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
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.
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.
Samsung first unveiled its expansion blueprint in April last year, outlining at the time its goal of hiring thousands and ramping up investment in logic chips in the years leading up to 2030.
That initiative arose as sales of smartphones and consumer electronics plateaued and competition from Chinese rivals depressed margins.
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EUV is the latest and most advanced chip making method, requiring machines that cost tens of millions of dollars and delivering better precision and performance in the chips it produces.
TSMC and Samsung, through its spending plan, are the leaders in developing that process and expanding into 5nm and smaller manufacturing nodes.
Before the Covid-19 pandemic, Samsung had started collaborating with major clients on designing and manufacturing custom chips, and that work was already starting to add to its revenue, a Samsung executive has said.
The company’s newest fab in Pyeongtaek joins another 5nm facility in Hwaseong that will begin production in the second half of this year.
