Samsung Enters The Cryptocurrency Mining Space, Announces First-Ever Stock Split
Cryptocurrency mining has lifted results for chipmakers NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD) in recent quarters — although the benefit from this newest market opportunity may not last.
Too Good To Pass Up
The Korean chipmaker confirmed it is manufacturing ASIC chips used to mine cryptocurrencies such as bitcoin and ether.
ASIC chips are used for single computational task, rather than for multipurpose computing, according to The Verge.
The TechCrunch report quoted a Samsung spokesperson as saying the company's foundry business is making the chips, but Samsung cannot disclose further customer details.
Samsung manufactures high-performance chips for GPUs, used for graphics applications on computers.
The TechCrunch report suggested that Samsung's foray into the ASIC space places it in rivalry with Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), companies that work with Bitmain and Canaan Creative, both of which make mining hardware.
It remains to be seen if Samsung's foray is a giant leap of faith, and whether it's on a scale that could make a significant impact on its top-line.
First-Ever Stock Split
Riding on the back of a chip boom, Samsung announced its first stock split on Wednesday. The 50-1 split is necessitated by a higher valuation that's hindernig retail investors, according to the company.
The move is in line with a three-year shareholder return policy for 2018-2020 the company announced in October, and which includes yearly dividends of 9.6 trillion won.
The stock split is in addition to the 5.8-trillion won in dividends paid out in 2017 and 9.2-trillion-won in share repurchases in 2017.
Samsung reported a record annual operating profit of 53.7 trillion won in 2017, capitalizing on the demand for chips in multiple applications such as smartphones, data centers and blockchain ledgers.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.