Samsung Electronics beefs up chip foundry business as it looks to challenge TSMC
- Samsung will increase output in Pyeongtaek, South Korea, and Taylor, Texas, to shore up the foundry division, which makes chips for customers on a contract basis
- The company said its 2-nm process would improve performance by 12 per cent and power efficiency by 25 per cent compared to its most advanced offering today
Samsung Electronics’ chip foundry business is adding production capacity and more advanced manufacturing techniques, aiming to make gains on market leader Taiwan Semiconductor Manufacturing Co (TSMC).
The South Korean conglomerate said it will introduce so-called 2-nanometre production for mobile phone parts by 2025 and expand applications. Samsung will also significantly increase output in Pyeongtaek, a city in the country's Gyeonggi province, and Taylor, Texas, to shore up its foundry division, which makes chips for customers on a contract basis, the company said at a presentation on Tuesday in San Jose, California.
The world’s largest memory maker is looking to catch up with TSMC, while also fending off a nascent challenge from Intel Corp, which is pushing into the foundry market. While the chip industry in general is suffering from sluggish demand for mobile and personal computer parts, the artificial intelligence boom has spurred interest in advanced processors.
Samsung shared details of its 2-nm process technology, which would improve performance by 12 per cent and power efficiency by 25 per cent compared to its most advanced offering today, which is at 3-nm.
Like other chip makers, Samsung is looking to geographically diversify its manufacturing footprint, which is heavily concentrated in East Asia. The company, which has operated a fabrication facility in Austin for about 20 years, expects to complete the new Taylor plant this year, targeting to kick off operation in the second half of 2024.
The expansion of production lines at Pyeongtaek along with the Taylor fab will boost Samsung’s capacity sevenfold by 2027 compared to 2021, the company said. In addition to current chip manufacturing sites, Samsung will expand into a new production base in Yongin, also in Gyeonggi province.
The Biden administration is looking to cultivate domestic chip production with roughly US$50 billion in incentives. Officials have said they will give some of the funds to companies like Samsung that are based overseas, but expanding on US soil. Europe and Japan are also setting aside government money to foster the industry in those locations.