World-renowned electronics company Samsung appears set to ramp up production of advanced chips to match TSMC’s.
Samsung Electronics is on a quest to more than triple its production of advanced chips in five years. According to the South Korean electronics giant, it will begin manufacturing chips with a 2 nanometer process in 2025. Furthermore, Samsung also revealed plans to start making 1.4 nanometer process chips in 2027. All projected advanced chip types will follow the mass production of 3 nanometer semiconductors that the consumer electronics company began this year. Samsung’s plan is to make some of the world’s most advanced chips.
The Samsung outlook to drastically increase manufacturing capacity on advanced chips by 2027 also feeds a broader company target. The South Korean-based corporation seeks to match the output of Taiwan Semiconductor Manufacturing Co (TSMC). Samsung is currently second only to TSMC as the biggest foundry globally and intends to bridge that gap. As the second-largest, the company controls a relatively smaller 17.3% compared to TSMC’s more imposing 52.9% market share. In an attempt to eke out more market share from its more dominant competitor, Samsung is targeting its chips towards a host of readily coveted applications. These include high-performance computing, as well as artificial intelligence. Furthermore, the electronics corporation seeks to actualize its agenda amid strong global economic constraints. Speaking on how Samsung intends to approach the issue Moonsoo Kang, executive vice president of the company’s foundry business, offered:
“There has been some progress [in raising prices] this year, and costs are being reflected … New orders won currently will be made after 2-3 years, so the direct impact of the current atmosphere will be minimal.”
Ambitious Samsung Advanced Chips Agenda Raising Some Eyebrows
Samsung’s bullishness on future demand for semiconductors has not gone unnoticed by some market observers. For instance, SK Kim, analyst at Daiwa Capital Markets, stated in a media session:
“This is the first time that SEC (Samsung Electronics) guides for its long-term foundry roadmap and I think it is more aggressive than TSMC and market expectations.”
Meanwhile, TSMC is eyeing a rollout of 3nm chips this year. It also intends to further produce 2nm by 2025. However, the Taiwanese semiconductor giant has not officially announced plans to mass produce 1.4nm chips.
At a media session, Samsung co-CEO Kyung Kye-hyun explained that the company’s foundry had lagged behind TSMC in 5 and 4 nanometer chips. However, Kye-hyun also intimated substantial client interest in the second version of 3 nanometer chips expected from 2024.
Kang also echoed Kye-hyun’s sentiments. He said the company has met customers’ expectations since mass-producing 3-nm chips this year. In addition, the Samsung foundry business executive vice president also stated that demand for advanced 5 nanometer chips is rapidly increasing. According to Kang, the increases have come in spite of current inflationary pressures as a result of a string of factors. These include high-performance computing, artificial intelligence, 5G and 6G connectivity, as well as automotive applications.
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