The data-driven nature of the world has resulted in skyrocketing consumer demand for high-end smartphones and laptops, which in turn has persuaded technology companies like Taiwan Semiconductor TSM, Intel INTC, Samsung SSNLF and GlobalFoundries to remain focused on innovation in chip processors.
Moreover, these devices are leading to rapid adoption of advanced process technologies particularly 7-nanometer (nm) technology that improvises silicon area and offers power efficiency owing to its smaller transistor feature sizes. Further, it scales down complex patterns on wafers.
Additionally, demand for 7nm technology is accelerating, courtesy of ongoing progress in the 5G deployment globally. Moreover, the upcoming 5G smartphones, AI and automation applications only add to the prospects of the technology.
Given this upbeat scenario, Samsung, Intel and Advanced Micro Devices AMD are leaving no stone unturned to strengthen their 7nm chipsets.
Will Samsung’s V1 Production Intensify Competition?
Samsung has begun mass production in its new semiconductor production line, V1, in Korea. Notably, the new facility utilizes extreme ultraviolet (EUV) lithography technology and produces chips based on the company’s indigenous advanced technologies like 7nm and below.
Notably, the company developed its 7nm process in 2017. It is known for improving performance by 20%, while reducing power consumption by 50%.
The company has commenced production of state-of-the-art mobile chips with 7nm and 6nm technologies at V1 facility line.
The latest move will help Samsung in expanding chip offerings, which in turn is likely to strengthen its presence in the worldwide chip market further.
Additionally, its robust investment in V1 line remains a major catalyst for capacity expansion. Notably, the company’s total investment in this facility is expected to reach $6 billion by the end of this year.
How Does this Impact AMD & Intel?
We believe Samsung’s 7nm endeavors are likely to intensify competition for AMD and Intel.
However, AMD enjoys competitive edge over its peers on the back of early introduction of 7nm chips. It has recently unveiled new Ryzen 4000 U-Series and H-Series mobile processors integrated with Radeon graphics capabilities to bolster performance of desktop and ultrathin laptops.
The latest laptop processors are developed on “Zen 2” core architecture utilizing 7nm process technology from Taiwan Semiconductor. Laptops integrated with these processors are likely to be available in the ongoing quarter across global OEM partners.
Apart from this, AMD’s Ryzen 3000 Series and Radeon RX 5700 Series are also based on 7nm technology.
We note that this Zacks Rank #3 (Hold) company’s Computing and Graphics segment generated revenues of $4.709 billion, up 14.2% year over year on the back of solid adoption of 7 nm based EPYC and Ryzen processors.
Meanwhile, Intel has been late when it comes to introduction of 7nm chips. The company’s 7nm process technology, which will offer two times scaling and approximately 20% increase in performance per watt with four times reduction in design rule complexity, is in development stage currently.
Nevertheless, this Zacks Rank #2 (Buy) company is making every effort to ramp up its 7nm chip production. The company’s first 7nm hardware will be a GPU integrated with high performance computing 7nm chips, which is expected to make debut in 2021.
What is Apple & Qualcomm Up to?
Notably, Apple AAPL and QUALCOMM QCOM are also leveraging 7nm technology in order to enhance their chip portfolio.
Apple, which carries a Zacks Rank #2, has developed A12 Bionic and A13 Bionic chips by utilizing Taiwan Semiconductor’s 7nm technology. In fact, A12 Bionic and A13 Bionic chips chips are integrated into iPhone XS Max and iPhone 11 Series, respectively.
Further, QUALCOMM, a Zacks Rank #2 stock, has developed Snapdragon 855 and Snapdragon 865 mobile platforms based on Taiwan Semiconductor’s 7nm technology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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