These chips are known as ASICs, or application-specific integrated circuits. ASICs are processors that have been specially designed for a single computational task, as opposed to the multi-purpose processors we use in computers and phones. As the valuation of cryptocurrencies has shot up, so has the demand for these sorts of chips. In the case of bitcoin, the currency is created by solving mathematical problems, with these calculations also maintaining the integrity of bitcoin transactions. As more bitcoins are mined, these math problems become increasingly difficult. This has led to miners moving on from using normal integrated graphics cards, to GPUs designed for gaming, and now to specially built ASICs.
It’s not clear exactly what sort of products Samsung will be making, but according to reports from Korean media, it’ll be working with Taiwanese firm TSMC. The company currently supplies chips for a number of firms set up solely to mine cryptocurrencies, including the China-based Bitmain. Meeting the demand for these chips has added around $350 million to $400 million to its quarterly revenue, says TSMC. That’s nothing to be sniffed at, but it’s a small sum compared to the $69 billion revenue generated annually by Samsung’s chip business. Mining cryptocurrencies is buzzy, but that doesn’t mean it’ll be extremely profitable for those selling the silicon shovels.
Samsung made a special chip for mining cryptocurrency
Rather than repurpose a GPU to do the dirty work, Samsung made an Application Specific Integrated Circuit (ASIC), which is a specialized processor that is more efficient at mining than, say, an NVIDIA 1080 card. The company has entered into a distribution agreement with an as-of-now anonymous Chinese partner for distribution. As TechCrunch notes, this is significant for at least one reason: This gives the Korean company a way into the Chinese ASIC market, where local firms dominate. It's too early to tell what sort of impact (if any) this could have on Samsung's bottom line, or how it could affect cryptocurrency and China's local players.
Chuck Reynolds
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