Computer chips reason for Samsung's record profit

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Korean news outlet The Bell broke the news Tuesday, and Samsung confirmed to TechCrunch Wednesday that it's indeed making crypto-mining chips.

Samsung is jumping into the craze for cryptocurrencies with the launch of a new hardware offering.

Samsung is jumping the bitcoin ASIC mining rig bandwagon with reports indicating that the consumer electronics giant now intends to mass produce ASIC miners to capture the burgeoning cryptocurrency mining market.

This year, processors, which are designed for bitcoin mining, were put on the market. This has led to miners moving on from using standard integrated graphics cards to GPUs designed for gaming, and now to specially built ASICs. Bitcoin is now trading near $10,000, almost 10 times its price this time a year ago.

Mining cryptocurrencies require a speedy, energy-efficient hardware which is the reason why Samsung has commissioned a special ASIC chip for mining operations.

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Also on Wednesday, Samsung Electronics' board of directors made a decision to lower the face value of its stocks from 5,000 won to 100 won, a move that would dramatically increase the number of common stocks to more than 6.41 billion from the current 128.3 million. Samsung said it expects its Foundry arm to be "number two" in the business. Currently, China's Bitmain and Canaan Creative dominate this space, with both companies partnering with Taiwanese chip maker TSMC.

The size of Samsung's semiconductor plant could give the firm an automatic advantage, according to analysts. In the case of bitcoin, the currency is created by solving mathematical problems, with these calculations also maintaining the integrity of bitcoin transactions. At the time of writing, Bitcoin trades near $9,300.

Samsung has confirmed the news that it have overtook Intel making it the largest chipmaker a year ago.

It is not sure exactly whether Samsung is going to fit into the cryptocurrency chip manufacturing business, but it is putting itself in direct competition with some big players in chip manufacturing.

The chip business was Samsung's top earner last year, posting a record operating profit of 35.2 trillion won and more than doubling its profit on-year in the fourth quarter alone.