Samsung hasrevealed for the first time that it is specifically making chips to harvest crypto-currency coins.
The South Korean electronics giant made the admission in its latest results, where it posted strong growth in both its profits and revenues as it was helped by strong demand for DRAM and NAND flash chips.
Indeed, its fiscal performance seems a long way from 2016 when Samsung was rocked by the fallout from its Galaxy Note 7 debacle, and political issues that saw the arrest of vice chairman and heir apparent Jay Y. Lee over an influence-peddling scandal in South Korea.
For the fourth quarter Samsung posted a net profit up at KRW 12.26 trillion (£8bn). Sales for the quarter also rose to KRW 65.98 trillion (£43bn).
For the full year profit rose to KRW 42.19 trillion (£27.6bn) from KRW 22.73 trillion (£14.9bn). Annual sales rose 19 percent to KRW 239.6 trillion (£157bn) from KRW 201.87 trillion (£132bn) in 2016.
Semiconductors were the main driver of growth, as Samsung said that its memory business that manufactures DRAM and NAND, as orders for high-performance memory products for servers and mobile storage, witnessed strong demand.
And the firm said that it expected DRAM and NAND flash chip shipments to increase by about 20 percent and 40 percent in 2018.
Samsung overtook Intel last year to become the world’s biggest chipmaker.
Looking ahead, Samsung also predicted strong demand for its forthcoming Galaxy S9 smartphone, to be revealed on 25 February. But it admitted that its IT & Mobile Communications Division (IM), earnings had declined due to a hike in marketing costs.
Indeed, Samsung said that total smartphone shipments decreased due to the lineup optimisation of low-end models, while shipments of flagship products, such as the Galaxy Note 8, increased from the previous quarter.
And whilst Samsung said that its display panel business, which makes OLED and LCD screens, saw increased shipments of OLED panels for premium smartphones, it LCD panels profitability took a hit due to weak seasonality, which dampened sales and average selling prices.
Samsung has provided little information about its new crypto-currency business, although it did make the following statement in its earning release.
“In the first quarter, earnings are expected to rise on the ramp-up of 2nd generation 10nm process products for this year’s flagship smartphones and growing demand for cryptocurrency mining chips,” it said.
“Samsung’s foundry business is currently engaged in the manufacturing of crypto-currency mining chips,” Samsung told the BBC.
“However we are unable to disclose further details regarding our customers.”
South Korean media reports say that owners of the computers involved in bitcoin mining are rewarded with new digital tokens or “coins”, and that the processors involved are Asic (application-specific integrated circuit) chips.
These are chips that are custom-designed to carry out a single task (i.e mining) and are not used for any other computing requirements.
Until now, Taiwan’s TSMC had been the only other major processor-manufacturer engaged in the activity.