning of year	¥ 18,026	¥ 0
Accrual for warranties issued during the year	12,742	28,826
Warranty claims paid	(7,843)	(10,800)
Warranty expired	(10,972)
Accrued warranty-end of year	¥ 11,953	¥ 18,026

Warrants - Summary of Significant Unobservable Inputs Used In Calculation Of Warrant Liability (Details) - Warrants To Purchase Common Stock	Jun. 23, 2022 Y	Dec. 31, 2021 Y
Risk Free Rate \| Maximum
Warrants
Fair value of the warrant liability	2.63	0.81
Risk Free Rate \| Minimum
Warrants
Fair value of the warrant liability	2.32	0.37
Volatility \| Maximum
Warrants
Fair value of the warrant liability	140.39	127.93
Volatility \| Minimum
Warrants
Fair value of the warrant liability	126.66	131.47
Expected dividend yield
Warrants
Fair value of the warrant liability	0	0
Expected term \| Maximum
Warrants
Fair value of the warrant liability	2.1	3
Expected term \| Minimum
Warrants
Fair value of the warrant liability	1.9	2.3

Warrants - Additional Information (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands				12 Months Ended
	Jun. 23, 2022 CNY (¥) shares	Jun. 23, 2022 USD ($) $ / shares shares	May 03, 2021 CNY (¥) shares	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	May 01, 2021 $ / shares shares
Warrants
Payments for repurchase of warrants				¥ 44,282	$ 6,420
Change in fair value of warrant liability			¥ (258,782)	¥ 24,598	$ 3,566	¥ 190,178	¥ 0
ADR [Member]
Warrants
Class of warrant or right, number of securities called by warrants or rights			674,603
ADR [Member] \| Warrants \| Separate warrant repurchase agreements
Warrants
Price paid per share \| $ / shares		$ 1.4
Shares outstanding	4,722,223	4,722,223
Class A ordinary shares
Warrants
Class of warrant or right, number of securities called by warrants or rights			10,119,045
Class A ordinary shares \| Warrants
Warrants
Class of warrant or right, exercise price of warrants or rights \| $ / shares								$ 1.05
Class A ordinary shares \| Warrants \| Separate warrant repurchase agreements
Warrants
Shares outstanding	70,833,345	70,833,345
Tranche One \| ADR [Member] \| Warrants To Purchase Common Stock
Warrants
Class of warrant or right, exercise price of warrants or rights \| $ / shares								16.38
Tranche One \| Class A ordinary shares \| Warrants To Purchase Common Stock
Warrants
Class of warrant or right, exercise price of warrants or rights \| $ / shares								1.09
Tranche Two \| ADR [Member] \| Warrants
Warrants
Class of warrant or right, exercise price of warrants or rights \| $ / shares								$ 15.75
Tranche Two \| ADR [Member] \| Warrants To Purchase Common Stock
Warrants
Class of warrant or right, number of securities called by warrants or rights								674,603
Tranche Two \| Class A ordinary shares \| Warrants To Purchase Common Stock
Warrants
Class of warrant or right, number of securities called by warrants or rights								10,119,045
Investor Warrants \| Tranche One \| Warrants \| Separate warrant repurchase agreements
Warrants
Payments for repurchase of warrants \| $		$ 6,600
Investor Warrants \| Tranche One \| ADR [Member] \| Warrants To Purchase Common Stock
Warrants
Class of warrant or right, number of securities called by warrants or rights								4,047,620
Payments for repurchase of warrants \| ¥	¥ 44,300
Investor Warrants \| Tranche One \| Class A ordinary shares \| Warrants To Purchase Common Stock
Warrants
Class of warrant or right, number of securities called by warrants or rights								60,714,300

Warrants - Movement of warrant liability (Details) - Warrant liability - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Movement of warrant liability
Beginning balance	¥ 66,347
Issuance of warrant		¥ 258,782
Change in fair value of warrant liability	(24,598)	(190,178)
Repurchase of warrant liability	(44,282)
Foreign currency translation adjustment	¥ 2,533	(2,257)
Ending balance		¥ 66,347

