Samsung building crypto mining hardware

Crypto mining requires fast, energy-efficient hardware. ASIC chips are designed to mine cryptocurrencies.

Samsung Electronics has reportedly entered into a contract to manufacture specific-use cryptocurrency mining hardware in order to supply an unnamed Chinese company, growing competition in a monopolized market.

South Korean media outlet The Bell reported that Samsung completed the development of its semiconductor ASIC (Application Specific Integrated Circuit) chips late last year, beginning mass production from January.

“We are in the middle of a foundry business that is being supplied to a virtual money mining company in China,” a Samsung spokesperson told The Bell.

Crypto mining requires fast, energy-efficient hardware. ASIC chips are designed to mine cryptocurrencies.

Taiwan Semiconductor Manufacturing Company (TSMC) has a similar manufacturing partnership with leading Chinese bitcoin ASIC designer Bitmain. In terms of shipments, Bitmain controls 70% of the global market. Digitimes reports that Bitmain’s orders occupy 90% of TSMC’s ASIC foundry capacity during off-peak season.

Samsung has several sizable semiconductor manufacturing plants, capable of fulfilling orders of varying size. By 2021, Samsung will have invested a total of KRW 30 trillion (US$27.9 billion) into its current Pyeongtaek line to expand its semiconductor fabrication capacity in South Korea. Additionally, the company plans to invest KRW 6 trillion (US$5.5 billion) in its Hwaseong site to develop an optimized semiconductor fabrication line.

Samsung’s new partnership could substantially drive up competition in Chinese and global markets.

The exploding popularity of digital currencies such as bitcoin, Ethereum, Ripple, Stellar and NEO has resulted in volatile price movements in recent months. However, it’s not only the virtual assets that have skyrocketed in value. Graphics cards have also seen substantial price increases as crypto mining enthusiasm has led to retail stock shortages. Polygon reports that AMD and Nvidia’s mid-range to high-end graphics cards are available only in limited supply. Miners have been buying cards in bulk in hopes of utilizing the hardware to strike it rich.

For example, Nvidia’s GeForce GTX 1070 generally retails at $380. However, last year it was priced at $450 and is currently selling for more than $700. Despite this, Nvidia remains adamant that gamers are their priority.

“Gamers come first,” Nvidia spokesperson Boris Böhles told German tech publication Computer Base.

“To ensure GeForce gamers continue to have good GeForce graphics card availability in the current situation, we recommend that our trading partners make the appropriate arrangements to meet gamers’ needs as usual.”

Crypto mining serves as key component in unearthing new value and keeping the bitcoin blockchain secure.

The city of Virginia Beach has pledged $500,000 to help install a bitcoin mine, expected to generate local jobs.

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