Samsung will produce Qualcomm's X60 modem chip that connects smartphones and other devices to 5G wireless data network, Reuters reported on Feb. 18. The conclusion of the agreement will enable Samsung Electronics to narrow its gap with TSMC, the leader in the global foundry industry and a rival of Samsung Electronics, industry watchers say.
According to Reuters, Samsung will produce some of Qualcomm's 5-nm X60 modem chips. The X60 will be made through Samsung's 5-nm process and will be smaller and more energy efficient than its current chips.
Samsung Electronics, the world's second-largest chipmaker, was a latecomer in the global foundry industry, but has grown into the world's second largest foundry company based on its 7-nano technology. Although the technology gap with first-ranking TSMC was narrowed, it is still large. Although Samsung produces only some of the X60 chips, they can go into many mobile devices. Therefore, it can rev up Samsung’s foundry business, Reuters analyzed.
Samsung Electronics is reportedly planning to reinforce this technology to recover its market share against TSMC set to begin mass-producing 5-nm chips this year. Samsung Electronics has already succeeded in developing the world's first 3-nm semiconductor micro-fabrication technology. Compared to 5-nm products, 3-nm chips can reduce their sizes more than 35 percent and power consumption 50 percent, and enhance performance 30 percent. 3-nm semiconductors are expected to begin to roll out in 2022.
Thanks to these efforts, 3-nm chips’ market share is also on the rise. TrendForce said that Samsung Electronics' market share in the fourth of 2019 was 17.8 percentage points higher than 52.7 percent of TSMC. TSMC is also spurring 5-nm chip production. In January, TSMC executives said that they will start increasing 5-nm chip production in the first half and expect 5-nm chips to account for 10 percent of TSMC's sales in 2020.