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Samsung Develops Chips for Crypto Mining
As per South Korean news outlet ‘The Bell’, electronics giant Samsung has started manufacturing ASIC (Application Specific Integrated Circuits) chips designed for crypto mining in partnership with an unidentified Chinese mining company. This is a new hardware specifically designed with hashing algorithm like SHA256, Scrypt, etc for cryptocurrency mining. Samsung will now be supplying the 10 nanometer 16GB GDDR6 DRAM chips to the Chinese partner, who will distribute the hardware.
This move is likely help Samsung to scale up its operations and enter a red market but revenue wise it is too early to predict. Similar was the reaction from Samsung representative who said,
“We are in the middle of a foundry business that is being supplied to a virtual mining company in China. Since Samsung has just begun its cryptocurrency mining venture, it is unsure of revenues it can generate from it.”
Last year in October in San Francisco, Samsung used 40 old S5 Galaxy phones to create a Bitcoin mining rig as part of an “upcycling” initiative intended to persuade customers to find new use cases for their old phones. Rumors were floating from that time that the rig was just a façade, Samsung was secretly developing ASIC chips. Later, the company had signed an agreement with Russian based Bitcoin mining hardware firm Baikal that would see it supply ASIC chips to Baikal.
In the long term, Samsung plans to expand its mining equipment venture from China to other regions like South Korea and Japan which has a stronger demand for cryptocurrencies. This will give a big impetus to Samsung in terms of revenue. Similar thoughts were shared by ‘Hwang Min-Seong’ an analyst in Samsung securities, who stated that,
“Samsung will be able to increase its revenues through ASIC chip manufacturing. But until, the company expands its ventures internationally, it will be difficult for Samsung’s ASIC chip manufacturing division to have a major impact on the revenues of Samsung electronics.” In the upcoming months, Samsung plans to manufacture GPU miners for miners targeting small cryptocurrencies.
As far as Samsung is concerned, this is continuation as well as diversification for Samsung which has 60% of its revenue as on 2017 from its existing chips. This move is likely to step up the competition because currently the dominant players like Canaan Creative and Bitmain, source their chips from Taiwan’s TSMC. Also, it’s worthwhile to note that Samsung’s well established large semiconductor plant will give it an added advantage. Earlier, Eastman Kodak announced that it had licensed its name as mining hardware manufacturer to produce kodak-branded miners. However, Samsung will have the first mover advantage because it has already started manufacturing the chips.