In an effort to show its seriousness in the field of semiconductor outsourcing, Samsung has announced that it will be promoting its foundry business into a separate business unit. By separating the foundry division from its other electronics businesses, Samsung hopes to ease the fears of potential customers over possible conflicts of interest. As the foundry business was managed alongside other divisions, potential customers are concerned on whether or not other divisions of the South Korean tech giant can access the important patents and trade secrets of its foundry customers. Aside from allaying the fears of customers, elevating the foundry to a separate business ensures that the foundry can access the vast resources of Samsung Electronics, making the foundry more competitive against traditional competitors like TSMC and GlobalFoundries. It is also facing additional competition from Intel, which recently announced its return to the made-to-order chip business.
Aside from organizational changes, Samsung banks on improved production technologies and additional facilities to stay ahead of the competition. The foundry unit aims to release new technologies, which include the 8-nanometer and 7-nanometer process nodes, ahead of the competition. The company also plans to begin using a new technology named the Extreme Ultraviolet Lithography (EUL). The EUL technology allows Samsung to more efficiently manufacture semiconductors by reducing the steps involved in its production. The increased efficiency could drive down costs, which could then be passed on to its customers. Recently, Samsung was able to release the 10-nanometer process node ahead of its largest competitor TSMC, allowing the former to win the production contract for Qualcomm's Snapdragon 835.
Competition is very much present in the industry of semiconductor outsourcing. While Samsung maintains the lead in terms of process node size, it still deals with the technological prowess of its competitors TSMC and Intel. TSMC plans to release its own 7-nanometer technology next year with additional plans to reduce process size all the way down to 3-nanometer by the year 2022. TSMC also plans to spend $15.7 billion dollars to develop and build a production facility for the 3-nanometer and 2-nanometer process node technologies. Intel, for its part, is claiming that its 10-nanometer process will still be more advanced than what TSMC and Samsung currently offers. The company claims that its 10-nanometer process can incorporate twice the number of transistors compared to the similar offerings from competing foundries, making its process a full generation ahead of the competition.