Samsung Begins Manufacturing ASIC Chips for Mining Cryptocurrency

Samsung Begins Manufacturing ASIC Chips for Mining Cryptocurrency

Samsung is currently the top chipmaker in the world, and it’s quietly expanding into a new market: cryptocurrency mining. Samsung isn’t mining coins itself, but it is using its massive manufacturing capacity to produce so-called “application specific integrated circuits,” or ASIC chips, for use in mining rigs. These chips are designed just to mine coins, making them vastly more efficient than a stack of GPUs.

Cryptocurrencies have different features, values, and management features, but almost all of them can be mined. To mine coins, your machine has to complete complex mathematical calculations as “proof of work.” This computing power goes toward processing transactions on the crypto’s network, and in return you are rewarded with a small amount of the currency. However, the calculations get more difficult over time, and that means you need more powerful and efficient ways to mine it.

Bitcoin has long since passed the point you can profitably mine it at home — even a giant rig of GPUs won’t have enough power to compensate for the electricity you use. This happens to every cryptocurrency eventually, but ASIC chips can keep a mining operation profitable. Thus far, most ASIC chips have been designed by Chinese firms Bitmain and Canaan Creative, both of which work with Taiwanese fabrication company TSMC. The entry of Samsung, with its impressive manufacturing capacity into this space, could upend the market.

An ASIC Bitcoin miner.
An ASIC Bitcoin miner.

Samsung has confirmed it’s working on cryptocurrency mining chips, but it refuses to discuss its specific partners. Previous reports claim it’s a Chinese firm, which would make sense. The low cost of electricity there has made it a hub of cryptocurrency mining. The unnamed partner would need to buy a substantial number of chips to affect Samsung’s bottom line. The company brought in $69 billion in chip sales last year, most of which were used in smartphones. That was the largest chunk of its revenue; even more than smartphone sales.

Having more ASIC hardware on the market certainly won’t hurt, though. The price of consumer GPUs is through the roof right now because miners are buying them up to accumulate newer cryptocurrencies in hopes of striking it rich when they take off. Although, it’s unknown whether Samsung’s mystery partner plans to sell ASIC hardware or just use it in a private mining operation. Most consumer ASIC devices have been failures, but recent increases in crypto value might turn that trend around. Maybe you’ll be able to get a GPU for retail price someday.

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