Samsung Electronics TSMC Intel… 300 trillion won semiconductor war ignited

Taiwan TSMC announced an investment plan of 100 billion dollars (about 113 trillion won) to expand its semiconductor production capacity. It is determined to further widen the gap with Samsung Electronics, which announced that it will pour 133 trillion won into system semiconductors.

On the 1st, TSMC issued a statement and announced that it plans to invest $100 billion in semiconductor production capacity expansion over the next three years. Including the investment of 28 billion dollars (about 31 trillion won) this year announced in January, it is equivalent to investing 144 trillion won over four years. This is more than the 133 trillion won investment for the number one system semiconductor by 2030, announced by Samsung Electronics in January last year.

In this decision, the TSMC-style super gap will be revealed. TSMC is already overwhelmingly No. 1 in the foundry market, accounting for more than 50%. However, in microprocessing below 7 nanometers (nm, nano is 1 billionth), the gap is relatively small from the second-ranking Samsung Electronics. This means that additional investment is required to win more large-scale customers.

TSMC plans to build new factories in Taiwan and the United States. In particular, while focusing on expanding the 5nm line and developing 3nm, it is also trying to secure extreme ultraviolet (EUV) equipment, which is considered to be the core of the microprocessing process.

The fact that the IT industry is currently experiencing a severe shortage of semiconductors also contributed to the rapid progress of TSMC. As the phenomenon that started in the auto industry spreads to smartphones, PCs, and home appliances, virtually all fields were in the affected area. As supply shortages continue, customers are concerned about customer churn.

In a recent letter to the customer, TSMC said, “In the past 12 months, the utilization rate of all factories has exceeded 100%, but they are still unable to meet the demand.” TSMC’s main customers are Apple, Qualcomm, Nvidia, and AMD.

In addition, as Internet companies that have used conventional semiconductors such as Amazon and Facebook are starting to produce their own chips, the demand for foundries is increasing. They are also planning to design semiconductors that are best suited for their services and then entrust their production to foundries such as TSMC.

For this reason, Samsung Electronics, UMC, and Global Foundry are also expanding or planning to expand. Samsung Electronics is eager to invest in specific facilities this year, but the industry expects to invest at least 30 trillion won, the level of last year. IC Insights, a market research firm, predicted that this year’s semiconductor facility investment of Samsung Electronics was 28 billion dollars.

“It is true that the foundry business is not shortly after the start of the foundry business, and it is lacking in market share, production capacity, and number of customers,” said Kim Ki-nam, head of DS division of Samsung Electronics at a regular shareholders’ meeting in March. “We will prepare production capacity in a timely manner with efficient investments so that we can realize this, and through this, we will close the gap in competition.”

Competition for dominance in the world foundry market is getting fierce.

Earlier, the US integrated semiconductor company (IDM) Intel also announced that it would invest 20 billion dollars last month to build two new fabs (factory) in Arizona and enter the foundry market. Last month, Intel announced that it would build two factories in Arizona and strengthen its foundry business in earnest. It is a challenge to TSMC, which is the No. 1 foundry business, and Samsung Electronics, which is the second place.

In the industry, it is highly likely that the foundry market will be reorganized into the third power system of TSMC, Samsung Electronics and Intel. Compared to Samsung Electronics and TSMC, which compete for 3nm following 5nm in ultra-fine process technology, Intel is also struggling to produce 7nm. However, there are many observations that Intel, which combines large-scale capital and unprecedented support from the government, could close the gap sooner or later.

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