Samsung ramps up foundry business as manufacturer of IBM's 7nm CPU

Global electronics giant Samsung Electronics' foundry plant is set to manufacture IBM's POWER10 Processor -- the company's first 7-nanometer (nm) central processing unit (CPU), the US-based tech mogul announced on August 17.

The POWER10 Processor combines Samsung's industry-leading semiconductor manufacturing technology with IBM's CPU designs. It will offer up to three times the efficiency of the previous POWER9 processor, having greater workload capacity and container density.

The production of IBM's next-generation CPU will begin during the second half of 2021 using the extreme ultraviolet (EUV) fabrication process.

Samsung’s foundry partnership with IBM is expected to nudge the Korean conglomerate closer to its bigger competitor -- Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading semiconductor foundry.

The Korean chipmaker already dominates the global memory chip market, but is widening its vision to the system semiconductor industry. Industry experts expect to see a shift on the system semiconductor landscape as Samsung expands its presence.

Currently, Samsung and TSMC are the only foundries that offer the 7nm process.

 



In recent years, Samsung Vice-Chairman Jay Y. Lee has repeatedly shown his dedication to the system semiconductor business. The largest global chipmaker was a latecomer to the foundry industry and did not have an extensive relationship with existing global fabless companies, compared to frontrunner TSMC.

Lee overcame such challenges by nurturing his own network. In 2016, Lee met with Ginni Rometty, the current executive chairman of IBM and the CEO at the time, to discuss technology including 5G and artificial intelligence (AI). Their meeting spurred expectations of potential cooperation between the two giants.

 

 

In 2018, Samsung developed EUV-based fabrication technology for 7nm before TSMC. The same year, IBM announced it would partner with the Korean tech heavyweight to produce next-generation microprocessors, high-performance computing systems, and cloud offerings. A year later, in 2019, Samsung was the industry’s first to ship off EUV-based 7nm products.

In April 2019, Lee said that the company would inject 133 trillion won ($112 billion) into its system semiconductor operations to become the world’s leading semiconductor business. Also earlier in May, Lee announced it would invest 10 trillion won ($8.4 billion) into the EUV foundry line located in Pyeongtaek, Gyeonggi Province.

Further, the company kicked off the mass production process for 5nm during the second quarter to speed up its goal of leading in the system semiconductor industry.

“We plan to boost our governance in the system semiconductor market by expanding applicable areas of micro-fabrication technology such as AI, mobile, HPC, and more,” said a source from Samsung Electronics.



Samsung accounted for 15.9% of the foundry market during the first quarter, increasing to 18.8% in the second quarter and narrowing the gap with frontrunner TSMC from 38.2% to 32.7% during the period.

Write to Su-bin Lee at lsb@hankyung.com