Another day, another line of business that semiconductor giant Intel (INTC -0.94%) has decided to exit. Non-core businesses are being pushed aside as Intel works to regain its dominance in its core PC and server CPU markets, break into the GPU market, and build a world-class foundry business, all while slashing costs.

The latest victim of Intel's slimming down is its line of Blockscale application-specific integrated circuits (ASICs) aimed at the bitcoin mining market. While bitcoin can be mined with GPUs, an application-specific integrated circuit like Blockscale is designed at the hardware level for the task at hand. Power efficiency is everything when mining bitcoin. When Intel began shipping Blockscale in the third quarter of 2022, it snagged Argo Blockchain, Block, Hive Blockchain Technologies, and GRIID Infrastructure as early customers.

Weird timing

The right time to launch a bitcoin mining chip would have been anytime between late 2020 and early 2022. The pandemic-era cryptocurrency bubble pushed the price of one bitcoin to $60,000 in an epic rally. Bitcoin mining became highly profitable, and there would have been plenty of demand for Intel's chips.

The wrong time to launch a bitcoin mining chip was exactly when Intel brought Blockscale to the market in late 2022. Cryptocurrency prices had already crashed, with the price of one bitcoin tumbling below $20,000 at one point. Frauds, like the Luna crypto network and later FTX, began to unravel, putting a chill on cryptocurrency interest.

Intel is putting an end-of-life stamp on its initial family of Blockscale chips. The company will support existing customers, but it will stop taking orders by Oct. 20 and ship its final chip by April 20 next year. As of now, there are no plans to launch a successor.

One of many

Under CEO Pat Gelsinger, Intel is taking a hard look at all the disparate businesses it operates. The company has two core competencies: designing CPUs for PCs and servers, and manufacturing chips using cutting-edge processes. Anything outside of those areas has the potential to find its way to the chopping block as Intel grapples with the toughest demand environment in years.

In addition to the Blockscale bitcoin mining chip business, Intel has axed a variety of other businesses over the past few years.

  • In 2019, Intel fully exited the smartphone market by selling its smartphone modem business to Apple. In the face of intense competition, Intel just couldn't make it work.
  • Intel announced in late 2020 that it had reached a deal to unload its NAND memory chip manufacturing business and its SSD business to SK Hynix. The deal is complex and will play out over years, but Intel is now largely out of the of commodity memory chip business.
  • Intel has also abandoned its other memory chip venture, Optane. Intel's Optane chips were built with 3D XPoint memory, which was non-volatile like NAND but far faster. While it found some applications in the data center, the technology never really found its footing.
  • Intel acquired Barefoot Networks, a designer of Ethernet switch chips, in 2019. The idea was to expand Intel's presence in the data center, capturing more spending from customers. That plan didn't pan out. Earlier this year, Intel ended development of all switch chips.
  • Earlier this month, Intel confirmed that it will no longer build and sell server systems. The company still leads the market for server CPUs, but it had no real competitive advantage when it came to assembling actual systems. Intel's server business will be sold to Taiwanese electronics manufacturer MiTAC.

Intel plans to slash annual costs by as much as $10 billion by the end of 2025, and part of that plan involves getting out of non-core businesses. While a reinflating of the bitcoin bubble could prompt Intel to reexamine its exit from the bitcoin mining chip market, the company has recognized that cryptocurrency mining is probably not as lucrative as it once thought.