Ordinary shares - Additional Information (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands			12 Months Ended
	May 03, 2021 CNY (¥) shares	Nov. 25, 2020 shares	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2021 $ / shares shares	Jan. 01, 2020 shares
Ordinary shares
Ordinary shares, shares authorized				1,000,000,000,000			1,000,000,000,000	1,000,000,000,000
Ordinary shares, shares issued				2,804,138,492			2,804,138,492	2,372,222,222
Ordinary shares, par value \| $ / shares				$ 0.00000005			$ 0.00000005
Common stock shares outstanding				2,496,001,757			2,577,386,552	2,350,123,270
Change in fair value of warrant liability	¥ (258,782)		¥ 24,598	$ 3,566	¥ 190,178	¥ 0
Proceeds from Issuance of Common Stock \| ¥	¥ 770,673
ADR
Ordinary shares
Issuance of ordinary shares (in shares)	4,047,620
Class of warrant or right, number of securities called by warrants or rights	674,603
Class A ordinary shares
Ordinary shares
Shares issued upon conversion		45,000,000
Issuance of ordinary shares \| ¥	¥ 1,029,455
Common stock vote per share			one vote	one vote
Common stock shares outstanding				2,184,377,313				1,993,498,826
Class of warrant or right, number of securities called by warrants or rights	10,119,045
Class B Ordinary Shares
Ordinary shares
Shares converted		45,000,000
Common stock vote per share			fifteen votes	fifteen votes
Common stock shares outstanding				311,624,444
Class B Ordinary Shares \| Chairman and CEO
Ordinary shares
Common stock shares outstanding								356,624,444
Institutional Investors \| ADR
Ordinary shares
Issuance of ordinary shares (in shares)	13,492,065
Institutional Investors \| Class A ordinary shares
Ordinary shares
Issuance of ordinary shares (in shares)	202,380,975
Class of warrant or right, number of securities called by warrants or rights	60,714,300

Treasury Stocks - Additional Information (Details) ¥ in Thousands, $ in Millions		1 Months Ended			12 Months Ended
	May 03, 2021 CNY (¥) shares	Sep. 30, 2021 shares	May 31, 2021 shares	Jan. 31, 2020 shares	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2020 CNY (¥) shares	Mar. 16, 2022 USD ($)	Sep. 09, 2020 USD ($)	Jan. 01, 2020 shares	Apr. 30, 2018 shares
Equity Class Of Treasury Stock
Common stock shares outstanding					2,496,001,757	2,577,386,552				2,350,123,270
Treasury stock, shares					308,136,735	226,751,940
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation \| ¥					¥ 31,097	¥ 150,705
2018 Equity Incentive Plan
Equity Class Of Treasury Stock
Ordinary shares Held in trust											51,624,000
Restricted Share Units \| 2018 Equity Incentive Plan
Equity Class Of Treasury Stock
Shares transferred from treasury stock to ordinary shares						5,757,945	4,002,052
Restricted Share Units \| Amended 2018 Plan
Equity Class Of Treasury Stock
Treasury stock, shares					9,867,045	83,097,225
Number of shares transferred from treasury stock to ordinary shares upon vesting					53,018,580
Restricted Ordinary Shares \| 2018 Equity Incentive Plan
Equity Class Of Treasury Stock
Treasury stock, shares					12,338,955	12,338,955
Restricted Ordinary Shares \| Amended 2018 Plan
Equity Class Of Treasury Stock
Treasury stock, shares						95,816,325
Restricted Ordinary Shares \| Initial Public Offering \| 2018 Equity Incentive Plan
Equity Class Of Treasury Stock
Restricted share units vested transferred from treasury stocks to ordinary shares				22,098,952
Shares Repurchase
Equity Class Of Treasury Stock
Share repurchased					154,614,975	34,683,225	25,799,190
Proceeds from repurchases \| ¥					¥ 253,079	¥ 103,543	¥ 23,915
Shares Repurchase \| Restricted Ordinary Shares
Equity Class Of Treasury Stock
Treasury stock, shares					215,097,390
Share Repurchase Program
Equity Class Of Treasury Stock
Stock repurchase program authorized amount \| $								$ 100	$ 10
ADR
Equity Class Of Treasury Stock
Stock Issued During Period, Shares, New Issues	4,047,620
ADR \| Shares Repurchase
Equity Class Of Treasury Stock
Common stock shares outstanding					10,307,665	2,312,215	1,719,946
Class A ordinary shares
Equity Class Of Treasury Stock
Common stock shares outstanding					2,184,377,313					1,993,498,826
Stock Issued During Period, Value, New Issues \| ¥	¥ 1,029,455
Class A ordinary shares \| Amended 2018 Plan
Equity Class Of Treasury Stock
Ordinary shares contributed for future share awards		63,774,885	63,774,885
Share-based payment arrangement, shares withheld for tax withholding obligation					17,102,175	33,255,495
Shares Issued in Period		94,927,065	94,927,065
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation \| ¥					¥ 31,097	¥ 150,705
Stock Issued During Period, Shares, New Issues					37,313,775	13,043,895
Stock Issued During Period, Value, New Issues \| ¥					¥ 134,919	¥ 45,728

