Samsung Shares Ambitious Chip Production Targets Citing Demand Tailwinds

  • Samsung Electronics Co, Ltd (OTC: SSNLF) looks to expand its advanced chips production capacity by more than 3X by 2027 to meet strong demand despite global economic headwinds.

  • Samsung targets the commercialization of advanced 2-nm technology chips by 2025 and 1.4-nm chips by 2027, set for high-performance computing and artificial intelligence applications.

  • Samsung acknowledged some progress (in raising prices) this year, reflecting costs. Samsung proposed to make the new orders after 2-3 years, leading to a minimal direct impact from the current atmosphere, Reuters reports.

  • Samsung began commercializing 3-nm chips in June.

  • The report cited analysts that Samsung had pushed advanced technology too quickly to compete with Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM) but had suffered from having less experience with the long-term client cooperation needed in contract manufacturing.

  • Samsung co-CEO Kyung Kye-Hyun acknowledged its foundry business had lagged behind TSMC's development schedule and performance in 5- and 4-nm chips. Still, customers were excited for the second version of 3-nm chips, likely for manufacture in 2024.

  • He noted that demand for advanced 5-nm and more delicate chips rapidly increased despite current inflationary pressures due to the long-term expansion of high-performance computing, artificial intelligence, 5G and 6G connectivity, and automotive applications.

  • "U.S. customers are especially interested in production in the United States, for supply chain stability," Kang said. "Our Taylor site is very large... It's a good site for expansion," he added.

  • Samsung is building chip production in Taylor, Texas, for operations starting in 2024.

  • SoftBank Group Corp (OTC: SFTBY) (OTC: SFTBF) founder, Chair, and CEO Masayoshi Son reportedly explored a potential partnership between Arm Ltd and Samsung.

  • Price Action: TSM shares traded higher by 2.22% at $70.79 in the premarket on the last check Tuesday.

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