The South Korean consumer electronics giant, already one of the world's biggest semiconductor manufacturers, unveiled a plan Tuesday to produce a graphics chip to be used largely for video games.

The new chip - a 512 megabit graphics microprocessor that reaches a top speed of 8 gigabytes per second - will be the fastest graphics product in the world, said Muez Deen, director of graphics for the U.S. semiconductor unit of Samsung.

The company did not disclose the financial or other business details of manufacturing the chip, but it said in a news release that it will begin mass-producing the product by the end of the year, and it has sent samples of the chip to graphics-card manufacturers who would be using it to power game consoles.

Some analysts remain skeptical, however, about what the new chip means for Samsung.

For one thing, the company "doesn't have a long history in the graphics business," said Carter Driscoll, senior technology analyst at IRG Group in New York City, a subsidiary of TheStreet.com.

Driscoll said one problem with making graphics chips is the gaming console market, which "is a growing business, but runs in a boom-and-bust cycle," and thus is less stable than other electronics sectors, such as personal computers.

Another issue with graphics chips, he noted, is that serious video gamers tend to be extremely technologically savvy and require high standards from their consoles, thus making it difficult for game producers, graphics designers and chip makers to keep them satisfied.

In addition, Driscoll said, Intel remains the world's biggest chip maker and the dominance of the Santa Clara, Calif., company extends to the graphics market, making competition in the sector fierce for all the other potential players.

Nevertheless, he acknowledged, Samsung's latest chip effort represented "another way to diversify ... and a good move in the longer term," even if it did not lead to immediate profits.

Peter King, director of connected home service in the London office of Strategy Analytics, an international consultancy group, said Samsung has come a long way over the past decade in raising not only its global profile, but also the reputation of its products, and he suggested that the graphics-chip venture would only boost its standing.

Samsung "is a massive organization, with its fingers in many pies," King told UPI, adding that the Seoul company has enjoyed a "fantastic journey" over the past few years.

"Only a few years ago, you didn't want to admit you had (a Samsung product) in the home ... and now you're proud to have it," he noted.

Shihoko Goto is UPI's Senior Business Correspondent.

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