Samsung Enters Crypto Mining Market, “Mass Producing” ASIC Chips For China

Samsung announced a deal on Monday, Jan. 29 to manufacture ASIC mining hardware with Taiwanese manufacturer TSMC. “Mass production” of the ASIC chip has already begun in January, according to Korean news outlet The Bell.

An ASIC chip, which stands for Application-Specific Integrated Circuit, is a specialized piece of hardware designed to only mine cryptocurrencies based on a specific hashing algorithm, such as SHA256 or Scrypt (which Bitcoin and Litecoin run on, respectively). It makes up part of a crypto mining device.

TSMC supplies the ASIC chips needed for cryptocurrency mining to Bitmain, a China-based Bitcoin mining company. Bitmain also manufactures its own hardware, having released two ASIC-style products in September 2017 to relatively negative fanfare as well as an unexpected launch of a SiaCoin miner on Jan. 19.

In regards to the profitability of Samsung entering the crypto mining market, Hwang Min-seong, an analyst at Samsung Securities, told 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 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.”

South Korea-based Samsung’s deal with TSMC comes after a turbulent month in the crypto markets in Asia, with exchanges banned in China and accusations of insider trading and confusion over regulation in South Korea leading to losses across the board.