Samsung is making chips designed to mine cryptocurrencies

Samsung Electronics is producing chips for a Chinese company to mine cryptocurrencies and it expects this to boost earnings this year.

The South Korean technology giant has a division within its semiconductor business called Foundry. It builds chipsets for other companies.

Samsung said in its fourth quarter earnings Wednesday that it will "benefit from cryptocurrrency demand increase" in the semiconductor arm. It follows a report in local South Korean media on Tuesday, in a which a spokesperson confirmed it was making hardware designed for cryptocurrency mining.

"We are making progress with our foundry business that supplies to a virtual money mining company in China," a Samsung spokesperson told The Bell.

"It is in the beginning stage so the proportion of profit from the overall foundry business is small yet."

Mining is a process that requires super computers to solve complex mathematical problems in order to validate a transaction on the bitcoin network. It requires specialist hardware and chipsets. It is this that Samsung can make.

The firm's semiconductor division has propelled profits and helped boost shares.

Samsung said on an earnings call Wednesday that it expects its Foundry arm to be "number two" in the business. Taiwan's TSMC is currently number one in contract manufacturing of chips.