Samsung Electronics starts work on sixth chip-making line, to take on bigger rival TSMC

Samsung flags are set up at the main entrance to the Berlin fair ground before the IFA consumer electronics fair in Berlin, August 28, 2012. REUTERS/Tobias Schwarz

Samsung Electronics Co Ltd has begun work on a sixth domestic contract chip production line, the company said on Thursday, to make logic chips for mobile phones and computers as it looks to cut reliance on the volatile memory chip sector.

The South Korean firm is taking on bigger rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) in the contract manufacturing business, where it competes for orders from customers such as Qualcomm Inc.

“This new production facility will expand Samsung’s manufacturing capabilities,” the company said in a statement on Thursday.

Samsung is targeting the second half of next year to start producing advanced 5-nanometre chips, using extreme ultraviolet (EUV) technology, on the added line in its plant in Pyeongtaek city, within a two-hour drive of the capital, Seoul.

“This is Samsung’s effort to narrow the gap with TSMC, as it still lags behind TSMC in the contract chip-making market,” said Park Sung-soon, an analyst at Cape Investment & Securities.

TSMC, the world’s biggest contract chipmaker, plans to build a $12 billion factory in the U.S. state of Arizona, it said last week.

Samsung now operates five foundry lines in South Korea and one in the United States.

Last year, Samsung said it planned to invest 133 trillion won ($107.97 billion) in non-memory chips through 2030, comprising 73 trillion won for domestic R&D and 60 trillion won for production infrastructure.

This month, President Moon Jae-in said he aimed to nurture the non-memory industry in his agenda to foster economic growth.

South Korea’s chip exports for the first 20 days of May soared 13.4%, while exports of mobile devices and cars collapsed 11.2% and 58.6% respectively, customs data showed.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.