Samsung Electronics has reported 58% year-on-year growth in its operating profits for Q1 2018 – an increase driven in part by strong demand for cryptocurrency mining chips.
Robert M. Yi, Executive Vice President of investor relations at Samsung, said on Thursday that the profitability increase seen in the firm’s semiconductor business has played a significant role in setting a new quarterly operating profit record of 15.6 trillion Korean won ($14 billion).
Yi explained the phenomenon to investors:
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.
The Increasing Demand for Mining Chips
Although Samsung did not disclose precise figures for the mining chip side of the business, the positive figures follow a February confirmation from the tech giant that it was now producing 8nm and 11nm processors to meet growing market demand from the cryptocurrency mining industry.
The mining industry has been growing at a faster rate and operators in the market are demanding high capacity chips for fast operations. Being a tech savvy company, Samsung has enhanced production of such high capacity processors to serve the ever-growing market.
According to CoinDesk Samsung and a few other memory chip makers are benefiting from hefty investments by global Internet companies to expand data centers and higher demand for chips that can handle more complex programs used in crypto mining.
Samsung is not the only tech-based company that is enjoying the benefits of an expanded crypto mining industry. Taiwanese chip maker TSMC has also reported similar growth in mining chip demand during its own recent earnings call.
The company expects the brisk earnings streak from its chip sector will continue through the second quarter as expansion of global data centers in the US and China will keep demand for chips strong.
The company forecast that the demand for mining processors will continue to expand in Q2, while the earnings of its LSI and Foundry businesses may decrease due to slowing demand for smartphone components.
The good performance by the tech giant is welcome news to many people around the world, as the company has been in the news for negative aspects in the recent past; from corruption cases to certain products such as its smartphones being substandard.
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Do you think other tech-based companies should venture into producing crypto mining chips to enhance their profits? Is this the next frontier for the tech companies? Let us know your thoughts in the comments section.