Share-Based Compensation - Additional Information (Details) - CNY (¥) ¥ in Thousands		1 Months Ended		12 Months Ended
	Sep. 30, 2021	May 31, 2021	Apr. 30, 2021	Dec. 31, 2022	Dec. 31, 2021
Share-based compensation
Number of options granted				0	114,000,000
2018 Equity Incentive Plan \| Common Class A
Share-based compensation
Share-Based Compensation Arrangement By Share-Based Payment Award Cumulative Annual Increase Percentage			15.00%
Share-based compensation arrangement by share-based payment award, percentage of outstanding stock maximum			3.00%
Number of additional shares authorized for issuance under share-based payment arrangement	63,774,885	94,927,065
Amended 2018 Plan \| Common Class A
Share-based compensation
Issuance of ordinary shares (in shares)				37,313,775	13,043,895
Share Options
Share-based compensation
weighted-average period for recognization of unrecognized compensation expense related to share options				23 months 9 days
Unrecognized compensation expense related to share options				¥ 145,063
Restricted Share Units
Share-based compensation
Restricted share units granted				62,410,200	236,768,940
Unrecognized compensation expense				¥ 346,568
weighted-average period for recognization of unrecognized compensation expense related to share options				31 months 19 days
Restricted Share Units \| Amended 2018 Plan
Share-based compensation
Restricted share units granted				62,410,200
Requisite service period				5 years
Restricted Ordinary Shares \| Amended 2018 Plan
Share-based compensation
Restricted share units granted				62,410,200

Share-Based Compensation - Summary of Restricted Shares Activity (Details) - Restricted Share Units - ¥ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-based compensation
Number of shares, Outstanding	137,243,670	9,040,000	15,733,334
Number of shares, Granted	62,410,200	236,768,940
Number of shares, Forfeited	(22,844,235)	(6,991,000)	(2,691,282)
Number of shares, Vested	(53,018,580)	(101,574,270)	(4,002,052)
Number of shares, Outstanding	123,791,055	137,243,670	9,040,000
Weighted average grant date fair value, Outstanding	¥ 4.81	¥ 1.51	¥ 1.51
Weighted average grant date fair value, Granted	1.63	3.74
Weighted average grant date fair value, Forfeited	2.11	3.10	1.51
Weighted average grant date fair value, Vested	4.36	2.15	1.51
Weighted average grant date fair value, Outstanding	¥ 3.90	¥ 4.81	¥ 1.51

Share-based compensation - Schedule of Stock Options Activity (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share Options
Number of shares , Beginning Balance	114,000,000	0
Number of options granted	0	114,000,000
Number of shares , Ending Balance	114,000,000	114,000,000
Number of shares , Expected to vest	114,000,000
Number of shares , Exercisable	42,000,000
Share Based Compensation Arrangement By Share Based Payment Award Options Weighted Average Exercise Price [Abstract]
Weighted-Average per Share Exercise Price , Beginning Balance	¥ 4.90	¥ 0
Weighted-Average per Share Exercise Price , Granted		4.90
Weighted-Average per Share Exercise Price , Ending Balance	4.90	¥ 4.90
Weighted-Average per Share Exercise Price, Expected to vest	4.90
Weighted-Average per Share Exercise Price , Exercisable	¥ 4.90
Share-Based Compensation Arrangement by Share-Based Payment Award Options Weighted Average Remaining Contractual Terms [Abstract]
Weighted Average Remaining Contractual Term, Expected to vest	8 years 1 month 13 days	9 years 1 month 6 days
Share-Based Compensation Arrangements By Share-Based Payment Award Options Aggregate Intrinsic Value [Abstract]
Aggregate Intrinsic Value, Beginning balance	¥ 0	¥ 0
Aggregate Intrinsic Value, Granted		0
Aggregate Intrinsic Value, Ending balance	0	¥ 0
Aggregate Intrinsic Value, Expected to vest	0
Aggregate Intrinsic Value, Exercisable	¥ 0

