Samsung Beefs Up Chip Foundry Business As It Looks To Challenge TSMC

(Bloomberg) -- Samsung Electronics Co.’s chip foundry business is adding production capacity and more advanced manufacturing techniques, aiming to make gains on market leader Taiwan Semiconductor Manufacturing Co.

The South Korean company said it will introduce so-called 2-nanometer production for mobile phone parts by 2025. Samsung will also increase output in Pyeongtaek, South Korea, and Taylor, Texas, to shore up the foundry division, which makes chips for customers on a contract basis, the company said at a presentation Tuesday in San Jose, California.

Samsung is looking to catch up with TSMC while also fending off a nascent challenge from Intel Corp., which is pushing into the foundry market. While the chip industry in general is suffering from sluggish demand for phone and personal computer parts, the artificial intelligence boom has spurred interest in advanced processors. 

Like other chipmakers, Samsung also is looking to geographically diversify its manufacturing footprint, which is heavily concentrated in East Asia. The company, which has operated a facility in Austin for about 20 years, expects to complete the new Taylor plant this year.

The Biden administration is looking to cultivate domestic chip production with roughly $50 billion in incentives. Officials have said they will give some of the funds to companies like Samsung that are based overseas but expanding on US soil. Europe and Japan are also setting aside government money to foster the industry in those locations.

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