Samsung's Q1 2018 profit hits record high, boosted by cryptocurrency mining

Samsung Electronics recently revealed that its operating profit in the first quarter of 2018 increased 58% year-on-year, partly due to strong demand for cryptocurrency mining chips.

Robert M. Yi, executive vice president of investor relations at Samsung, said in an earnings call Thursday that earnings growth in the semiconductor business was a big reason the company posted a record quarterly profit of 15.6 trillion won ($14 billion).

Yi explained this astonishing profit growth:

“Our semiconductor business revenue grew significantly year-over-year, driven by favorable market conditions driven by strong demand for server and graphics memory, while increased demand for chips used in smartphones and cryptocurrency mining also led to higher profits in our System LSI and Foundry businesses.”

While Samsung does not disclose exact figures for its mining chip business, these positive numbers should be related to the company’s announcement in February that it is producing 8nm and 11nm processors to meet the growing market demand in the cryptocurrency mining industry.

Samsung’s expansion into cryptocurrency mining has also spurred competition in this area, with Taiwanese chipmaker TSMC also reporting similar growth in demand for mining chips in its recent earnings call.

Next, Samsung predicts that demand for its mining processors will continue to grow in the second quarter, while earnings for its LSI and Foundry businesses are likely to decline due to reduced demand for smartphone components.