Samsung Electronics Co’s chip foundry business is adding production capacity and more advanced manufacturing techniques, aiming to make gains on market leader Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
The South Korean company said that it would introduce 2-nanometer production for mobile phone parts by 2025 and expand applications.
Samsung would also significantly increase output in Pyeongtaek, South Korea, 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 memorychip 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-nanometer process technology, which would improve performance by 12 percent and power efficiency by 25 percent compared with its most advanced offering today, which is at 3 nanometers.
Like other chipmakers, Samsung is looking to geographically diversify its manufacturing footprint, which is heavily focused on East Asia.
The company, which has operated a facility in Austin for about 20 years, expects to complete the Taylor plant this year, aiming to commence operations in the second half of next year.
The expansion of production lines at Pyeongtaek along with the Taylor fab would boost Samsung’s capacity sevenfold by 2027 compared with 2021, the company said.
In addition to current chip manufacturing sites, Samsung plans to expand into a new Yongin production base.
US President Joe Biden’s administration is looking to cultivate domestic chip production with about US$50 billion in incentives. US officials have said they would give some of the funds to companies like Samsung and TSMC 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.
In the US, TSMC is building two fabs in Phoenix, Arizona, at which it is planning to make chips using its advanced 4-nanometer and 3-nanometer processes, with mass production scheduled to begin next year and in 2026 respectively.
The world’s largest contract chipmaker is also building a plant in Japan’s Kumamoto Prefecture, at which its 12-nanometer, 16-nanometer and 22-nanometer processes, as well as 28-nanometer specialty technology, would be used, with commercial production expected to start next year.
Meanwhile, a senior TSMC executive last month said that talks over a possible plant in Germany were continuing and that the earliest a decision would be made is in August.
Additional reporting by CNA and Reuters
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