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Foundry competition

Samsung surprises foundry industry with plan for 2 nm chips

To attract major customers such as Google, Qualcomm and Apple as TSMC has yet to unveil 2 nm production plans

By Oct 10, 2021 (Gmt+09:00)

Samsung's foundry plant in South Korea (Courtesy of Samsung)
Samsung's foundry plant in South Korea (Courtesy of Samsung)

Samsung Electronics Co. caught its global semiconductor competitors off guard last week at the Samsung Foundry Forum 2021 with its announced plan to mass produce 2 nanometer chips from 2025.

Samsung had long not unveiled a detailed roadmap for semiconductor micro-process production largely because the imprisonment of its vice chairman Jay Y. Lee had delayed major investment decisions. Meanwhile, within the last year, bigger foundry rival Taiwan Semiconductor Manufacturing Co. (TSMC) and US tech giant Intel Corp. announced massive investment plans on the 3-nanometer process node.

Samsung had been predicted to join the race for the 3-nm process, but instead revealed a plan for 2mn chips that could help the company overtake TSMC sooner than expected.


TSMC is the global foundry leader with an estimated market share of 53-56%. Samsung, the second-largest foundry maker, had until recently occupied about 17%.

But the gap between the two companies has been widening recently. TSMC raised its market share to 58% in the second quarter from 55% in the first, while Samsung’s shares fell to 14% from 17% during the same period, according to market research firm Counterpoint Research.

While the Taiwanese company was preparing aggressive measures to expand the market, Samsung postponed investment plans due to the absence of its top decision-maker. Earlier this year, TSMC announced it will invest $100 billion in the foundry business over the next three years. It is set to start operations of a 5 nm factory in the US state of Arizona from 2024, while considering a 28 nm chip plant for automotive semiconductors in Japan. The leader was known to be discussing a production line in Germany.
Taiwan's TSMC is the world's top foundry player
Taiwan's TSMC is the world's top foundry player


TSMC’s bold plans came as the global foundry industry is rapidly growing with more and more companies seeking self-sufficiency in semiconductors.

Apple Inc. is slated to release a laptop equipped with the M1X, its own system chipsets, soon. In August, Tesla Inc. unveiled the D1 chip for artificial intelligence (AI). Google recently launched the Tensor, an application processor designed in-house for its Pixel phones. Carmakers, which have been suffering from the ongoing automotive chip shortage, are also seeking to develop the components by themselves.

The global foundry market is forecast to grow to $130.3 billion in 2027 from $83.7 billion this year, according to a tech industry researcher Omdia.

The bullish outlook prompted Intel to resume the foundry business, industry sources analyzed. In July, Intel unveiled plans to produce the 20A, chips using circuitry measured at 2 nm, in 2024 and 1.8 nm chips in 2025, although the industry was skeptical if the company will able to secure a stable yield, or ratio of properly working products of 2 nm or below.


Samsung’s plan for mass production of micro-process chip is likely to restructure the global foundry market. The company aims to apply its proprietary gate-all-around (GAA) transistor architecture, a key technology that improves electrostatic properties that translate into increased performance, reduced power and optimal chip design, according to Samsung.
Samsung's foundry business chief Choi Si-young on Oct. 7 unveiled a plan for mass production of 2 nm chips from 2025. (Courtesy of Samsung)
Samsung's foundry business chief Choi Si-young on Oct. 7 unveiled a plan for mass production of 2 nm chips from 2025. (Courtesy of Samsung)

That is expected to help Samsung attract major clients such as Google, Qualcomm and Apple that are seeking micro-process products since TSMC has yet to unveil its roadmap for 2 nm chip volume production, analysts said.

Samsung also said it will begin mass production of its first-generation 3 nm chips in the first half of next year, compared to July 2022 when TSMC is known to be manufacturing the products in large quantities.

The South Korean tech giant is predicted to expand its global foundry market share. Samsung’s share is forecast to reach up to 40% this year in the global market for chips of 10 nm or below, according to Taiwan-based market researcher TrendForce.

“Smartphone makers, in addition to server producers, are preferring micro-process chips with better performance and power efficiency,” said an industry source. “Increasing demand for chips of 10 nm or below will narrow the gap between Samsung and TSMC.”

Write to Sin-Young Park at

Jongwoo Cheon edited this article.

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