Samsung steps up $164 billion plan to take on Taiwan chipmaker TSMC

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SEOUL (BLOOMBERG) – Samsung Electronics has begun building a cutting-edge chip production line intended to help it take on Taiwan Semiconductor Manufacturing Co (TSMC) in the business of making silicon for external clients.

South Korea's largest company said it's started construction on a 5-nanometer fabrication facility in Pyeongtaek, south of Seoul, dedicated to its made-to-order foundry business, an arena TSMC dominates. Based on the extreme ultraviolet lithography or EUV process, Samsung expects the fab's output to go towards applications from 5G networking to high-performance computing from the second half of 2021, it said in a statement.

Samsung, the world's largest maker of computer memory, smartphones and displays, in 2019 outlined its aim of spending US$116 billion (S$164 billion)to compete with TSMC and Intel in contract chipmaking, making silicon for customers like Qualcomm or Nvidia. Its announcement on Thursday (May 21) coincides with the announcement of restrictions on the sale of semiconductors made with American gear to China's Huawei Technologies Co., a constraint that threatens more than a tenth of TSMC's business.

"This will enable us to break new ground while driving robust growth for Samsung's foundry business," E. S. Jung, head of the contract chipmaking division, said in a statement.

Samsung first unveiled its expansion blueprint in April 2019, outlining at the time its goal of hiring thousands and ramping up investment in logic chips in the years leading up to 2030. That initiative arose as sales of smartphones and consumer electronics plateaued and competition from Chinese rivals depressed margins.

EUV is the latest and most advanced chipmakingRead More – Source