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Foundry deals

Samsung clinches 2nd deal to make Nvidia’s latest gaming chips

By Dec 17, 2020 (Gmt+09:00)

Nvidia's latest gaming chip, the RTX3080
Nvidia's latest gaming chip, the RTX3080

Samsung Electronics Co. will manufacture Nvidia Corp.’s latest gaming chips in the second such contract of the year from the US chipmaker, as the South Korean tech giant aims to expand its presence in the foundry business.

Samsung, the world’s second-largest foundry player, has clinched a deal to make Nvidia’s next-generation graphic processing unit (GPU), the Ampere GeForce RTX30 series, using its 8-nanometer process technology, according to the semiconductor industry on Dec. 17.

The contract is Samsung’s second order this year from the Santa Clara, California-based company, following a similar deal in September.

Samsung’s new foundry chief Choi Si-young
Samsung’s new foundry chief Choi Si-young
The value of the latest deal is unknown but the industry estimates the contract is worth hundreds of billions of won. Samsung is expected to make the gaming chips at its Hwaseong plant.

Analysts said the contract is significant in that Samsung won the deal amid market talk that Nvidia’s new GPU has been in tight supply due to unsatisfactory 8 nm process yield rates at its foundry partner Samsung, raising speculation that the US company may award the contract to Taiwan Semiconductor Manufacturing Co. (TSMC), the industry leader.

Industry officials said Nvidia has favored Samsung over TSMC in consideration of Samsung’s technology and the need for quick delivery of the chips. The RTX3080, priced at $699, the same as its previous model, has been in high demand because of its faster data processing speed.


Samsung has been stepping up efforts to enhance its presence in the global foundry market as specialty DRAM prices are expected to continue their rally into next year amid tight supply.

Earlier this month, Samsung announced a leadership change in its two key businesses, memory chips and foundry, as part of its bid to gain further ground in the global chipmaking sector.

Analysts said Samsung’s new foundry chief Choi Si-young will be asked to narrow the gap with TSMC in coming years.

Graphics by Jerry Lee
Graphics by Jerry Lee

According to market researcher TrendForce, Samsung’s foundry business is expected to post a record $14.05 billion in sales this year, up 17.9% from 2019, as the company is expanding its client base beyond Nvidia to Qualcomm Technologies Inc., Google, IBM, Cisco and China’s Baidu.

In October, Samsung signed a deal to make mobile chips for Qualcomm, using its 8 nm technology.


To advance its technological leadership, Samsung has introduced an extreme ultraviolet (EUV) lithography technology for 7 nm and finer products.

“Through the more advanced 4 nm processing node, we’ll further narrow the gap with TSMC,” said Samsung’s foundry chief Choi.

More recently, Samsung has purchased a giant lot of land in Austin, Texas, where its US chip plant is located, raising expectations that the company may expand its foundry business.

Samsung 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 its bigger rival TSMC.

Currently, Samsung operates seven foundry production lines in Korea and the US.

Graphics by Jerry Lee
Graphics by Jerry Lee

Samsung’s market share in the global foundry industry is estimated at 16.4% as of the fourth quarter of 2020, following TSMC’s 55.6, according to TrendForce.


Meanwhile, Korea’s SK Hynix Inc. said on Wednesday its foundry subsidiary in China, SK Hynix System IC Inc., has begun operations at its plant in Wuxi, Jiangsu Province.

The Wuxi plant makes CMOS image sensors and display driver ICs using 8-inch wafers for other fabless chipmakers.

The 8-inch wafer foundry is a niche market for SK Hynix as its rivals, including TSMC and Samsung, are focused on 12-inch wafers.

SK Hynix expects its Chinese foundry plant to make significant sales from 2021.

Write to Jeong-soo Hwang at

In-Soo Nam edited this article.

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