Samsung Elec may advance start of leading-edge foundry line to July

Samsung Electronics Co., a leading global foundry chipmaker, may begin operation of its leading-edge chip fabrication line earlier than scheduled to help ease worsening chip shortages.

The South Korean tech giant is also considering a double-digit increase in foundry service charges for chips at its 8-inch wafer line, reflecting growing demand.

According to industry sources on Feb. 21, Samsung is expected to put into operation an extreme ultraviolet (EUV) fab line at its Pyeongtaek plant 2 in July at the earliest.

The EUV line, currently under construction, was scheduled to begin operating later this year.

But in the documents Samsung made public on Feb. 16 in preparation for its annual shareholders’ meeting, the company said it plans to “expand production capacity through the ramp-up of EUV and other facilities at Pyeongtaek earlier than scheduled.”

The EUV fab at Pyeongtaek is a state-of-the-art chip process facility, for which Samsung Vice Chairman Jay Y. Lee said last May the company will spend 10 trillion won ($9 billion) to enhance its presence in the global foundry market.

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Samsung’s move to advance the operation of its latest fab line using the EUV lithography technology comes as the global chip market is reeling from worsening shortages, disrupting the global IT supply chain.

A worldwide semiconductor shortage, which started with automotive chips, has been spreading to equipment makers and backend companies that assemble key components as situations have exacerbated due to the recent fire at a Taiwanese chip plant and the earthquake in Japan.

However, outsourcing isn’t easy, as foundries, which make semiconductors for fabless firms, have already boosted their operation rates close to 100% in recent months.

Analysts expect chip production capacity to fall short of demand until the end of the year at least.

Samsung said on Sunday it will also expand the applications of its legacy foundry processes from smartphone semiconductors to high-performance computing (HPC), consumer and automotive chips to make the most of existing facilities.

As part of such efforts, Samsung plans to run its 8-inch wafer line at full capacity to make chips for micro control units (MCUs) and display driver ICs (DDICs) in addition to low-tech analog semiconductors.

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The company said it is also considering raising 8-inch wafer foundry service prices in line with growing demand.

“Supply is well below demand for chips at the 8-inch line. We plan to raise prices for such products,” said a company official.

Industry officials said Samsung will likely raise such prices by 10-15%. Foundry market leader Taiwan Semiconductor Manufacturing Co. (TSMC) and other Taiwan-based foundries recently raised prices by 15-20%.

Samsung’s LSI business, which makes communication chips and image sensors, also said it is widening its business areas to develop specialty chips such as a system on a chip (SoC) and custom SoCs.

Samsung, which supplied its automotive processor, Exynos Auto, to German automaker Audi AG, is seeking to partner with Tesla Inc. and Facebook Inc. to jointly develop custom SoCs.

Non-automobile tech companies, including Facebook, are trying to develop artificial intelligence-related semiconductors with existing chipmakers and outsource production to foundries.

Write to Jeong-Soo Hwang at hjs@hankyung.com
In-Soo Nam edited this article.