Samsung aims to make the world's most advanced chips in 5 years, as it plays catch up with TSMC (2024)

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    Samsung said it will begin making chips with a 2 nanometer process in 2025 and 1.4 nanometer process in 2027. These would be some of the most advanced semiconductors in the world. Samsung is in a race to catch up with market leader TSMC.

    SeongJoon Cho | Bloomberg | Getty Images

    Samsung said Tuesday it aims to make some of the most advanced semiconductors in the world in five years' time, as the race between the South Korean electronics giant and the world's largest chip maker TSMC heats up.

    The company laid out a roadmap for its chip production plans, and said it will begin making chips with a 2 nanometer process in 2025 and 1.4 nanometer process in 2027.

    The nanometer figure refers to the size of each individual transistor on a chip. The smaller the transistor, the more of them can be packed onto a single semiconductor. Typically, a reduction in nanometer size can yield more powerful and efficient chips.

    For comparison, the processor in Apple's latest iPhone 14 Pro and Pro Max models is a 4 nanometer chip.

    Samsung began producing 3 nanometer chips earlier this year.

    Shares of Samsung in South Korea closed nearly 4% higher on Tuesday.

    The South Korean firm, known for consumer electronics and memory chips, is looking to ramp up its contract chipmaking, or foundry business, in a bid to catch up with Taiwan's TSMC.

    Samsung is the second-biggest foundry globally by revenue, with a 17.3% market share compared to 52.9% for TSMC, according to TrendForce.

    For its part, TSMC expects to begin 3nm chip production this year with production of 2nm set to begin in 2025. However, the company has not officially announced plans to mass produce 1.4nm chips.

    "This is the first time that SEC (Samsung Electronics) guides for its long term foundry roadmap and I think it is more aggressive than TSMC and market expectations," SK Kim, analyst at Daiwa Capital Markets, told CNBC.

    Samsung's ambitious plans come amid global economic headwinds and signs of a slowdown in semiconductor demand. Global chip industry sales fell 3.4% in August compared to July, according to the U.S.-based Semiconductor Industry Association.

    Despite this, Samsung said it plans to expand its production capacity for the most advanced chips by more than three times by 2027 compared to this year, highlighting its bullishness on future demand.

    These include its factories in the U.S. Samsung has a plant in Austin, Texas, and is currently building a $17 billion facility in Taylor in the same state.

    Washington has been looking to attract chipmakers like Samsung and TSMC to set up factories in the U.S. so that it can reduce reliance on the manufacturing hubs of Taiwan and South Korea.

    While Samsung has put a big focus on cutting edge chips, the company also said semiconductors for high-performance computing, automotive and 5G uses will make up more than 50% of its foundry business by 2027. These are usually less advanced chips.

    Samsung aims to make the world's most advanced chips in 5 years, as it plays catch up with TSMC (2024)

    FAQs

    Does Samsung make chips or TSMC? ›

    It will also establish an advanced packaging operation, an R&D fab, and R&D as well. Samsung is the largest memory chip manufacturer in the world with a global market share of over 45% in Q4 of 2023, and it also has the second largest foundry business after Taiwan Semiconductor Manufacturing Company (TSMC).

    Will Samsung catch up to TSMC? ›

    Samsung, playing a distant second to TSMC for quite some time, has vowed to launch the 1.4-nm chip manufacturing node by 2027, leapfrogging both TSMC and Intel Foundry Services (IFS) by a wide margin. The South Korean electronics conglomerate is also confident about producing the 2-nm chips in 2025 as planned.

    Who has the most advanced microchips? ›

    TSMC, or Taiwan Semiconductor Manufacturing Company, is the world's largest and most advanced contract chip manufacturer. TSMC makes semiconductors for companies from Apple to Nvidia .

    Where does Samsung get their chips from? ›

    From south of Seoul to north of Austin, our foundry superhighway builds and delivers the chips to make the world-class devices with almost two decades of reliable capacity and best-in-class cycle times.

    Does Apple buy chips from TSMC? ›

    Apple will receive all of TSMC's first-generation 3-nanometer process chips this year for upcoming iPhones, Macs, and iPads, according to industry sources cited by DigiTimes. As early as May, Apple was known to have booked nearly 90% of the Taiwanese pure-play foundry for its upcoming next-gen devices.

    Does Apple use TSMC chips? ›

    For a time, Apple used multiple sources for its processors, using Samsung-made processors in some iPhones and TSMC-made chips in others. But all of Apple's chips have been manufactured at TSMC for most of the last decade.

    Who gets chips from TSMC? ›

    Most of the leading fabless semiconductor companies such as AMD, Apple, ARM, Broadcom, Marvell, MediaTek, Qualcomm and Nvidia, are customers of TSMC, as are emerging companies such as Allwinner Technology, HiSilicon, Spectra7, and UNISOC.

    Who is bigger TSMC or Samsung? ›

    TSMC leads the foundry industry with a market share of nearly 60%, according to technology market research firm Counterpoint. Samsung ranks second with a share of about 13%, followed by Taiwan's UMC at 6%.

    Does Apple buy chips from Samsung? ›

    Apple relies on third parties like Samsung and Micron for memory. “Our aspiration is the product,” Srouji said, when asked if Apple will try to design every part of its chips. “We want to build the best products on the planet.

    What country makes the best microchips? ›

    Taiwan produces over 60% of the world's semiconductors and over 90% of the most advanced ones. Most are manufactured by a single company, Taiwan Semiconductor Manufacturing Corporation (TSMC).

    Which is the powerful chip in the world? ›

    The Blackwell B200 GPU, created by US tech giant Nvidia, significantly boosts AI training and processing speeds. This development could lead to breakthroughs in areas like the metaverse, manufacturing, robotics, and healthcare.

    Who is the largest chipmaker in the world? ›

    Sometimes called the most important company in the world, TSMC (officially Taiwan Semiconductor Manufacturing Company) produces an estimated 90% of the world's super-advanced semiconductor chips, which are used to power everything from smartphones to artificial intelligence applications.

    Who makes chips for Apple? ›

    Apple fully controls the integration of Apple silicon chips with the company's hardware and software products. Johny Srouji is in charge of Apple's silicon design. Manufacturing of the chips is outsourced to semiconductor contract manufacturers such as TSMC.

    Who builds Samsung chips? ›

    Samsung Foundry's integrated foundry network builds the chips that drive product innovation for our customers from factory robotics to telemedicine to the expanding digital frontier.

    Who makes Nvidia chips? ›

    TSMC remains the predominant manufacturer of Nvidia's high-end AI chips.

    Does Samsung manufacture chips? ›

    As a leader in the global semiconductor industry, Samsung has been a continuous innovator in semiconductor technology for the last 50 years. And along that journey, we've been proud to be an integral part of Central Texas since 1996, when we first started chip manufacturing in the United States.

    Does Samsung make its own chips? ›

    Apple, Google, and Samsung all have their own in-house chips with Apple's A series, Google's Tensor, and Samsung's Exynos.

    Does Samsung produce microchips? ›

    Samsung, one of the largest chip makers in the world, planned to invest a total of 500 trillion won (US$371 billion) by 2047 in a “mega-cluster” semiconductor project south of Seoul, the South Korean government said in mid-January.

    Does Samsung make their own microchips? ›

    Samsung Foundry's integrated foundry network builds the chips that drive product innovation for our customers from factory robotics to telemedicine to the expanding digital frontier.

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