Global chipmakers spur investments while Samsung suffers

While production of high-computing chips at Samsung Electronics, the world’s top memory chip business, is expected to suffer in the wake of a trade dispute between South Korea and Japan, other global chipmakers are aggressively expanding investments to spur production, according to the industry on Monday.

TSMC, the world’s third-biggest chipmaker based in Taiwan, has announced a plan to hire more than 3,000 engineers by the end of this year, along with plans to invest in new extreme ultraviolet technology-based manufacturing facilities in the southern and northern parts of the country in order to ramp up production of chips on 3-nanometer, 5-nanometer and 7-nanometer processes.

The Taiwanese company is planning to spend a total of $11 billion on construction of the new facilities.

Samsung has been in a neck-and-neck race with TSMC in advancing the progress of EUV-based production.

The Korean semiconductor giant has tried to get ahead of the Taiwanese rival by announcing completion of the 5-nanometer EUV process in April and mass commercialization of chips on 7-nanometer earlier than TSMC.

However, as the Japanese government is highly likely to remove Korea this week from its whitelist of export countries, Samsung is expected to suffer from limited imports of high-tech chipmaking materials like photoresists from Japan.

Samsung has a plan to construct another EUV line in Pyeongtaek, Gyeonggi Province, after completing the first one in Hwaseong in the next few months.

“We need to consider the timing of the new EUV line investment, considering the ongoing situation,” said a high-ranking official at Samsung.

Imports of Japan-made photoresists, which are essential for the EUV-based production of chips, are key to Samsung’s goal of retaining the global top position in the memory, fabless and foundry sectors by 2030.

If Samsung’s EUV production sputters due to the tight supply of photoresists, the global semiconductor industry landscape could see a change, according to industry experts. 

Including fabless and foundry players, US-based Intel topped the entire semiconductor market in the first quarter of 2019 in terms of revenue, followed by Samsung and TSMC in that order, according to data from IC Insights.

The US company regained the No. 1 position from Samsung, which had been No. 1 for two straight years.

Samsung has suffered memory price falls for the past six months and raised 30 trillion won ($25 billion) in estimated sales as of June, while Intel posted $32.6 billion in sales during the same period of this year, raising expectations that the US chipmaker would maintain the top position throughout the year.

“Foreign chipmakers are apparently expanding investments in terms of advancing facilities and developing technologies, while Samsung is stranded in a diplomatic spat,” said an industry official. “If the situation is protracted, TSMC could catch up with Samsung in overall revenue.”

Meanwhile, Toshiba Memory is seeking to secure funds for new investments in the fields of chips for artificial intelligence and the fifth-generation telecom network by planning to go public on the stock market.

The Japanese company recently rebranded itself as Kioxia and announced the IPO plan. It is the second-biggest player in the global NAND Flash market, after Samsung.

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