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Samsung takes another step in US$116 billion plan to take on chip maker TSMC

  • South Korea’s largest company has started building a new fabrication plant for its made-to-order chip foundry business
  • The fab’s output is expected to go toward applications that range from 5G wireless networks to high-performance computers

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Some of the chips produced by Samsung Electronics are displayed at the technology giant’s store in Seoul, South Korea, in April of last year. Photo: AP
Bloomberg

Samsung Electronics has begun building a cutting-edge chip production line intended to help it take on Taiwan Semiconductor Manufacturing Co (TSMC) in the business of making silicon for external clients.

South Korea’s largest company said it has started construction on a 5-nanometre fabrication facility in Pyeongtaek, south of Seoul, dedicated to its made-to-order chip foundry business, an arena TSMC dominates.

Based on the Extreme Ultraviolet Lithography or EUV process, Samsung expects the fab’s output to go toward applications that range from 5G wireless networks to high-performance computers from the second half of 2021, the company said in a statement.

Samsung, the world’s largest maker of flash memory chips, smartphones and displays, outlined last year its plan to spend US$116 billion to compete with TSMC and Intel Corp in contract chip making, producing integrated circuits for major customers like Qualcomm or Nvidia Corp.
Flags of Taiwan and Taiwan Semiconductor Manufacturing Co, the world’s largest dedicated chip foundry, are displayed next to the company’s headquarters in Hsinchu, Taiwan, in October of 2017. Photo: Reuters
Flags of Taiwan and Taiwan Semiconductor Manufacturing Co, the world’s largest dedicated chip foundry, are displayed next to the company’s headquarters in Hsinchu, Taiwan, in October of 2017. Photo: Reuters

Its statement on Thursday coincides with the announcement of restrictions on the sale of semiconductors made with American hardware and software to Chinese telecommunications equipment vendor Huawei Technologies, a constraint that threatens more than a tenth of TSMC’s business.

“This will enable us to break new ground while driving robust growth for Samsung’s foundry business,” ES Jung, head of the company’s contract chip making division, said in a statement.

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