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“In the advanced (high-tech) process, we are competing with TSMC by forming’Yanggang Gudo’.”
On the 16th, Samsung Electronics released its semiconductor business strategy this year through the public announcement of the’Announcement of Convocation of Shareholders’ Meeting. In this data, the company evaluated the competitiveness of its foundry (semiconductor consignment production) business as’TSMC and Yanggang Structure’. The line width (the width of the transistor gate) is 7nm (nanometer, 1 billionth of a meter) or less, which means that the process is’in the advanced process’, but it is confident that it will not be pushed down by the world’s number one company. It was an expression.
“We will not miss large customers (Qualcomm, Nvidia, etc.) even in the 3nm process.”
In fact, the gap between TSMC and Samsung Electronics is not small in terms of the global foundry market share. According to Trend Force, a semiconductor specialized market research company, TSMC’s market share in the fourth quarter of last year was 55.6% and Samsung Electronics was 16.4%. This is a number that includes all processes from the latest 5nm to 90nm or more’legacy (traditional) processes’.
EUV exposure equipment independently produced by ASML. Samsung Electronics Vice Chairman Lee Jae-yong visited the ASML headquarters last year to look at EUV equipment. yunhap news
The gap is greatly narrowed when only looking at advanced processes, which are called ‘advanced processes’ in the industry. Trend Force predicted in a report in November that “the market share of 10nm or less advanced processes in 2021 will be 60% of TSMC and 40% of Samsung Electronics.”
Samsung Electronics’ confidence is analyzed as a result of’technology’,’strong foundry demand’, and’large-scale investment’. In the public announcement, Samsung Electronics explained, “We supplied 5nm 1st generation products in the fourth quarter of 2020, and plan to mass-produce 5nm 2nd and 3rd generation process products at the same time in the second half of this year.” Considering that TSMC is currently focusing on the 5nm process, it is evaluated that it is competing on an equal level of technology.
He also emphasized that “we will lead the future technology with the development of GAA technology.” GAA (Gate-All-Around) is a new technology that will be applied from the ‘3nm process’ that Samsung Electronics plans to launch in earnest next year. Samsung Electronics said, “We will lay the foundation for mid- to long-term business expansion by linking the development of GAA technology to the next product orders from large customers.” It is evaluated that they have expressed their will not to miss out on current large-scale customers such as Qualcomm and Nvidia based on’technology’.
Taiwan Hsinchu TSMC headquarters logo. Photo = REUTERS
= Early operation of Pyeongtaek state-of-the-art foundry line… Leading’during the first half’
The market situation is also positive. Currently, foundry companies are in a situation where they cannot accept orders due to insufficient production facilities due to incoming orders. Samsung Electronics also said, “Competition for market share of smartphone makers, demand for (semiconductor) safety stock acquisition, and competition for demand for finished product companies are fabless (semiconductor design company, outsourced production to foundry companies because there is no factory). It is leading to competition,” he explained, “the strong demand trend continues.”
At present, Samsung Electronics’ foundry division is known to be in a’full capacity’ situation so that it cannot handle the volume of the system LSI division under one roof.
Samsung Electronics’ semiconductor executives are inspecting the EUV line at Pyeongtaek Plant 2, which is currently under construction. Provided by Samsung Electronics
In order to resolve the’short supply’ situation, Samsung Electronics plans to accelerate the operation of the latest EUV (extreme ultraviolet) foundry line being built in Pyeongtaek Plant 2 (P2) in Gyeonggi Province to the first half of this year. The Pyeongtaek EUV line is so important that Lee Jae-yong, vice chairman of Samsung Electronics, visited twice last year and early this year.
In May of last year, Samsung Electronics announced the fact that it will invest 10 trillion won and announced that it will start operating in earnest from the second half of 2021. In this disclosure, he emphasized, “We will expand production capacity by ramping up the EUV exclusive line (expanding production) and early operation of the new Pyeongtaek line.”
Samsung Electronics also raises the price of the 8-inch foundry line
It also revealed strategies related to the legacy (traditional) foundry process. Samsung Electronics’ Foundry Division will expand its applications from’Semiconductors for Smartphones’ to’High Performance Computing (HPC), Consumers, Networks, Automotive Electronics (Electronic Equipment), etc.’ We will also diversify our process portfolio, such as DDI) and power semiconductors (PMIC).”
It is also actively working on improving line operation efficiency. In particular, it plans to focus on expanding the business not only in processes that mainly use 12-inch (300mm) wafers, but also in the 8-inch (200mm) foundry line. The 8-inch line, which was widely used until 2010, mainly produces automotive MCUs (microcontrol units), DDI, and power semiconductors. Although it was evaluated as’old fashioned’, demand is increasing due to the recent shortage of semiconductors for vehicles.
