Samsung Enters Bitcoin Mining Industry with New Mining Hardware

South Korea’s largest conglomerate – Samsung – has finally entered the cryptocurrency business. It has begun the mass production of cryptocurrency mining hardware, especially ASIC chips.

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As reported by Korean daily The Bell, Samsung has entered into a contract with an unnamed Chinese cryptocurrency mining equipment distributor, and will initially supply all its chips to this sole distributor.

Samsung, which is one of the largest chip manufacturers in the world, has already finished the development stage and reportedly started manufacturing on January 29th. A spokesperson from Samsung told local media that the firm will be responsible for operating a foundry.

The spokesperson said: “Samsung is operating a foundry that supplies a Chinese cryptocurrency mining firm with mining equipment and ASIC chips. Since Samsung has just begun its cryptocurrency mining venture, it is unsure of the revenues it can generate from it.”

ASIC chips are in huge demand in China, home of the Bitcoin mining industry. These chips are specially designed for Bitcoin mining. In the long run, Samsung is also planning to manufacture GPUs which are efficient in mining small cryptocurrencies.

For now, Samsung will focus on a single market, but it has plans to expand its mining equipment business to the markets of Japan and South Korea, where the demand is also high.

With players like Samsung entering this business, existing players like Canaan Creative and Bitmain will be getting some tough competition. Taiwanese semiconductor giant TSMC supplies chips to both these companies.

Today, Samsung released its quarterly earnings report, according to which the firm’s chip business is already flourishing. Its October to December earnings jumped 74 percent to KRW 12 trillion ($11.2 billion), compared with KRW 6.9 trillion ($6.4 billion) a year earlier. Samsung’s flagship chip manufacturing division generated KRW 10.9 trillion ($10.1 billion) in operating income during the quarter.

The Bell also quoted Hwang Min-seong, an analyst at Samsung Securities: “Samsung Electronics could increase its revenues through ASIC chip manufacturing but because the foundry only accounts for a small portion of the company’s semi-conductor manufacturing plant, it is difficult to predict that the firm’s mining venture will have a significant impact on the company’s revenues.”