Samsung Ventures Into Chip Production For Cryptocurrency Mining
South Korean tech juggernaut Samsung has announced that it has started manufacturing chips that are designed and optimized for cryptocurrency mining. The company whose major product line has been in the semiconductor business is looking to expand its portfolio to include ASIC chips that are used to mine cryptocurrencies such as bitcoin and Ether.
ASIC chips refer to processors that feature Application-Specific Integrated Circuit. They have a unique and specific hashing algorithm that makes them ideal for cryptocurrency mining only. The company revealed on Monday that it struck a manufacturing deal for the chips with Taiwan-based manufacturer TSMC. Sources have also revealed that the production of the new mining chips kicked off in January.
The ASIC chips are supplied to a bitcoin mining company called Bitmain which is based in China. The Chips will, however, be manufactured by Samsung's Foundry business which is a division of the company’s semiconductor business.
Samsung Securities analyst Hwang Min-seongsaid this during an interview with South Korea’s news outlet, The Bell: "Samsung Electronics could increase its revenues through ASIC chip manufacturing but because the foundry only accounts for a small portion of the company's semiconductor manufacturing plant, it is difficult to predict that the firm's mining venture will have a significant impact on the company's revenues."
Samsung revealed during its fourth-quarter earnings release on Wednesday that it expects to benefit from the increased demand for cryptocurrencies. A spokesperson from Samsung told The Bell that the tech giant has been making noteworthy progress through its Foundry business. The spokesperson also pointed out that the business is still in its early stages and so its profit contribution is still small. However, Samsung stated during the earnings call that it expects the Foundry division to be the second biggest contract chip manufacturer. TSMC currently holds the top spot.
Cryptocurrency mining has been known to be a very demanding process because it requires powerful hardware. The past year has particularly been a great year for Nvidia and AMD because the growth of the cryptocurrency mining industry has led to heavy demand for their GPU offerings. Samsung wants to take advantage of the booming demand for mining hardware by creating chips that are optimized for cryptocurrency mining.
The South Korean tech giant managed to sell chips worth $69 billion in 2017 and the huge sales figure is courtesy of the smartphone industry. The company expects the chipsets designed for mining to add significantly to its annual chip sales.