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Foundry business

Samsung’s Lee hastens to Netherlands in intense rivalry with TSMC

By Oct 11, 2020 (Gmt+09:00)

On Oct. 8, the same day Samsung Electronics Co. surprised markets with forecast-beating quarterly earnings estimates, its Vice Chairman Jay Y. Lee flew to the Netherlands to resume his overseas business travel after a five-month hiatus.

Picking the Netherlands as his first destination was puzzling to many industry watchers. The recent easing of restrictions on incoming business travel by Japan and Vietnam had stoked speculation that Lee would rush to visit Samsung’s R&D center in Vietnam, where the groundbreaking ceremony was canceled in February due to the coronavirus outbreak. In Japan, Samsung is trying to expand its footprint in the 5G network equipment market.

The Netherlands is home to ASML, the world’s only manufacturer of extreme ultraviolet (EUV) lithography machines. EUV scanners are one of the key fabrication equipment for 5 nanometer chipsets, for which Samsung is increasingly competing with Taiwan Semiconductor Manufacturing Co. (TSMC). 

Lee has visited the ASML headquarters to discuss stable supply of the EUV machines during his trip to the Netherlands.
Samsung Electronics Vice Chairman Jay Y. Lee visits ASML's headquarters in October 2020
Samsung Electronics Vice Chairman Jay Y. Lee visits ASML's headquarters in October 2020
As Samsung is seeking a bigger slice of the foundry market led by TSMC, both companies are also in intense competition for EUV scanners.

EUV scanners can draw more elaborate and detailed patterns on semiconductor wafers with shorter wavelengths than the conventional argon fluorine (ArF) technology. EUV also helps simplify the chip manufacturing process by cutting the number of photolithography processes required to create fine circuits.

ASML plans to ramp up EUV scanners production to 35 this year and to 50 next year, compared with last year’s shipment of 26 units. But TSMC has already placed big orders with ASML, as it is building new foundries in the US to take advantage of the US crackdown on China’s Huawei Technologies Co.

Samsung has acquired about 10 EUV scanners this year, costing over 200 billion won per unit, on top of last year’s purchase of 20 units. TSMC operates about 20 EUV machines and plans to buy an additional 60 EUV scanners by 2022.

Aiming to become the world’s largest foundry company by 2030, the Korean chip giant is known to be spending 10 trillion won ($8.6 billion) a year to develop chip foundry technology and purchase related equipment to close in on bigger rival TSMC.
Samsung’s Lee hastens to Netherlands in intense rivalry with TSMC
US restrictions on Chinese rival Huawei helped drive Samsung’s third-quarter operating profit to its highest point in two years at 12.3 trillion won, up nearly 60% from a year ago, the company said on Oct. 8.

Its third-quarter revenue is projected to have risen 6% to 66 trillion won from the same period a year earlier, poised to be its largest-ever quarterly sales.

Last week, TSMC posted record-high revenue for September for a second consecutive month. Its September revenue of 127.6 billion Taiwanese dollars (US$4.44 billion) represented a 3.8% rise on month and a 24.9% jump on year.

Its sales got a boost from robust shipments of 5 nm application processors to Apple Inc., its biggest client, although it has stopped taking new orders from Huawei in May.

Samsung recently beat TSMC to win orders from Qualcomm Technologies Inc. to manufacture 5G-capable mobile application processors designed for mid-range smartphones, the latest in a series of high-profile deals for its foundry business.

Write to Jung-dong Roh at

Yeonhee Kim edited this article.
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