Samsung Electronics Vice Chairman Lee Jae-yong (fourth from the left) visited the ASML headquarters in the Netherlands in October last year to look at EUV (extreme ultraviolet) exposure equipment. Provided by Samsung Electronics
‘Samsung Electronics 25 vs. TSMC 50.’ It is the number of possessing extreme ultraviolet (EUV) equipment, which is called the’game changer’ of the global semiconductor war. The number of EUV equipment that can efficiently manufacture ultra-small, low-power, and high-performance chips is a key indicator that determines the company’s semiconductor technology, financial power, and production capacity. This is the reason why global semiconductor companies are taking their life and death before securing EUV equipment.
According to the industry on the 15th, the number of EUV equipment secured by Samsung Electronics as of the end of last year was 25 units, which is half of the world’s No. 1 foundry (semiconductor contract manufacturing) company TSMC (45-50 units). Samsung Electronics distributed this equipment to the EUV-exclusive line in Hwaseong, Gyeonggi Province and the second plant in Pyeongtaek, Gyeonggi Province.
The price and installation cost of EUV equipment made in the Netherlands exceed 200 billion won per unit. This is why the number of EUV equipment possessed is regarded as a measure of the competitiveness of semiconductor companies. TSMC is known to have taken more than 60% of the total EUV equipment shipments (75 units) since 2018, when it began developing ultra-fine processes with a line width (transistor gate width) of 5 nm (nanometer, 1 nm = 1 billionth of a meter) or less. . The rest were shared by Samsung Electronics, Intel Micron, and SK Hynix.
The gap in the number of equipment holdings is highly likely to solidify due to the gap in market share. This is because if there is not enough EUV equipment, it is not possible to receive orders from customers asking for “Make the latest chips.” Samsung Electronics is currently blocked by the ‘20% wall’ of foundry market share.
Samsung Electronics is developing next-generation technology to overcome the inferiority. In the process of 3 nm or less, which will start mass production next year, it is planning to introduce the world’s first GAA technology that greatly enhances the power efficiency of chips.
It is also planning to focus on securing EUV equipment. Last year, it is reported that Samsung ordered about 20 more equipment. This is to respond to the rapid increase in demand for semiconductors produced in ultra-fine processes due to the proliferation of artificial intelligence (AI) and autonomous vehicles. A former president who oversees system semiconductors at Samsung Electronics said, “We need to hurry to build a front and rear ecosystem such as fabless and packaging based on Foundry to catch up with TSMC.”
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In October of last year, a photo of Samsung Electronics Vice Chairman Lee Jae-yong, wearing a blue dust jacket, sitting squatting down and looking through an electronic device became a hot topic. It was a look at’EUV (extreme ultraviolet) equipment’ at the headquarters of semiconductor equipment company ASML in Amsterdam, the Netherlands. Vice-Chairman Lee, who stopped by ASML on a business trip to Europe, asked, “Please supply’more, faster’ EU exposure equipment.”
○Customers prefer’pure foundry’
There is a reason that Vice-Chairman Lee himself came forward. Samsung Electronics announced’System Semiconductor Vision 2030′ in April 2019. The goal of becoming the No. 1 in this field by investing 133 trillion won by 2030 also included achieving the world’s No. 1 foundry (consignment production of semiconductors). However, it is evaluated that it is not easy for Samsung Electronics, which is struggling to keep the second place in the world, to cross the wall of Taiwan TSMC, which is the number one.
According to the market research firm Trend Force, the market share forecast for the first quarter of this year is TSMC 56% and Samsung Electronics 18%. Samsung Electronics has never exceeded the ‘20% share’ in the foundry market. TSMC is making facility investments that are three times that of Samsung’s every year to resist the pursuit of Samsung Electronics. This year, it plans to build a 3 nm (nanometer, 1 nm = 1 billionth of a meter) production line in Tainan, Taiwan, with an investment of 28 billion dollars (about 31 trillion won), the largest ever.
In addition, the foundry business of Samsung Electronics has inherent weaknesses. The system LSI division, which is in charge of designing and selling APs (application processors) for smartphones, is under one roof. Foundry customers such as Qualcomm and Nvidia have no choice but to prefer TSMC, which is a foundry company, instead of Samsung Electronics, a rival, because of concerns about information leakage.
It is not easy to separate the foundry business and spin it off. This is because it becomes impossible to invest the money earned in the memory semiconductor business in a foundry. In the end, it is necessary to attract customers with technology that overwhelms competitors, and EUV equipment is essential to implement this. “EUV equipment is expensive, but the supply is limited,” said Lee Jong-ho, head of the Seoul National University Semiconductor Research Institute. “Vice Chairman Lee’s visit to ASML is an example of Samsung’s strong commitment to the foundry business.”
○ Struggling fabless
In the fabless (semiconductor design) field, which plays a role in the system semiconductor industry along with the foundry, Korean companies are struggling and are realizing the high wall of their competitors.
Samsung Electronics’ System LSI Division, which develops and sells’Exynos’ products in the smartphone AP market, ranks 3~5. Qualcomm in the US in the premium chip market, and MediaTek in Taiwan in the mid- to low-end market, took about 50% of the AP market last year. The weaknesses of the system LSI division are its smartphone-oriented business structure and design manpower, which is more than 30% less than its competitors.
In the image sensor market, which is a semiconductor that plays the role of’eyes’ in digital devices, it is not easy to break down Sony’s stronghold in Japan. According to market research firm TSR, last year, Samsung Electronics’ image sensor market share was 19.8% and Sony recorded 45.1%. It narrowed the gap from 2019 (Sony 48.4%, Samsung 18.0%), but it still differs by more than 25 percentage points. Although Samsung Electronics is expanding its suppliers by developing the world’s first image sensor with a pixel size of 0.7 μm and products with 180 million pixels, it is not easy to catch up with Sony’s reputation and customer portfolio in a short period of time. In addition, among mid-sized fabless, Silicon Works ranked 19th in the world in terms of sales (as of 2019), and ranked 3rd in the display driving chip (DDI) market.
○ We must strive to build a semiconductor ecosystem
In the semiconductor industry, building an ecosystem of system semiconductors is an urgent task. It is said that the Korean system semiconductor industry will grow only when world-class companies emerge in each field, such as fabless, foundry, and post-processing (packaging). An industry insider said, “As it is rumored to be a’Gourmet Alley’ when delicious restaurants are gathered and a lot of customers visit, there should be several strong companies in each field in the system semiconductor industry.” . There are post-processing companies such as Nepes and SFA in Korea, but compared to the world’s No. 1 companies such as Taiwan’s ASE, the sales are about 1 in 40.
Samsung Electronics also realizes the need to build an ecosystem and is strengthening cooperation with front and rear companies. A representative example is the operation of the foundry ecosystem program’SAFE’, which includes EDA (electronic design automation) companies, design houses, and packaging companies since 2018. Kyeong Jong-min, an emeritus professor at KAIST’s Electrical and Electronic Engineering Department, emphasized, “The foundry ecosystem needs a lot of domestic companies to increase their skills together. The government should also actively work to build a system semiconductor ecosystem.”
Reporter Hwang Jung-soo/Lee Soo-bin [email protected]