Samsung intensifies chip wars; invests $116 billion into business

Samsung Electronics is pouring $116 billion into its next-generation chip business that includes fabricating silicon for external clients, betting it can finally close the gap on industry leader Taiwan Semiconductor Manufacturing  as soon as two years from now.

South Korea’s biggest company will mass-produce 3-nanometer chips in 2022, a senior executive at its foundry division told attendees at an invite-only event last month. That target, which hasn’t previously been reported, means it’s on a path to start churning out the industry’s most advanced semiconductors the same year as its Taiwanese rival expects to pass that milestone. Samsung is already developing initial design tools with key partners, Park Jae-hong, executive vice-president of foundry design platform development, told conference delegates.

If Samsung succeeds, that will be a breakthrough for its ambition to become the chipmaker of choice for the likes of Apple and Advanced Micro Devices that now rely on foundries like TSMC. The business isn’t new to Samsung, which was the first manufacturer of Apple’s A-series iPhone processors, but the company’s renewed push is now shepherded by billionaire heir Jay Y Lee, who wants to see it establish tech leadership across advanced sectors like chipmaking and 5G networking to power its next phase of growth. Park’s comments suggest Samsung is accelerating its bid to compete with iPhone-chipmaker TSMC, one of the biggest beneficiaries of this year’s wave of stay-at-home demand for personal electronics.

“To actively respond to market trends and lower the design barrier for competitive systems-on-chip development, we’ll keep innovating our cutting-edge process portfolio, while strengthening Samsung’s foundry ecosystem through close collaboration with partners,” Samsung’s Park told attendees, according to people at the event.