Crypto mining demand to boost Q2 profit at Samsung’s chip division
Growth in demand for computer chips powerful enough to drive the rise in activities such as cryptocurrency mining, cloud computing and gaming PCs is expected to boost second-quarter profits at Samsung Electronics’ chip business.
Business analysts polled by Reuters expect operating profit in Samsung’s chip division to grow by about 50% to a record Won12.5tn ($11.2bn) for the April-June quarter, compared with the same period a year ago.
Total operating profit, which includes earnings from flagging sales of Samsung phones, is seen at Won14.9tn – up 5.7% from a year ago, but down from the record Won15.6tn set in the first quarter of 2018.
New technologies boost
During the first quarter Robert Yi, executive VP of investor relations explained the growing contributions from new technologies.
He said: “In the semiconductor business, the earning increases significantly year over year thanks to favourable market conditions driven by strong demands in server and graphic card memories as well as earning improvement in both the System LSI and Foundry businesses led by an increasing demand of chips used in flagship smartphones and cryptocurrency mining.”
Samsung first acknowledged its Foundry business was producing chips for the sole use of cryptocurrency mining in February, although it provided no details on who its customers were.
Nevertheless, in April, crypto mining distributor MyRig revealed that Samsung supplied customised chips called application-specific integrated circuits (ASIC) to bitcoin mining equipment made by Halong Mining.
At its investor forum in Singapore last month, Foundry marketing director Lee Sang-hyeon said the division would grow by 5% from last year, reaching $63bn in terms of sales.
He added: “Last year, our foundry business sales hit $9.8bn. The number of customers this year has approximately doubled. We are expecting an even bigger jump in sales figures.”