Samsung Electronics (KRX: 005930) has posted record profit in the first quarter of the year, in part thanks to strong sales of cryptocurrency mining chips, industry website Coindesk has reported.
The South Korean consumer electronics giant reported a 58% year-on-year increase in Q1 operating profit to a record of 15.6 trillion Korean won, or $14 billion. Samsung’s executive vice president of investor relations Robert M. Yi said during an earnings call on Tuesday that the company’s semiconductor unit played a large role in achieving the record result.
“In the semiconductor business, the earning increases significantly year over year thanks to favorable 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," Yi explained, as quoted by Coindesk.
Samsung did not reveal specific figures regarding the mining chip sales. However, their impact on the semiconductor business as a whole has likely been significant, given that Samsung had never offered such chips prior to the first quarter.
On February 1, Samsung announced that it was manufacturing specialised cryptocurrency mining chips, confirming earlier reports in the media that the company had started production in January. The company now expects that this side of the business will continue to be an important driver of the performance of its semiconductor unit. Yesterday, the company forecast that demand for mining chips will continue to grow in the current quarter, while the earnings of its LSI and Foundry businesses may decrease due to slowing demand for smartphone components.
Samsung is not the only chipmaker, whose performance has benefitted from crypto mining processors. Earlier this month, Taiwanese semiconductor manufacturer TSMC reported similar increase in demand for this type of equipment.