Samsung’s prediction was correct… Declaration of investment of 133 trillion won in system semiconductor two years ago [위크+]

“So far, semiconductors have been referred to as the rice of the industry. However, in the era of the 4th industrial revolution based on data, I am confident that it is a small engine that moves a huge world, and is an essential engine to open our future.”

On April 30, 2019, Samsung Electronics Vice Chairman Lee Jae-yong said at the `System Semiconductor Vision Declaration Ceremony` held at Samsung Electronics’ Hwaseong Plant in the presence of President Moon Jae-in, saying, “We will win first in the system semiconductor field following memory.”

On that day, President Moon said, “By 2030, we will reach the world’s No. 1 system semiconductor foundry (consignment production) and 10% market share in the fabless (design specialization) field, and will become a comprehensive semiconductor powerhouse. It was a business vision. Prior to the system semiconductor vision declaration ceremony, Samsung Electronics announced’Semiconductor Vision 2030,’ which will invest a total of 133 trillion won, including 73 trillion won and 60 trillion won in production facilities, in research and development (R&D) by 2030, to achieve the global No. 1 in system semiconductors. . President Moon’s remarks acknowledged that Samsung’s new growth business is not at the level of individual companies, but at the national level.

System semiconductors, commonly referred to as’non-memory semiconductors’, play a role in operating systems of electronic devices such as computers, smartphones, and communication devices. Unlike memory semiconductors that simply store information, it is in charge of information processing such as computation and logic. It is easy to understand if you think that it plays the role of the brain (processor), mouth/ears (communication), and eyes (image sensor) of electronic devices. Unlike memory semiconductors, which are mass-produced small items, it is characterized by being produced in small quantities of various types. Due to such characteristics, a division of labor system has been established for each process, such as fabless, a company specializing in design, and foundry, which specializes only in manufacturing.

Memory accounts for only 35% of the global semiconductor market, and system semiconductors account for the remaining 65%. Typical system semiconductor companies are Intel (CPU), Qualcomm (mobile processor), and TSMC (Foundry). Korea is an absolute leader in the memory semiconductor sector, with global DRAM market share exceeding 70%, but in the system semiconductor sector, the market share is only 4% or so.

At the time of the announcement of’Semiconductor Vision 2030′, Samsung Electronics explained, “We have been leading the memory market and supporting the Korean economy, but in the future, we are looking for new opportunities and growth potential in the system semiconductor, a larger market.” ‘Semiconductor Vision 2030’ was a project of vice chairman Lee Jae-yong’s Seungeobu (better than father) project to create a success story for non-memory semiconductors following Samsung Electronics Chairman Lee Kun-hee, who led the memory semiconductor business.

Semiconductor Vision 2030 encompasses various plans. In order to strengthen technological competitiveness, it has hired 15,000 experts in system semiconductor R&D and manufacturing, and decided to increase production and invest in new lines by utilizing the new extreme ultraviolet (EUV) production line of Hwaseong Campus. It also contains measures to foster the domestic system semiconductor ecosystem, such as supporting design-related patents owned by Samsung Electronics, such as interface and analog intellectual property (IP), so that small and medium fablesses can shorten the product development period.

Samsung Electronics took a strong drive to achieve the semiconductor vision 2030. Of the 133 trillion won, it was planned to invest about 20 trillion won over the three years from 2019 to 2021, but the execution period was greatly accelerated to invest about 40 trillion won, which is twice the original plan by 2021. In fact, Samsung Electronics started operating the EUV-only Hwaseong `V1 line` in February last year, and three months later, Samsung Electronics actively invested in facilities by announcing a plan to build a foundry production facility for the production of EUV-based cutting-edge products at the Pyeongtaek plant.

The achievements also followed. In April of last year, one year after the announcement of the vision, Samsung Electronics announced that it achieved record-high sales in the system semiconductor sector. Of the quarterly sales of the semiconductor division of 17.64 trillion won, system semiconductor sales accounted for 4.5 trillion won, exceeding 25% of semiconductor sales for the first time ever.

