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Will Micro-Process Earn Samsung Electronics 2nd Place in Foundry Sector?
Aiming to Be 2nd Player
Will Micro-Process Earn Samsung Electronics 2nd Place in Foundry Sector?
  • By Cho Jin-young
  • May 1, 2018, 13:56
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Samsung Electronics will begin mass production of next-generation APs by starting tentative mass production of products via a seven-nanometer (nm) extreme ultraviolet (EUV) process in the second half of this year.
Samsung Electronics will begin mass production of next-generation APs by starting tentative mass production of products via a seven-nanometer (nm) extreme ultraviolet (EUV) process in the second half of this year.

Samsung Electronics aims to post more than US$10 billion in sales and place second in the foundry business this year. The company faltered in the foundry business last year. However, there is a possibility that Samsung Electronics will form a two-frontrunner race with Taiwan TSMC if the company smoothly implements capacity expansion and the introduction of a micro-process.

According to industry sources on April 30, Samsung Electronics internally set more than US$10 billion, more than double US$4.6 billion in sales of last year, as its foundry division's sales goal for this year. “We will rank second by earning more than US$10 billion in the foundry business this year," Samsung Electronics said in a recent conference call about its earnings in the first quarter of 2018.

Samsung Electronics is confident about the foundry business because the company can include system semiconductors such as application processors (Aps) in sales as the foundry division broke away from the semiconductor business unit in May of last year. The semiconductor industry expects this volume to hit about US$5 billion more than last year's sales.

It is said that Samsung Electronics will begin mass production of next-generation APs including Samsung Electronics’ and Qualcomm’s 5G communication chips by starting tentative mass production of products via a seven-nanometer (nm) extreme ultraviolet (EUV) process in the second half of this year.

Samsung Electronics and Taiwan-based TSMC are the only two companies that announced that they would start seven-nm process foundry this year. Second-ranked Global Foundry and Intel are expected to apply the seven-nanometer process after next year. Samsung Electronics and TSMC are likely to become more dominant in the foundry market, particularly in the market of high value-added products for the time being.

An increase in demand for foundries related to Blockchains including virtual currencies is also good news to Samsung Electronics. "We booked a lot of orders related to virtual currency mining and expect the orders to take the lead in driving up earnings this year," a Samsung Electronics official said.

The industry also expects Samsung Electronics to enjoy a spike in sales if the company starts operating EUV-specialized facilities to be built with US$6 billion by 2020, next year. EUV can draw ultrafine circuits at once by using microscopic wavelengths as a light source. The Korean semiconductor giant plans to complete the development of the four-nm process in 2020 by using EUV equipment.

According to market researcher IC Insights, Samsung Electronics’s foundry sales rose four percent to US$4.6 billion last year. Last year, TSMC ranked first in the global foundry business by recording US$32.163 billion in sales, followed by US Global Foundry (US$6.06 billion) and Taiwan's UMC (US$4.898 billion). Combined sales of the top eight companies ran to US$55.13 billion which accounted for 88% of the total (US$62.31 billion).