While average customers know of Samsung for their finished products (smartphones, TVs, etc.), the company actually produces a lot of the components used inside these devices. One area of focus is the company's chip foundry business which they use to produce their Exynos SoCs. Samsung competes with the likes of TSMC and Intel as one of the few who actually fabricate their own chips in-house and it looks like the South Korean tech giant is looking to expand in this area.
Samsung is the market leader when it comes to technology like AMOLED displays and memory chips, but they actually lag behind TSMC when we just look at contract manufacturing for SoCs. Current reports puts TSMC at 50.6% last year while Samsung was only able to capture 7.9% (though important clients). They're even trailing behind the likes of Global Foundries and UMC which were reported to have 9.6% and 8.1% respectively. But this new move from Samsung shows they want to shrink that gap over the next few years.
Samsung doesn't have any unrealistic projections either, with its Executive Vice President and head of the new Samsung foundry division, E.S. Jung, saying the company wants to become a strong #2 player in the market. If Samsung's plans are successful, then they should easily be able to hit that goal too. Mr. Jung also says they'll be able to keep these new factories flexible so they can increase or decrease production depending on the demands of the market.
Samsung will be able to do this by relying on memory chip lines when demand for regular chip demand is low. This is something that would benefit both Samsung and consumers as high demand for memory chips in both the smartphone and PC sectors have increased pricing significantly. Samsung's end goal with this new expansion has them trying to obtain 25% of the chip manufacturing market over the next 5 years.
Source: Reuters
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