Samsung Electronics sets 2027 target for 1.4 nanometer chips

Tech

Published: 04 Oct. 2022, 17:24 Updated: 05 Oct. 2022, 00:04

Samsung Electronics sets 2027 target for 1.4 nanometer chips

Choi Si-young, president and head of the foundry business at Samsung Electronics, explains the company's chip development plan during the annual Samsung Foundry Forum in Silicon Valley on Oct. 3. [SAMSUNG ELECTRONICS]

Samsung Electronics is targeting 2027 for the production of 1.4-nanometer chips and aims to triple production capacity for advanced chips by then.

The announcement of the goals, made by a company executive at the Samsung Foundry Forum in San Jose, California on Monday, came as the chipmaker faces intense competition and yield challenges and as all semiconductor companies struggle with overcapacity.

If the aggressive timeline is met, the pace could keep Samsung Electronics a tick ahead of TSMC in meeting key manufacturing benchmarks.

The Korean company started delivery of 3-nanometer chips in the first half of the year, while the Taiwan company will hit that mark later this year.

Both companies are set to deliver 2-nanometer chips in 2025.

Only Samsung Electronics has announced a schedule for the rollout of 1.4 nanometer chips.

“The technology development goal down to 1.4 nanometers and foundry platforms specialized for each application, together with a stable supply through consistent investments, are all part of Samsung’s strategies to secure customers’ trust and support their success,” said Choi Si-young, president and head of the foundry business at Samsung Electronics.

The chipmaker will also triple production capacity of advanced chips — chips that are sub-7 nanometers — by 2027.

Supply is far outpacing demand for chips, especially memory products, as people hold back on appliance and smartphone purchases.

Kyung Kye-hyun, chip CEO at Samsung Electronics, has emphasized that investment in the foundry business should not be correlated to the up and downs of the market, and that countercyclical thinking is needed.

"If we are to attract big clients, it is essential to have big capacity that suits their needs," Kyung said last month.

"In terms of investment, Samsung Electronics tended to spend more in good times and less in bad times," he said. "But as the business cycle moves at a faster pace, the smaller investment in bad times could translate into bad results in good times."

The manufacturer vowed to increase the sales proportion of chips used in vehicles and high performance computing (HPC) to over 50 percent of its total in an effort to reduce the over-reliance on chips used in mobile devices.

Demand for cars and advanced computing is less volatile than demand for electronic devices.

Over 50 percent of revenues from the foundry business of Samsung Electronics comes from chips used in mobile devices, according to a spokesperson.

"Samsung actively plans to target high-performance and low-power semiconductor markets such as HPC, automotive, 5G and the Internet of Things (IoT)," the company said in a statement.

Shares of Samsung Electronics jumped by 3.95 percent to close at 55,200 won ($38.74) on Tuesday. They are down 30 percent year to date.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]