Samsung chases after TSMC with new 7-nanometer foundry plant

The world’s top memory chip provider Samsung Electronics is set to break ground this week for a new foundry plant equipped with cutting-edge process technologies in Hwaseong, Gyeonggi Province, in a bid to catch up with Taiwan’s foundry business TMSC.

According to Samsung on Wednesday, the company is scheduled to hold a ceremony with around 100 local residents in Hwaseong on Friday to mark the ground-breaking of the new plant.

“The new plant is so far planned to be used largely for foundry production, but it can further be expanded for other productions later,” said a Samsung official. 

The plant will be filled with Extreme Ultraviolet lithography equipment from the Netherlands, which is emerging as a fresh breakthrough for nanometer process technologies.

With the EUV equipment, Samsung aims to start mass producing chips on 7-nanometer process next year at the earliest.

Samsung has been heavily investing in the foundry business since last year as part of efforts to diversify its profit sources that pivot on the memory business.

According to the industry, the total capital expenditure on the new EUV foundry plant is estimated to be around 6 trillion won. Some say that Samsung is planning to install at least 10 sets of EUV equipment that is worth about 150 billion won per unit.

TSMC, the current top foundry chipmaker in the world with about 55 percent market share, is ahead of Samsung in introduction of chips on 7-nm process. The company began trial mass production this year.

Samsung aims to expand its share in the foundry market from the current 7 percent by introducing the high-tech equipment.

GlobalFoundries and UMC are slightly ahead of Samsung with about 9 percent and 8 percent market share each.

The Korean chip giant has announced its technology roadmap that aims to develop 6-nm, 5-nm and 4-nm process technologies by 2020.

By Song Su-hyun (song@heraldcorp.com)