Samsung Sandwiched between TSMC, Intel in Foundry Business

Intel’s drive to strengthen its foundry business poses a new threat to Samsung Electronics, which is in hot pursuit of TSMC. However, as a latecomer to the foundry business, it is difficult for Intel to expand its external customer volume in the short term. This makes analysts say that Intel is still a potential competitor to Samsung.

On Aug. 1, Intel announced that its 3-nm process technology achieved the yield that it initially targeted, according to sources in the semiconductor industry and foreign media outlets. The technology will be used for volume production of Granite Rapids and Sierra Forest, server processors for data centers expected to hit the market next year.

Latecomer Intel, which announced the restart of its foundry business in 2021, has sent shock waves through the foundry industry by demonstrating a hyper-gap technology capability that can threaten Samsung and TSMC. Earlier, in June, Intel said it has implemented the world’s first PowerVia technology, which provides power from the back of a semiconductor device on a test chip. This technology has the advantage that the power wiring can be directly connected to a computing device (transistor), and it is separated from a signal circuit, so the possibility of interference is extremely low. Intel plans to apply PowerVia technology to semiconductor chips made through its 20A (2-nm) process in the future.

Samsung Electronics’ foundry racked up annual sales of US$20.8 billion in 2022, according to market research firm Omdia. Intel may overtake Samsung as the second-largest foundry player if it receives more orders from external customers in addition to those from internal customers. Intel’s foundry sales to external customers were US$768 million in 2022, standing outside the top 10.

However, Intel is not expected to pose an immediate threat to Samsung, many analysts say. “If Intel, the No. 1 CPU maker, counts its internal order volume as its foundry sales, the sales figure is likely to surpass that of Samsung’s foundry business, putting Intel in second place,” said Kim Yang-paeng, an expert researcher at the Korea Institute for Industrial Economics & Trade. “However, winning orders from external customers requires trust based on technical capabilities, and Intel has not shown desired productivity. What Intel is showing is that it has developed some technology, but it has not proved that it can commercialize it. It will be a big challenge for Intel to compete with Samsung Electronics in the short term with respect to landing external orders.”