In a bid to take on the market leader TSMC, Samsung Electronics' foundry business is planning to increase its production capacity and adopt more advanced manufacturing techniques.
The company plans to begin mass production of the 2-nanometer process for mobile applications in 2025.
During a presentation in San Jose, California on Wednesday (28 June), the company announced its intention to significantly increase output in Pyeongtaek, South Korea, and Taylor, Texas.
This move is aimed at strengthening its foundry division, which manufactures chips for customers on a contract basis.
As the world's largest memory chip maker, Samsung is striving to catch up with TSMC and defend against the emerging competition from Intel Corp, which pushing into the foundry market.
The artificial intelligence boom has sparked interest in advanced processors, despite the chip industry as a whole suffering from sluggish demand for mobile and personal computer parts.
During the event, Samsung also revealed details of its 2-nanometer process technology, which will enhance performance by 12 percent and power efficiency by 25 percent compared to its current most advanced offering at 3 nanometers.
Apart from the 2nm process plans, Samsung also plans to deliver mass production using a 1.4nm process by 2027.
Similar to other chipmakers, Samsung aims to diversify its manufacturing footprint geographically, as it currently heavily focuses on East Asia.
With a facility in Austin for approximately 20 years, Samsung plans to complete the Taylor plant this year and commence operations in the second half of next year.
Samsung stated that the expansion of production lines at Pyeongtaek, along with the Taylor fab, would increase their capacity by sevenfold by 2027 compared to 2021.
Apart from the current chip manufacturing sites, Samsung intends to expand into a new production base in Yongin, South Korea.
The Biden administration in the US aims to promote domestic chip production by offering approximately $50 billion in incentives.
US officials have indicated that they would allocate some of these funds to overseas companies like Samsung and TSMC, provided they expand their operations on the American soil, reports The Register.
Meanwhile, Europe and Japan are also allocating government funds to support the growth of the industry in their respective regions.
TSMC is currently constructing two fabs in Phoenix, Arizona, in the US.
These fabs will utilise TSMC's advanced 4-nanometer and 3-nanometer processes for chip production.
Mass production is scheduled to commence in the coming year and in 2026, respectively. In addition to the US facilities, TSMC is also establishing a plant in Japan's Kumamoto Prefecture.
This plant will employ TSMC's 12-nanometer, 16-nanometer, and 22-nanometer processes, as well as their 28-nanometer specialty technology. Commercial production at this facility is expected to begin next year.
Ongoing discussions regarding a potential plant in Germany were confirmed by a senior TSMC executive last month. The decision on whether to proceed with the plant is anticipated to be made no earlier than August.
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