Share-based compensation - Summary of Fair Values of the Share Options Granted (Details)	12 Months Ended
	Dec. 31, 2021 ¥ / shares
Share-Based Compensation
Weighted average grant date fair value of option per share	¥ 6.63
Aggregate grant date fair value of options	¥ 465,553

Share-based compensation - Summary of Assumptions Used to determine the Fair Value of Stock Options (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares
Share-based compensation
Dividend yield	0.00%
Expected term	10 years
Exercise multiple	2.80
Maximum
Share-based compensation
Risk-free rate of return	1.85%
Expected volatility	142.01%
Fair value of ordinary share	$ 17.51
Minimum
Share-based compensation
Risk-free rate of return	1.25%
Expected volatility	136.91%
Fair value of ordinary share	$ 3.78

Income Taxes - Additional Information (Details) - CNY (¥) ¥ in Thousands		12 Months Ended
	Mar. 16, 2007	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2017	Dec. 31, 2019
Income Taxes
Statutory income tax rate		25.00%
Preferential tax rate		15.00%
Income tax holiday, description		Canaan is qualified as an integrated circuit enterprise and enjoying a 5-year tax holiday (two year full exemption followed by three year half reduction) beginning from 2016 after utilizing all prior years tax losses. Therefore, Hangzhou Canaan is eligible to enjoy a preferential tax rate of 0% from 2016 to 2017 and 12.5% from 2018 to 2020.
Income tax holiday period		5 years
Income tax full exemption holiday period		2 years
Income tax half reduction holiday period		3 years
Withholding income tax rate on dividends		10.00%
Undistributed earnings available for distribution		¥ 1,628,165
Withholding income tax		0	¥ 0
Tax loss carry forwards		¥ 373,683	437,187
Tax loss carry forwards period		10 years			5 years
Operating loss carry forwards expiration start year		2030
Operating loss carry forwards expiration end year		2033
Deferred tax assets valuation allowance		¥ 96,610	¥ 17,984	¥ 304,790		¥ 254,039
Other PRC Subsidiaries
Income Taxes
Statutory income tax rate		25.00%
PRC mainland and Hong Kong subsidiaries
Income Taxes
Operating Loss Carryforwards, Limitations on Use		tax losses of RMB1,581, RMB17,173, nil and RMB3,804 will expire, if unused, by 2030, 2031, 2032 and 2033, respectively.
Tax Year 2016 to 2017
Income Taxes
Preferential tax rate		0.00%
Tax Year 2018 to 2020
Income Taxes
Preferential tax rate		12.50%
Tax Year 2019 to 2021
Income Taxes
Preferential tax rate		15.00%
2030 \| PRC mainland and Hong Kong subsidiaries
Income Taxes
Operating Loss Carryforwards, Subject to Expiration		¥ 1,581
Operating Loss Carryforwards, Expiration year		2030
2031 \| PRC mainland and Hong Kong subsidiaries
Income Taxes
Operating Loss Carryforwards, Subject to Expiration		¥ 17,173
Operating Loss Carryforwards, Expiration year		2031
2032 \| PRC mainland and Hong Kong subsidiaries
Income Taxes
Operating Loss Carryforwards, Subject to Expiration		¥ 0
2033 \| PRC mainland and Hong Kong subsidiaries
Income Taxes
Operating Loss Carryforwards, Subject to Expiration		¥ 3,804
Operating Loss Carryforwards, Expiration year		2033
Hong Kong
Income Taxes
Statutory income tax rate		16.50%	16.50%	16.50%
Hong Kong \| FIE
Income Taxes
Ownership percentage		25.00%
Hong Kong \| Maximum
Income Taxes
Withholding income tax rate		5.00%
China \| Enterprise Income Tax
Income Taxes
Statutory income tax rate	25.00%
United States
Income Taxes
Statutory income tax rate		21.00%	21.00%	21.00%
Singapore
Income Taxes
Statutory income tax rate		17.00%	17.00%	17.00%

