Samsung’s chip manufacturing division said on Tuesday it plans to more than triple its advanced chip manufacturing capacity by 2027 to meet strong demand despite the current global economic headwind.
The world’s second largest foundry after Taiwan Semiconductor Manufacturing Co (TSMC) aims to mass-produce 2nm advanced technology chips by 2025 and 1.4nm technology chips by 2027 for use in applications such as high performance computing and artificial intelligence.
“There has been some progress this year (on price increases) and costs are being reflected… New orders currently won will be made in 2-3 years, so the direct impact of the current atmosphere will be minimal,” Munsu said. Kang, Executive Vice President of Samsung Foundry.
In June, Samsung began mass production of 3nm chips. The company is in talks with potential customers to collaborate on 3nm technology, including Qualcomm, Tesla and AMD, Samsung said.
Samsung, the world’s largest manufacturer of memory chips, has struggled in recent years to meet customer expectations for foundry performance. Analysts say the company has been pushing ahead with cutting-edge technology too quickly to compete with TSMC, but has suffered because it has less experience in the long-term customer collaboration needed in contract manufacturing.
Samsung co-CEO Kyung Kye-hyun told reporters that his foundry business is behind TSMC’s development schedule and performance for 5nm and 4nm chips, but customers are interested in a second version of 3nm chips that will be produced from 2024.
“We have been keeping up with customer expectations since we began mass production of 3nm this year,” said Kang.
He pointed out that the demand for advanced chips of 5nm and above is growing rapidly despite the current inflationary pressure due to the long-term expansion of high-performance computing, artificial intelligence, 5G and 6G connectivity, and automotive applications.
It may be difficult for the industry to keep up with demand, he said, even if all of the planned investments come to fruition.
Kang added that the limited number of advanced chip-making machines that the Dutch company ASML can produce limits the ability to increase chip performance.
“U.S. customers are particularly interested in manufacturing in the United States to ensure supply chain stability,” Kang said. “Our Taylor site is very large… It’s a good site to expand on,” he added.
Samsung is currently building a chip manufacturing facility in Taylor, Texas, which will start in 2024.
© Thomson Reuters 2022