X

Samsung Takes Aim At TSMC With Plans For $10 Billion US Chip Fab

Samsung Galaxy S21 Review AM AH 06
Advertisement
Advertisement

Samsung is reportedly looking to compete more directly with long-time global leader TSMC in the chip space, starting with a new $10 billion fab plant in the US. That's based on a recent report from Bloomberg, detailing information shared by unnamed insider sources.

According to the source, Samsung plans to make its $10 billion investment in Austin, Texas. And the plant would focus primarily on producing smaller chip sizes, specifically the 3nm process node. Current chipsets leading the charge on the flagship smartphone front are utilizing the 5nm process.

If the source is accurate, Samsung plans to start construction on the plant this year and will start operating by 2023.

Advertisement

What does this $12 billion Samsung fab plan have to do with TSMC?

Now, if Samsung does move forward with plans to expand on its existing US fab presence, it could potentially use the new facility as a stepping stone toward competing more directly with TSMC. TSMC, conversely, currently serves as the world's leading foundry for outsourced chip fabrication. And it's recently started work on its own factory in the US, expected to cost $12 billion and to open by 2024.

The primary production at the US TSMC plant, however, would still reportedly be in 5nm chipsets. That could potentially pave the way for Samsung to swoop in and take some of its US business. TSMC will, if all goes according to plan, be pushing out 3nm chips from its Taiwan foundry by that point. But it wouldn't have any 3nm production in the US to compete directly with Samsung. That's if the rumors surrounding Samsung's plans are accurate.

So Samsung could potentially pick up market share from companies such as Intel, Qualcomm, and Apple more readily.

Sponsored Video

What else would the new plant do for Samsung?

Aside from potentially helping Samsung further its foundry goals, overall, the new plant would be useful in helping the Korean tech giant hold onto its current position in the market. As noted by the source, Samsung already has purchased land in Austin, Texas, next to its existing fab. But not only can that current fab only produce older process nodes. The plant isn't necessarily going to be able to keep up with the volume of production Samsung needs.

So a new facility would help bolster its productivity both in terms of competitiveness and in terms of meeting the demand for new chips.