It also speeded up the pursuit of TSMC, the world’s number one foundry. In the second quarter of last year, Samsung Electronics began mass production of high-tech process semiconductors with a circuit line width of 5 nm (nanometer, 1 millionth of a millimeter). It has officially declared that it will catch up with TSMC in advanced process technology.

It also showed off its technology by releasing new mobile application processors (AP) and CMO image sensors one after another. The Exynos 2100, launched by Samsung Electronics in January this year, is a representative example of showing off the same performance as the Qualcomm Snapdragon 888, an absolute powerhouse in mobile APs.

In the image sensor market, Sony, which is the world’s No. 1 leader in the ultra-fine process, is leading the world in technology, and based on this, it is evaluated that it deserves to surpass the world’s No. In fact, Samsung Electronics, overtaking Sony, released the industry’s first 180 million pixel image sensor’Isocell Bra HMX’ in 2019, and last year expanded its lineup of 0.7㎛ pixels to which ultra-fine processes were applied, showing a prominence in technology. have.

Market conditions are also good. Amid the rapid expansion of the market for high-performance computing (HPC), smartphones, and game consoles due to the increase in untact demand triggered by Corona 19, the global demand for automobiles with the latest electronic equipment (electronic equipment) technologies such as autonomous driving and eco-friendly vehicles has also increased. Foundry demand is increasing rapidly.

In the automobile industry, semiconductor demand is overwhelming enough to shut down the plant because there is no semiconductor in the automobile industry, such as the US Ford Motor Company’s decision to shut down three local plants in Brazil and the operation of the Louisville plant in Kentucky, USA. The situation is getting worse day by day, as global automakers such as General Motors of the United States (GM), as well as the Japanese and German governments issued SOS to the Taiwanese government to secure semiconductor chips for vehicles.

Recently, the semiconductor supply turmoil has shifted to the IT industry. In response to the overflowing orders of large customers around the world, Samsung Electronics is not able to supply the core semiconductor quantities for its strategic smartphones as planned.

In particular, as global fablesses such as Nvidia, Qualcomm, and AMD have recently increased the ratio of ultrafine semiconductors under 7nm, Samsung Electronics’ strengths are emerging. Samsung Electronics, together with TSMC, the strongest player in the global foundry market, is a company that can produce semiconductors under 7nm using extreme ultraviolet light exposure equipment (EUV).

As of last year, the market share of TSMC and Samsung Electronics, which ranked first in the global foundry market, was 54% and 17%, respectively, but the gap in market share was not large at 60% vs. 40% respectively for microprocessors under 10 nanometers. . The opportunity of Il-woo, genius to pursue TSMC, has come. Vice Chairman Lee Jae-yong, who announced an investment of 133 trillion won in system semiconductors two years ago, was accurate.

However, Samsung is in danger of wasting’Golden Time’, which is difficult to come back due to judicial risk. In order to save the opportunity, it is urgent to invest in trillions of bold foundries, but there is concern about disruption in decision making due to the absence of the total number.

In a conference call held on the 28th after the announcement of final results in the fourth quarter of last year, Samsung Electronics said, “We are positive about the possibility of realizing a meaningful M&A within three years. It is expected,” but has not yet come up with a concrete plan. The US media has repeatedly reported on the foundry expansion, including the expansion of the Austin, Texas plant and the construction of a new plant in Arizona, but repeating the answer, saying, “No specific decisions have been made.”

In the business world, the CEOs of each company will carry out their daily work without any problems, but they are concerned that Samsung’s investment will be disrupted, saying that it is difficult for professional managers to make important decisions such as investments.

A business official said, “In the case of a general interview, the interview time is limited to 10 minutes, so it is absurdly insufficient time to receive a report on an issue and to make a decision after exchanging opinions with the reporter.” However, it will not be easy to exchange opinions and communicate accurately with lawyers who do not understand advanced semiconductor processes.

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