Income Taxes - Schedule of Reconciliation Between Effective Income Tax Rate and PRC Statutory Income Tax Rate (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
PRC statutory income tax rates	25.00%	25.00%	(25.00%)
Permanent book - tax difference	(2.40%)	1.40%	(4.50%)
Share-based compensation	5.50%	3.40%	0.20%
Super deduction of R&D expense	(14.00%)	(2.60%)	(5.70%)
Others	6.10%	0.60%	1.00%
Different tax rates in other jurisdictions	2.00%	(2.20%)	2.00%
Effect of tax holiday	(16.90%)	(7.80%)	4.40%
Change in valuation allowance	12.60%	(14.00%)	23.10%
Total	20.30%	2.40%	0.00%
Effects of tax holidays entitled by the PRC subsidiaries	¥ 103,195	¥ 160,246	¥ (9,553)
Class A and ClassB
Income Taxes
Effects of tax holidays entitled by the PRC subsidiaries on basic income (loss) earnings per Class A and Class B ordinary share (RMB cent per share)	¥ 4.03	¥ 6.35	¥ (0.41)

Income Taxes - Schedule of Composition of Income Tax Expense (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Income Taxes
Current income tax expense	¥ 217,856		¥ 149,152	¥ 0
Deferred income tax benefits	(93,854)		(99,044)	0
Income tax expense	¥ 124,002	$ 17,979	¥ 50,108	¥ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets
Tax losses carried forward	¥ 71,668	¥ 102,239
Write-down of inventories	108,229	10,771
Property, equipment and software	34,905	0
Share-based compensation	30,835	0
Allowance for doubtful accounts	1,416	1,314
Warranty reserve	967	2,704
Subtotal	248,020	117,028
Less: Valuation allowance	(96,610)	(17,984)	¥ (304,790)	¥ (254,039)
Deferred tax assets	¥ 151,410	¥ 99,044

Income Taxes - Schedule of Movement of Valuation Allowance (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Beginning balance	¥ 17,984	¥ 304,790	¥ 254,039
Additions (decreases) during the year	78,626	(286,806)	50,751
Ending balance	¥ 96,610	¥ 17,984	¥ 304,790

Related Party Transaction - Additional Information (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Related Party Transactions
Amounts due from related parties	¥ 0	¥ 0

- Definition

The aggregate amount of receivables to be collected from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth, at the financial statement date. which are usually due within one year (or one business cycle).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
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-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section 45
-Paragraph 1
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=124098289&loc=d3e6676-107765

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(a)(2))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(k)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Related Party Transactions - Schedule of Related Party Transactions (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Transaction amount with related parties
Transaction amount with related parties	¥ 0	¥ 0	¥ 637
Disposal of motor vehicles
Transaction amount with related parties
Transaction amount with related parties	¥ 0	¥ 0	¥ 637

Basic and Diluted Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings Per Share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
Numerator :
Net income (loss)	¥ 486,357	$ 70,514	¥ 2,000,282	¥ (215,094)
Denominator:
Weighted-average ordinary shares outstanding	2,560,106,403	2,560,106,403	2,521,667,815	2,345,703,779
Basic earnings (loss) per Class A and Class B ordinary share (RMB cent per share) \| (per share)	¥ 19.00	$ 2.75	¥ 79.32	¥ (9.17)
Diluted earnings (loss) per share calculation Numerator :
Net income (loss)	¥ 486,357	$ 70,514	¥ 2,000,282	¥ (215,094)
Diluted net earnings/(loss) per share calculation: Denominator
Weighted-average ordinary shares outstanding	2,560,106,403	2,560,106,403	2,521,667,815	2,345,703,779
Add: weighted-average RSUs	17,785,666	17,785,666	54,489,432
Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share	2,577,892,069	2,577,892,069	2,576,157,247	2,345,703,779
Diluted earnings (loss) per Class A and Class B ordinary share (RMB cent per share) \| (per share)	¥ 18.87	$ 2.74	¥ 77.65	¥ (9.17)
Class A and Class B ordinary share
Denominator:
Basic earnings (loss) per Class A and Class B ordinary share (RMB cent per share) \| ¥ / shares	¥ 19.00		¥ 79.32	¥ (9.17)
Diluted net earnings/(loss) per share calculation: Denominator
Weighted-average number of shares used in calculating diluted earnings (loss) per Class A and Class B ordinary share	2,577,892,069	2,577,892,069	2,576,157,247	2,345,703,779
Diluted earnings (loss) per Class A and Class B ordinary share (RMB cent per share) \| ¥ / shares	¥ 18.87		¥ 77.65	¥ (9.17)

