Samsung Electronics has announced plans to mass produce their process technology in the form of advanced chips, with their two-nanometer process technology available by 2025 and 1.4-nanometer transistors by 2027. The five-year strategy announcement occurred at the firm’s annual Samsung Foundry Forum event.
Samsung introduced its roadmap to expand its production capacity for the advanced nodes “by more than three times” by 2027. This innovation in semiconductor process technology comes as a response to recent market trends in AI technology, high-performance automotive applications, and 5 and 6G connectivity. In addition, Samsung intends to support Foundry customers through the development of this advanced process technology.
Semiconductor technology for automotive customers
Despite Samsung’s announcement concentrating on producing high-quality chips, it also included the company’s intention for semiconductors for high-performance computing, automotive and 5G to make up over half of its foundry business by 2027.
The firm intends to act within the high-performance and low-power semiconductor markets such as HPC, automotive, 5G and the Internet of Things, with support for their existing services. Samsung anticipates that these sectors will exceed 50% of its foundry portfolio by 2027.
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As is well known, Samsung offers turnkey solutions for all IoT fields, including smart homes, B2B and industrial. For example, its turnkey security service has two MCU cores and high-density DRAM, while its Exynos i powers processing and its IoT SE provides an e-Flash based solution for hardware-level protection. Exynos i integrates RF and Wi-Fi for connections. Samsung explains that compatible IoT eco-partnerships for cloud services include Microsoft Azure, AWS and IoT Standard.
At this year’s Foundry Forum, Samsung introduced process notes by enhancing GAA-based 3nm process support for HPC and mobile and continuing to transform the 4nm process for HPC and automotive applications.
Samsung aims to meet the needs of automotive customers by providing embedded non-volatile memory solutions that are based on 28nm technology. The firm intends to expand process nodes by introducing 14nm eNVM solutions in 2024, with the plan to add 8nm eNVM down the line. While mass production has already been taking place for 8nm RF after 14nm RF, the 5nm RF is still in development.
The firm also invested in expanding its production capacity for more advanced process technology. Samsung shared information regarding its strategy for its Foundry Business. This plan focused on new technological efforts for customers, including foundry process technology innovation, process technology optimization, stable production capabilities and customized services.
Competition within the chip-making industry
This new announcement makes it easy to speculate Samsung’s intentions regarding its place among competitors. Samsung is likely trying to make a space for itself within the market and compete against more established companies like Taiwan Semiconductor Manufacturing Company.
TSMC is undoubtedly the most significant player in the chip-making industry today, with a market share of around 52.9% compared to Samsung’s second-biggest market share of around 17.3%, according to TrendForce. TSMC is currently targeting 3nm chip production this year with plans to start production of 2nm in 2025, intending to eventually produce advanced chips in the United States.
Since President Biden signed the CHIPS Act of 2022 in August, semiconductor manufacturing within the United States has become more appealing. The act aims to support fortified domestic semiconductor manufacturing, design and research to help the United States regain a leading position in semiconductor chip manufacturing, supporting its ability to compete with China.
Chip manufacturers like Samsung and TSMC could benefit from manufacturing in the United States, as the law provides $52 billion worth of subsidies for manufacturing incentives and research investments and a 25% investment tax credit for semiconductor manufacturing.
The development of a new Samsung plant in Taylor, Texas communicated its decision to manufacture out of the United States, which may also be enticing for Apple. Since Samsung lost its portion of Apple’s business to TSMC for the iPhone 7’s A10 Fusion chip, TSMC has held the lead ahead of Samsung. However, Samsung’s announcement of plans to develop advanced chips could be interpreted as a way to regain Apple’s chip business.
After all, TSMC did increase its chip production prices in 2023 by 6% for most of its fabrication processes. While some recent reports have indicated that Apple may have yielded to this price increase, no official news reports have confirmed it. With TSMC asking more for chip production, Apple may consider exploring a new provider, and Samsung’s recent announcements definitely wouldn’t hurt its chances of regaining Apple’s business.
Still, Samsung’s plan to triple its capacity and produce this new technology on such an aggressive timeline is rapid, and the announcement did not provide concrete plans on their methods for developing this chip technology. It’s possible that Samsung’s pitch is merely wishful thinking and a way to appear attractive as a semiconductor provider to Apple and their existing customers.