On Wednesday, Samsung Electronics unveiled its strategy of enlarging its semiconductor production, with an eye to eventually overtake TSMC as the top player in the field. They aim to kick off the production of 2nm mobile chips in 2025, to be followed by its production of high-performance computing chips in 2026 and automotive chips in 2027. In order to reach these objectives, the company announced it would be expanding its chip manufacturing factories in Pyeongtaek, South Korea, and Taylor, Texas.
On Wednesday, Samsung Electronics unveiled its plan to expand its chip manufacturing operations, including the production of leading-edge semiconductors, in order to close the gap with market leader Taiwan Semiconductor Manufacturing Co. The South Korean technology giant is perhaps best known for its phone offerings, but its semiconductor unit is its most profitable. It manufactures memory chips for data centers and laptops. Additionally, Samsung's foundry business, which produces semiconductors for other chip design firms such as Qualcomm, is also significant. After signaling earlier this year that it would start creating chips with the 2-nanometer process in 2025, the firm has now provided a more comprehensive road map. Mass production of the 2-nm process for mobile applications will kick off in 2025, followed by the introduction of high-performance computing in 2026 and automotive in 2027.
The size of each transistor on a chip is represented in nanometers. A decrease in nanometers yields more efficient and powerful chips; Apple's newest iPhone processor was created with a 5-nm process. Moving forward, Samsung expects that smartphones will need more advanced chips and is therefore preparing for it in 2025. High-performance computing chips, which enable data centers to train and deploy artificial intelligence applications, are in demand; this is partly driven by the success of OpenAI's ChatGPT. Nvidia, a market leader in AI chips, is dependent on foundries such as TSMC to produce its semiconductors. However, Samsung's foundry is behind TSMC, the biggest contract manufacturer, considerably. Counterpoint Research found that TSMC accounted for 59% of global semiconductor revenue in the first quarter of this year while Samsung occupied 13%. To bridge the gap, Samsung is increasing its capacity and making plans for the chip market's high-growth areas. The company stated that its 1.4-nm process will begin in 2027 as planned; in addition, new chip manufacturing lines in Pyeongtaek, South Korea, and Taylor, Texas, are ongoing.
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