Basic and Diluted Earnings (Loss) Per Share - Effects of Outstanding RSUs Excluded From Computation of Diluted Loss Per Share Due to Anti-Dilutive Effect (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Weighted-average RSUs
Basic and diluted earnings (loss) per share
Weighted-average of shares	0	0	10,710,636
Share options
Basic and diluted earnings (loss) per share
Weighted-average of shares	114,000,000	114,000,000	0
Warrants
Basic and diluted earnings (loss) per share
Weighted-average of shares	0	70,833,345	0

Contingencies (Details) ¥ in Thousands	Dec. 31, 2022 CNY (¥)
Contingencies
Contingent liabilities	¥ 0

Condensed Financial Information of the Parent Company - Additional Information (Details)	12 Months Ended
	Dec. 31, 2022
Subsidiaries
Condensed Financial Statements Captions [Line Items]
Restricted net assets as percentage of consolidated and unconsolidated subsidiaries	25.00%

Condensed Financial Information of the Parent Company - Schedule of Condensed Balance Sheets (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Current assets:
Cash	¥ 707,261		¥ 2,684,342
Total current assets	3,870,330	$ 561,144	5,273,461
Total assets	4,774,038	692,169	5,632,257
Current liabilities:
Refund from depository bank - current	2,199		2,013
Non-current liabilities:
Refund from depository bank - non-current	4,163		5,824
Warrant liability			66,347
Total liabilities	538,311	78,046	2,173,567
Shareholders' equity:
Ordinary shares	1		1
Subscriptions receivable from shareholders	(1)		(1)
Treasury stocks	(380,538)	(55,173)	(231,281)
Additional paid-in capital	3,298,531	478,242	2,891,134
Statutory reserves	102,586	14,874	97,420
Accumulated other comprehensive loss	(4,844)	(702)	(101,925)
Retained earnings	1,219,992	176,882	803,342
Total shareholders' equity	4,235,727	614,123	3,458,690	¥ 432,558	¥ 692,795
Total liabilities and shareholders' equity	4,774,038	692,169	5,632,257
Parent Company
Current assets:
Cash	39,573	5,738	30,860
Prepayment for repurchase of ordinary shares	1,251	181
Total current assets	40,824	5,919	30,860
Investments in and receivables from subsidiaries	4,201,822	609,208	3,502,014
Total assets	4,242,646	615,127	3,532,874
Current liabilities:
Refund from depository bank - current	2,199	319	2,013
Other payable	557	81
Non-current liabilities:
Refund from depository bank - non-current	4,163	604	5,824
Warrant liability			66,347
Total liabilities	6,919	1,004	74,184
Shareholders' equity:
Ordinary shares	1		1
Subscriptions receivable from shareholders	(1)		(1)
Treasury stocks	(380,538)	(55,173)	(231,281)
Additional paid-in capital	3,298,531	478,242	2,891,134
Statutory reserves	102,586	14,874	97,420
Accumulated other comprehensive loss	(4,844)	(702)	(101,925)
Retained earnings	1,219,992	176,882	803,342
Total shareholders' equity	4,235,727	614,123	3,458,690
Total liabilities and shareholders' equity	¥ 4,242,646	$ 615,127	¥ 3,532,874

