Samsung to take chip war to TSMC with $116 billion investment

(Image credit: TSMC)

The chip war is getting interesting.  

While TSMC (Taiwan Semiconductor Manufacturing Co) is the clear market leader, Samsung, in an effort to shake up the topper, has unveiled plans to invest $116 billion in its next-gen chip manufacturing business. 

Samsung will get down to mass produce 3nm chips by 2022. This is the first time that Samsung has revealed its 3nm mass production target, according to a Bloomberg report.

Samsung is already developing initial design tools with key partners, Park Jae-Hong, executive vice president of foundry design platform development, has been quoted as saying.

Samsung's plan is to unseat TSMC from its perch by becoming a supplier for the likes of Apple and AMD, which as of now shop with the Taiwan company.

Samsung's quest for all-round domination

Samsung Foundry in Hwaseong, Korea.

Samsung Foundry in Hwaseong, Korea. (Image credit: Samsung)

Samsung, driven by the ambition of Jay Y Lee, who is now on his own after the demise of his dad, Lee Kun-hee, last month, wants Samsung to be the leader in chipmaking and 5G networking to power its next phase of growth. 

It is not as if Samsung is an outsider in the chip-making business. Remember, it was the first manufacturer of Apple’s A-series iPhone processors.

But till last year, TSMC controlled more than half of the contract chipmaking market while Samsung had just 18% market share.

Samsung is currently the world’s largest maker of computer memory and displays, but now wants to be a dominant player in the $250 billion foundry and logic-chip industry, which is expected to see heightened action thanks to the developments in artificial intelligence and fifth-generation wireless technology.

Samsung has already secured enough orders from major clients to keep its currently most-advanced 5nm process lines busy for the next few years, a company executive has been quoted as saying by Bloomberg. "In recent months, Nvidia and IBM Corp. are among those that turned to Samsung for some of their chipmaking needs, while Qualcomm Inc. has reportedly awarded the company a 1 trillion won ($858 million) contract to build its flagship mobile processors."

TSMC's plans

For its part, TSMC has dominated Apple's processor foundry orders, and has included high-end chip orders from Qualcomm, MediaTek, Supermicro, and Huida.

TSMC has been leading Samsung for about two years in mass production of 7nm and 5nm.

TSMC is also embarking on 3nm research and development, with the goal of trial production in 2021 and mass production in the second half of 2022. 

It is the time line that Samsung is also planning for itself.  If it succeeds, it will be the closest battle between Samsung and TSMC in the advanced process competition.

Source: Bloomberg

Balakumar K
Senior Editor

Over three decades as a journalist covering current affairs, politics, sports and now technology. Former Editor of News Today, writer of humour columns across publications and a hardcore cricket and cinema enthusiast. He writes about technology trends and suggest movies and shows to watch on OTT platforms.