Samsung Electronics Begins World’s First 3nm Chip Production Amid Push for New Foundry Customers

Samsung Electronics Co Ltd said on Thursday it has begun mass producing chips with advanced 3nm technology, the first to do so globally, as it seeks new clients to catch far bigger rival TSMC in contract chip manufacturing.

Compared with conventional 5nm chips, the newly developed first-gen 3nm process can reduce power consumption by up to 45 percent, improve performance by 23 percent, and reduce area by 16 percent, Samsung said in a statement.

The South Korean firm did not name clients for its latest foundry technology, which supplies made-to-order chips like mobile processors and high-performance computing chips, and analysts said Samsung itself and Chinese companies are expected to be among the initial customers.

Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54 percent of the global market for contract production of chips, used by firms such as Apple and Qualcomm which don't have their own semiconductor facilities.

Samsung, a distant second with a 16.3 percent market share, according to data provider TrendForce, announced a 171 trillion (roughly Rs. 10,39,500 crore) won investment plan last year to overtake TSMC as the world's top logic chipmaker by 2030.

"We will continue active innovation in competitive technology development," said Siyoung Choi, Head of Foundry Business at Samsung.

Samsung Co-CEO Kyung Kye-hyun said earlier this year its foundry business would look for new clients in China, where it expects high market growth, as companies from automakers to appliance goods manufacturers rush to secure capacity to address persistent global chip shortages.

While Samsung is the first to production with 3nm chip production, TSMC is planning 2nm volume production in 2025.

Samsung is the market leader in memory chips, but it had been outspent by frontrunner TSMC in the more diverse foundry business, making it difficult to compete, analysts said.

"Non-memory is different, there's too much variety," said Kim Yang-jae, analyst at Daol Investment & Securities.