Samsung Electronics announced, “We will focus on expanding our business by promoting’selling prices’ and’selecting and focusing on high-profit products’ in the situation of short supply compared to 8-inch demand.” This year, Taiwanese VIS and UMC have also raised the 8-inch price by 15-20%.
The weakness of the Samsung Electronics foundry is’yield’. The yield is the ratio of good products to the total product, and the low yield means that many defective products are produced. In the industry, an analysis that “Samsung Electronics’ 5nm process yield is lower than that of TSMC” came out. Recognizing this, Samsung Electronics emphasized that “we are focusing on Ramp-up.”
15% growth in DRAM demand
Samsung Electronics’ memory division, which is in charge of DRAM and NAND flash, explained that “the global DRAM market will grow 15% this year, compared to the previous year,” citing data from market research company IDC in December of last year. The reason is that demand for smartphones will recover from the economic recovery and demand for servers in data centers will increase.
This year, Samsung Electronics’ memory division is working hard on’Dram mass production through EUV (extreme ultraviolet) exposure equipment.’ EUV exposure equipment is exclusively produced by ASML in the Netherlands and is used in the’exposure process’ that engraves circuits on semiconductor wafers. It is more efficient than the existing ArF equipment, so even at a price of 200 billion won per unit, it is’cannot sell because of lack of goods’.
It is mainly used for foundry processes below 7nm, but Samsung Electronics introduced EUV equipment for DRAM production last year for the first time in the industry. This is because’process efficiency’ can be dramatically improved by reducing the work of engraving circuits. Samsung Electronics has already successfully applied EUV equipment to mass production of the first-generation 10nm (1x) DRAM last year. This year, it plans to mass-produce the 4th generation 10nm (1a) DRAM in the EUV line. Samsung Electronics said, “We plan to lead the market leadership by enhancing cost competitiveness and enhancing performance, characteristics, and quality maturity,” and said, “We are continuing to strengthen competitiveness in new growth markets in the post-corona period such as AI and Edge Computing.” .
Samsung Electronics’ Exynos Auto Semiconductor. Supplied to Audi, Germany. yunhap news
In NAND flash, it is known that it is expected to enter the premium market by increasing the proportion of 128-layer (6th generation) V-NAND and mounting it on a high-performance SSD (data storage device).
There was no mention of the 7th generation V NAND (over 170 layers). Recently, in the NAND flash industry, there is a competition to increase product performance by stacking high layers. Samsung Electronics mass-produced the 6th generation V-NAND for the first time in the world, but in the 7th generation, it is being pushed by competitors in terms of the speed of technology development. At the end of last year, Micron announced the mass production of 176-layer NAND, and SK Hynix announced the development of 176-layer 4D NAND. Recently, Kioxia of Japan and Western Digital of the United States announced that they jointly developed “162-layer NAND.”
Of course, the common opinion of the semiconductor industry is that’yield’ is more important than the number of stacked layers. In terms of yield and production efficiency, the evaluation that Samsung Electronics is ahead of the’unmatched’ level is dominant. Even during the NAND recession of 2019-2020, Samsung Electronics was the only NAND maker in the world to escape the’deficit’.
Strengthening’chip joint development’ business with Facebook and Tesla
The System LSI Division, which develops and sells the AP’Exynos’ for smartphones and the image sensor’Isocell’, has declared a’new business expansion’. Representative products are’Automobile SoC (System on Chip)’ and’Custom SoC’.
Samsung Electronics’ System LSI Division has a track record of developing an electronic AP’Exynos Auto’ and supplying it to Audi. As the demand for semiconductors has increased due to the recent development of automobile technology such as autonomous vehicles, it is evaluated that it has shown a will to strengthen the competitiveness of’electronic SoC’.
‘Expanding custom SoC’ is also considered a noteworthy topic. It represents the intention to expand services that help design chips by receiving requests from’external customers’ such as Google, Facebook, and Tesla. These companies are striving to develop’own chips’ in fields related to AI, etc. to escape the influence of traditional semiconductor companies. It is known that it is actually trying to develop its own chip in cooperation with Samsung Electronics.
It also expressed the meaning of “we will prepare steadily” for “securing the foundry”, which is the homework of’fabless’ without production facilities. The System LSI division is classified as’fabless’ because it focuses only on design and sales, and production is mainly entrusted to the foundry division of Samsung Electronics. Recently, as orders from the foundry division of Samsung Electronics are pouring in, the system LSI division is also unable to make chips for’as much as desired’ for smartphone APs and image sensors. Accordingly, it is known that the System LSI Division is entrusting the production of some products such as image sensors to Taiwan’s UMC. Samsung Electronics explained that the System LSI Division “is steadily preparing for 2021 with the expansion of foundry suppliers.”
Reporter Hwang Jeong-soo [email protected]