Samsung Pay May Integrate Crypto on Millions of Smartphones, Starting With the Galaxy S10 – What’s the Realistic Impact?

According to a report from The Korea Herald, a mainstream media publication based in South Korea, Samsung Pay could integrate crypto into the Samsung Galaxy S10.

Earlier this month, CCN reported that the potential development of a crypto wallet by Samsung and the Galaxy S10 development team was leaked by an insider.

New reports suggest that Samsung will bring crypto into its ecosystem through Samsung Pay, its flagship digital payments platform.

What Effect Could Samsung Pay Have on Crypto?

In late 2018, MK reported that Samsung Pay has more than 10 million users in South Korea alone that utilize the application to settle day-to-day payments.

With Kakao’s KakaoPay, Samsung Pay dominates the country’s digital payment sector, partly due to its $200 million acquisition of LoopPay, which allowed Samsung Pay to use its magnetic secure transmission (MST) technology, an alternative to NFC that is used by Apple Pay and KakaoPay.

Speaking to The Korea Herald, an industry official said that the integration of a crypto wallet by Samsung and Samsung Pay could lead to the mainstream adoption of cryptocurrencies in the local market.

The official said:

“The arrival of the new Samsung phones could start popularization of the cryptocurrency wallet system in Korea.”

Since mid-2018, Samsung, South Korea’s largest conglomerate, has shown interest in the utilization of cryptocurrencies in commerce.

A report released by Samsung Insights previously emphasized that mobile devices are typically more secure in storing cryptocurrencies due to the presence of a Trusted Execution Environment (TEE).

On PCs or desktops, private keys to wallet addresses are stored in the same memory as the operating system. As such, in an event of a hacking attack, a hacker could easily gain access to the data.

Joel Snyder at Samsung Insights explained:

“If a wallet stores the private keys on a normal persistent store (such as a hard disk or SSD), whether on a standard Windows PC or in a smartphone, a bit of malware can easily get access to them. If those private keys are in the TEE and only accessible via a trustlet, there’s no possible way the malware can extract the keys directly.”

Historically, Samsung has tended to focus on markets which it can reasonably penetrate into with minimum resources and capital using their existing infrastructure.

“Cryptocurrency users may not pay much attention to the mechanics of how their coins are stored, but that can be a dangerous attitude to have. Picking a dependable cryptocurrency wallet is an important part of using cryptocurrencies safely,” Snyder said.

The integration of a cryptocurrency wallet into the Galaxy S10 could demonstrate the security of its TEE and software like Knox to a new group of users.

If Samsung Pay is involved in the process and cryptocurrencies are integrated into the fintech application, it also provides an edge over its competitors in Asia such as KakaoPay and AliPay.

A Win-Win Integration

Although Samsung has not released an official statement regarding the rumors of a potential crypto wallet launch, every company and market involved in the development benefits from it and the deal makes sense for the conglomerate.

Samsung will appeal to millennial users who perceive cryptocurrencies as an efficient and alternative means of payment method over traditional systems, and cryptocurrency users will benefit from a native app that prioritizes security.

KakaoPay has been working with UPbit, a cryptocurrency exchange owned by Dunamu, a company invested by Kakao, to provide support to the trading platform.

With two of the largest digital payment applications in South Korea experimenting with cryptocurrencies in different ways, in the long run, industry experts foresee the infrastructure supporting cryptocurrencies to improve significantly.

Author: Joseph Young 
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Chipmakers’ Rout Widens After TSMC Ignites Smartphone Fears

  • The industry bellwether’s disappointing outlook spurs selloff
  • Investors fear the smartphone market’s best days are over

Asian technology stocks joined their peers in a global swoon after a disappointing sales outlook from Taiwan Semiconductor Manufacturing Co., Apple Inc.’s main chip supplier, rekindled concerns that the smartphone industry’s best days may be behind it.

 TSMC fell 6 percent — its biggest loss since July 2013 — after predicting current-quarter sales about a billion dollars less than analysts had projected. It also reduced its forecast for semiconductor market growth, to 5 percent from a previous 5 to 7 percent. That followed a report by the International Monetary Fund this week saying smartphone shipments declined for the first time, a reminder that the industry may have peaked.
 The Taiwanese company, an industry bellwether whose clients include Qualcomm Inc. and Nvidia Corp., triggered a selloff in chip makers and tech stocks from Europe to Asia. As the main manufacturer of Apple’s processors, its tepid revenue forecast also revived fears that the iPhone X may already be losing momentum a quarter after its release. Apple slid almost 4 percent.
In Korea, Samsung Electronics Co. fell 2.2 percent while SK Hynix ended 4 percent lower. Shares of Japanese semiconductor equipment and silicon wafer makers, including Tokyo Electron Ltd. and Alps Electric Co., also fell. Their Chinese peers held up better, rallied strongly on hopes Beijing will prop up the industry as its relationship with Washington sours. Semiconductor Manufacturing International Corp., the largest of the Hong Kong-listed Chinese chip makers, was largely unchanged in the afternoon.

“TSMC still seems to be relatively positive about cryptocurrency mining in the second half though it sees some weakness in the segment in the second quarter, so it appears that it is weakness in demand for iPhones that led to TSMC cutting its full-year forecast,” said Vincent Chen, head of regional research for Yuanta Securities Investment Consulting. “The global semiconductor rout came because TSMC not only trimmed its 2018 growth, but also slashed its forecast for the overall semiconductor market.”

TSMC is the world’s foremost manufacturer of chips designed by other companies, and its earnings are a key indicator of demand given chip makers and electronics manufacturers increasingly outsource costly production. The company produces the main semiconductor components of the iPhone and many of the world’s other best-selling smartphones. It gets more than 20 percent of its revenue from Apple, according to data compiled by Bloomberg.

“TSMC’s exposure to the iPhone is high and today’s guidance proves that the company is just another victim of weak iPhone demand,” Mark Li, an analyst at Bernstein, said in a post-earnings note.

Tokyo Electron closed down 2.1 percent and Screen Holdings Co. 4.8 percent, while Hitachi High-Technologies Co. lost 3.6 percent of its value. Still, Masahiro Nakanomyo, an analyst at Jefferies in Tokyo, said TSMC’s increased spending plans should be positive for TSMC’s Japan-based suppliers in the long term. The Taiwanese company tacked on about half a billion dollars to its capital expenditure for 2018.

“Japanese semiconductor production equipment firms should see a rebound in orders from TSMC in the second half of 2018,” Nakanomyo wrote in a note.

While TSMC is getting more growth from new customers, such as those seeking powerful chips to mine digital currencies, it’s confronting a slowdown in demand from smartphone vendors as developed markets get saturated and replacement cycles lengthen. JPMorgan Chase & Co. analyst Gokul Hariharan estimates that, quarter on quarter, the company’s Apple-related revenues may plunge roughly 50 percent in the second quarter after a 30 percent drop in the first.

Chip and chip-equipment stocks beyond Asia had fallen Thursday on the TSMC news. Applied Materials Inc., which sells TSMC production machinery, fell as much as 7.2 percent. Broadcom Inc., another TSMC customer and a major supplier of phone parts, fell as much as 3.6 percent. European chip stocks also weakened, with Dialog Semiconductor PLC declining 4 percent and STMicroelectronics NV dropping 3.3 percent.


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Author: Debby Wu
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