Samsung Electronics has revealed it is making chips designed specifically to harvest crypto-currency coins.

The firm made the disclosure in its latest earnings report, where it said the activity should boost its profits.

The report also confirmed that the South Korean company overtook Intel to become the biggest chipmaker last year.

And it forecast strong demand for its forthcoming Galaxy S9 smartphone, which is due to be revealed on 25 February.

Samsung Electronic's fourth quarter net profit totalled 12.3tn won ($11.5bn; £8.1bn), which was roughly in line with analysts' expectations.

But its shares jumped nearly 9% after the company revealed that it was splitting its stock 50-to-1, which should encourage trade in the asset.

Asic's advantage
For now, Samsung is providing little detail about its new crypto-currency business.

"Samsung's foundry business is currently engaged in the manufacturing of crypto-currency mining chips," it said in a statement given to the BBC.

"However we are unable to disclose further details regarding our customers."

Mining, in this context, refers to solving complex mathematical problems as a means to verify crypto-currency transactions - a task for which the owners of the computers involved are rewarded with new digital tokens or "coins".

The Bell, a Korean-language newspaper, has reported that the processors involved are Asic (application-specific integrated circuit) chips.

These are chips that are custom-designed to carry out a single task - in this case "mining" Bitcoin or another specific crypto-currency - but not general computing operations.

Until 2013, Asic chips were more commonly associated with the TV industry.

But that year, a New York-based entrepreneur began selling processors custom-designed for Bitcoin mining, which promised better performance and lower energy use than GPU (graphics processing unit) chips, which are still more commonly associated with the task.

In recent months, a shortage of high-end GPU cards has pushed up their prices, making the rival Asic technology even more appealing.

According to The Bell, Samsung completed development of its own Bitcoin-related Asic chip last year and began mass production earlier this month.

Until now, Taiwan's TSMC was the only other major processor-manufacturer engaged in the activity.

One expert said Samsung's move represented a bet that Bitcoin's rise in value does not represent a bubble that is about to burst.

"We don't know how low Samsung can sell its chip for and still be profitable," said Garrick Hileman, a crypto-currency researcher from the University of Cambridge.

"But if Bitcoin's price were to collapse and enter a bear market like in 2014 to 2015, one would wonder if Samsung would stay with this line of business through such a turn."

Taking top spot
Samsung's latest venture coincided with news that its semiconductors division logged 74.3tn won ($69.6bn; £49.1bn) of sales last year.

That compares with a figure of $62.8bn reported by Intel last week.

It marks the first time the US firm has not occupied the top spot since 1992, according to the Bloomberg news agency.

Much of Samsung's success is down to the popularity of its memory chips - it highlighted demand from the computer server and mobile device storage markets in particular.

Intel is hoping to increase its own market share in the sector by offering a new proprietary memory technology called 3D Xpoint, which it began selling last year.

However, it risks being distracted by the need to redesign its processor chips after a flaw with their current architecture was recently revealed.

Published Date:2018-02-01