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The world’s No. 2 foundry caters to demand for chips used in high-performance computers and artificial intelligence.
Samsung Electronics’ chip contract manufacturing business has announced plans to more than triple its manufacturing capacity for advanced chips by 2027 to meet high demand despite current global economic headwinds.
The world’s second-largest foundry after Taiwan Semiconductor Manufacturing Co. is targeting mass production of 1.4-nm chips by 2025 and 1.4-nm chips for use in applications such as high-performance computing and artificial intelligence.
“There is some progress. [in raising prices] This year and the costs are being reflected… New orders currently awarded will be made after 2-3 years, so the direct impact of the current environment will be minimal,” said Munso Kang, executive vice president of Samsung Electronics Foundation Business, on Tuesday.
Samsung began mass production of chips with 3-nm technology in June. The company was in talks with potential customers for 3-nm collaboration, including Qualcomm, Tesla and Advanced Micro Devices, Samsung said.
Samsung, the world’s largest memory chip maker, has struggled to meet customer expectations for foundry products in recent years. Analysts said the company had quickly pushed out advanced technology to compete with TSMC, but suffered from a lack of experience with long-term customer partnerships in contract manufacturing.
Samsung CEO Kyung Ke-Hyun told reporters that the factory’s work has delayed TSMC’s development schedule and performance in 5- and 4-nm chips, but customers will want the second version of 3-nm chips from 2024.
“Since the launch of 3-nm mass production this year, we have been anticipating customer expectations,” Kang said.
He pointed out that demand for advanced 5-nm and smaller chips is increasing rapidly despite current inflation due to long-term expansion in high-performance computing, artificial intelligence, 5G and 6G connectivity and automotive applications.
Even with all the planned investments, the industry may find it difficult to meet demand, he said.
The limited number of sophisticated chip manufacturing machines manufactured by Dutch company ASML limits how much advanced chip capacity can be added, Kang added.
“US customers are particularly interested in manufacturing in the United States, for supply chain stability,” Kang said. “Our Taylor site is very large … it’s a great place to expand,” he added.
Samsung is currently building chip production in Taylor, Texas, for operations to begin in 2024.
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