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Samsung Electronics to Beef up Older Foundry Processes
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businesskorea.co.kr, Oct. 24, 2022 –
For the last two to three years, Samsung Electronics has focused on developing ultra-micro chip fabrication nodes to win competition with Taiwan's TSMC. The two global foundry giants competed neck and neck to grab the title of the world's first to mass produce 5-nm and 3-nm chips. However, in terms of market share, TSMC has so wide a gap with Samsung Electronics that the word competition is not appropriate. This is because TSMC dominates the traditional/customized process sector, which accounts for more than half of the foundry market, based on its overwhelming production capacity.
Samsung Electronics is now shifting the focus of its strategy to strengthening traditional and specialized processes to undermine TSMC's dominance. Its Foundry Division plans to ramp up the number of traditional and specialized nodes by 10 or more by 2024. By 2027, Samsung's traditional/specialized process production capacity will increase 2.3 times from 2018.
Traditional processes refer to older nodes such as 10-nm, 14-nm, 28-nm, 65-nm, and 180-nm that have been standardized. Specialized processes mean traditional nodes customized for specific customers.
TSMC has been dominating the traditional/specialized sector. The Taiwanese foundry giant has continuously introduced highly advanced process technologies, but at the same time, maintained older processes for existing customers. It is known that more than half of TSMC's output comes from its traditional and specialized nodes. In the third quarter of this year, 46 percent of TSMC's sales came from these nodes. There are many customers who do not need such cutting-edge processes as 7-nm, 5-nm, and 4-nm.
Customers that need chips for smartphones, such as Qualcomm and Apple, use foundry companies' 5-nm and 4-nm processes. But automotive semiconductor manufacturers such as NXP mainly use a 28-nm process. Currently, semiconductors for automobiles do not need to be as small, fast, and efficient as those for smartphones.
It has not been easy for Samsung Electronics to follow TSMC's strategy so far because there was a big difference in the two companies' foundry business histories.