Second place Samsung Electronics observes 12 trillion won in non-memory investment this year… Bigger gap with TSMC
In the race for supremacy in the global foundry (consignment production of semiconductors), the’war of money’ is heating up.
As Taiwan’s TSMC, the world’s No. 1 foundry company, unveils its’previous’ facility investment plan this year, Samsung Electronics’ shoulders after TSMC are expected to become heavier.
According to the semiconductor industry on the 18th, Taiwan’s TSMC announced in its latest 4Q results announcement that this year’s capex will reach 25 billion to 28 billion dollars (about 27 to 31 trillion won).
This exceeded the $17.2 billion executed last year, as well as the estimated amount of facility investment predicted by experts this year ($19 billion to $20 billion).
In the background of TSMC pouring so much money into facility investment, TSMC’s fabless (semiconductor design company) customers Apple, AMD, and Nvidia in the ultra-fine process of 5 nanometers (nm, 1 nm = 1 billionth of a meter) or less, It is believed that orders from Qualcomm and others have increased significantly.
In fact, TSMC announced that it will use 80% of this year’s facility investment for ultra-fine front-end processes (3, 5, 7 nano).
It is expanding the purchase of extreme ultraviolet (EUV) equipment amounting to 170 billion to 200 billion won per unit to perform 5 nano or less processes.
This funding also includes the cost of establishing a 5-nano process foundry plant that TSMC will have to invest $12 billion in Arizona by 2029.
An official in the semiconductor industry said, “TSMC’s decision to invest in a record-breaking level this year reflects its willingness to gain a clear advantage in the technological competition with Samsung Electronics in advanced processes below 5 nanometers while preparing for the recent surge in foundry demand.” said.
The industry is dominant in the observation that TSMC’s investment expansion plan this year will include the amount of Intel, which is currently considering outsourcing of advanced processes.
Reuters reported recently, “Intel is planning to make’DG2′, a graphic chip (GPU) for personal PCs that will compete with Nvidia, and this chip will be made on the TSMC 7-nano process.”
Intel, which recently revealed that it is struggling with TSMC and Samsung Electronics as consignment production companies for semiconductors, has chosen TSMC, a specialized foundry company, rather than Samsung Electronics, which is the same integrated semiconductor company (IDM).
Reuters predicted that Intel will expand outsourcing to TSMC with the next-generation flagship central processing unit (CPU) starting with a graphics processing unit.
Samsung Electronics, the second-largest foundry company, is also expected to expand investment in system semiconductors this year in order to get one step closer to the goal of No. 1 system semiconductor in 2030.
However, it is difficult for Samsung Electronics to simultaneously expand its global No. 1 memory semiconductor and 2nd to 5th non-memory businesses.
In the third quarter of last year, Samsung Electronics predicted that the total facility investment in 2020 will be 35.2 trillion won, of which 28.9 trillion won will be invested in semiconductors.
However, the stock price reported that the investment in non-memory businesses such as foundries and system semiconductors was only 6 trillion won.
NH Investment & Securities predicted that Samsung Electronics will increase its facility investment in non-memory business this year to 12 trillion won, twice that of last year, which is less than half of TSMC’s.
An official from a stock market said, “The only place in the foundry market that has the financial power to compete with TSMC is Samsung Electronics, but Samsung Electronics, a general electronics company, has many places to invest, while TSMC can focus only on foundries.” It is expected that Samsung Electronics will not be able to easily fight until it achieves its No. 1 goal in the non-memory business.”
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