Strong demand for crypto mining chips boosts Samsung Q1 profit

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South Korean electronics giant Samsung has gone big in the cryptocurrency market focusing on mining, where it appeared rich pickings were to be had.

On Thursday, the electronics company reported an impressive first quarter 2018 performance with revenues and profits in record territory for the fourth quarter in a row. The catalyst, according to Samsung, was the huge demand for semiconductors used in cryptocurrency mining, which offset the continued weak demand in the smartphone market.

The figures made for an outstanding reading. Samsung posted operating profit of KRW15.64 trillion ($14.45 billion) with an excess of KRW60.56 trillion ($60 billion) in revenue. The latter was chiefly fueled by the rise in Samsung’s memory chip sales, which the company said continued to grow at a rapid pace.

Speaking during an earnings call, Robert M Yi, executive vice president for investor relations at Samsung, explained that the boom in turnover and profits was chiefly due to extremely favourable market conditions in the industry.

“In the semiconductor business, earnings increased significantly year-over-year thanks to favorable memory market conditions driven by a strong demand for server and graphic memory as well as earnings improvements in both System LSI and foundry businesses led by increasing demand for chips used in flagship smartphones and cryptocurrency mining,” he said.

However, Samsung continues to face increasing competition from other manufacturers of semiconductors as new players enter the cryptocurrency mining industry. Additionally, continuing weak demand for smart phones continues to negatively affect the company and the next quarter might not be as positive where results are concerned.

Meanwhile, AMD also reported strong performance in the first quarter of 2018, thanks to the continued demand for cryptocurrency mining.

First-quarter revenue for the chipmaker came in at $1.65 billion, while operating income and net income amounted to $120 million and $81 million, respectively. The first quarter’s “outstanding start to 2018” marked a 40% year-over-year revenue growth for AMD, according to President and CEO Dr. Lisa Su.