Samsung woos US chip buyers with tech advances, Texas focus

SAMSUNG Electronics announced an aggressive five-year plan to lure US chip buyers with more advanced technology, aiming to produce transistors that are just 1.4 nanometres wide by 2027.

The company’s chip contract-manufacturing unit - known as a foundry - is looking to triple its revenue by that year from the 2021 level, senior vice-president Moonsoo Kang said at a briefing on Monday (Oct 3) in San Jose, California. To get there, the business will need to make several technological leaps and further inroads in the US market for outsourced chips.

Samsung shares were up as much as 4.1 per cent in Seoul on Tuesday after falling by almost a third this year with rising costs and a downturn in the memory market.

The Suwon-based company is the world’s largest chipmaker by revenue, but its foundry business is playing catch-up with Taiwan Semiconductor Manufacturing Co (TSMC), which has a commanding lead in the market and top-of-the-line production capabilities. Samsung recently lost out to TSMC on an Nvidia order to produce the RTX 40 series of graphics cards, which moved to a 4-nanometre process.

Samsung executives at the briefing said the company’s yields - the percentage of functioning chips per production run - are now among the best in the industry. And it’s racing to stay on the cutting edge of technology. The company aims to take the lead in advanced chipmaking by starting mass production of second-generation 3nm chips in 2024 and then 2nm parts in 2025. That will set the stage for the 1.4nm products two years later.

Part of Samsung’s pitch to US customers is its decision to manufacture in America. Samsung has an existing plant in Austin, Texas, and is building one in the nearby city of Taylor. That new plant, which is set to begin operations in 2024, is likely to use the latest production methods, such as 3nm technology.

SEE ALSO

Samsung to lure 175 million existing India customers with cashback card

Samsung to invest 7t won under plan to tame rising emissions

Samsung also aims to triple its capacity of leading-edge manufacturing by 2027. It has no plans to add to its limited availability of older types of production.

But TSMC is also beefing up its US presence. And Intel, which Samsung overtook to become the world’s biggest chipmaker, is adding capacity in both the US and Europe - part of an effort to balance the industry’s heavy reliance on Asian manufacturing.

Samsung could become an even bigger manufacturer in Texas if needed, Kang said. The company has secured enough sites in the region to let it grow to meet demand. BLOOMBERG