Condensed Financial Information of the Parent Company - Schedule of Condensed Statements of Comprehensive Loss (Details) ¥ in Thousands, $ in Thousands		12 Months Ended
	May 03, 2021 CNY (¥)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Operating expenses:
Cost of revenues		¥ 2,831,107	$ 410,472	¥ 2,135,961	¥ 409,922
Research and development expenses		(546,642)	(79,256)	(332,846)	(140,041)
Sales and marketing expenses		(62,966)	(9,129)	(100,467)	(19,980)
General and administrative expenses		(580,523)	(84,168)	(589,107)	(131,624)
Interest income		15,938	2,311	7,310	3,153
Other income, net		22,156	3,212	6,410	30,958
Change in fair value of warrant liability	¥ 258,782	(24,598)	(3,566)	(190,178)	0
Net income (loss)		486,357	70,514	2,000,282	(215,094)
Total comprehensive income (loss)		583,438	84,589	1,978,137	(239,332)
Foreign currency translation adjustment, tax		0		0	0
Parent Company
Operating expenses:
Research and development expenses					(652)
Sales and marketing expenses					(41)
General and administrative expenses		(20,968)	(3,040)	(6,668)	(2,277)
Loss from operations		(20,968)	(3,040)	(6,668)	(2,970)
Interest income		7	1	1
Other income, net		2,122	308	2,037	2,425
Change in fair value of warrant liability		24,598	3,566	190,178
Share of income (losses) from subsidiaries		416,058	60,323	2,306,195	(214,549)
Net income (loss)		421,817	61,158	2,491,743	(215,094)
Foreign currency translation adjustment, net of nil tax		97,081	14,075	(22,145)	(24,238)
Total comprehensive income (loss)		¥ 518,898	$ 75,233	¥ 2,469,598	¥ (239,332)

Condensed Financial Information of the Parent Company - Schedule of Condensed Statements of Cash Flows (Details) ¥ in Thousands, $ in Thousands		12 Months Ended
	May 03, 2021 CNY (¥)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Cash flows from operating activities
Net cash provided by (used in) operating activities		¥ (1,696,698)	$ (246,000)	¥ 1,438,850	¥ 42,297
Cash flows from investing activities
Net cash provided by (used in) investing activities		(30,323)	(4,396)	5,115	(49,576)
Cash flows from financing activities
Repurchase of warrants		44,282	6,420
Proceeds from issuance of ordinary shares	¥ 770,673
Payment for repurchase of ordinary shares		(234,307)	(33,971)	(103,543)	(23,915)
Proceeds from issuance of ordinary shares and warrants				1,029,455
Net cash provided by (used in) financing activities		(365,506)	(52,991)	905,854	(111,940)
Net increase in cash		(2,092,527)	(303,387)	2,349,819	(119,219)
Effect of exchange rate changes on cash		68,084	9,870	(13,919)	(9,823)
Cash and restricted cash at the beginning of year		2,731,704	396,060	395,804	524,846
Cash and restricted cash at the end of year		707,261	102,543	2,731,704	395,804
Parent Company
Cash flows from operating activities
Receipt of refund from depository bank		0	0	0	13,285
Other cash used in operating activities		(21,439)	(3,108)	(6,462)	(1)
Net cash provided by (used in) operating activities		(21,439)	(3,108)	(6,462)	13,284
Cash flows from investing activities
Decrease (increase) in receivables from subsidiaries		305,529	44,298	(871,194)	28,451
Net cash provided by (used in) investing activities		305,529	44,298	(871,194)	28,451
Cash flows from financing activities
Repurchase of warrants		(44,282)	(6,420)	0	0
Payment for repurchase of ordinary shares		(234,307)	(33,970)	(103,543)	(23,915)
Prepayment under share repurchase agreement		0	0	(573)	(16,146)
Payment for cost of issuance		0	0	(519)	0
Proceeds from issuance of ordinary shares and warrants		0	0	1,029,455	0
Net cash provided by (used in) financing activities		(278,589)	(40,390)	924,820	(40,061)
Net increase in cash		5,501	799	47,164	1,674
Effect of exchange rate changes on cash		3,212	466	(16,451)	(1,541)
Cash and restricted cash at the beginning of year		30,860	4,474	147	14
Cash and restricted cash at the end of year		¥ 39,573	$ 5,739	¥ 30,860	¥ 147