The Untold Story Of Samsung’s Growing Chip Business

CNBC

CNBC

17 min, 40 sec

Samsung, known for its consumer electronics, is also a leader in the semiconductor industry, focusing on memory chips and foundry services while expanding its manufacturing presence in the U.S.

Summary

  • Samsung is a ubiquitous brand, leading in memory chips and rapidly growing in foundry services, with a goal to surpass TSMC.
  • Despite a slump in chip demand, Samsung is continuing its expansion, including a $17 billion fab in Taylor, Texas.
  • The U.S. Chips Act incentivizes domestic manufacturing, aligning with Samsung's U.S. growth and geopolitical concerns around chip production in Asia.
  • Samsung's history is marked by diversification and innovation, but also by legal battles and scandals involving its founding Lee family.
  • The company's future includes tripling leading-edge manufacturing capacity and creating advanced chips as small as 1.4 nanometers by 2027.

Chapter 1

Samsung's Ubiquity and Semiconductor Dominance

0:00 - 51 sec

Samsung is not only a major player in consumer electronics but also dominates the semiconductor industry with a substantial market share in memory chips and advanced logic chips.

Samsung is not only a major player in consumer electronics but also dominates the semiconductor industry with a substantial market share in memory chips and advanced logic chips.

  • Samsung's products range from Android phones to unconventional displays, with a presence in over 100 million U.S. households.
  • The company leads the memory chip market for three decades, controlling nearly half the market share in DRAM and NAND.
  • It's the world's second-biggest maker of advanced logic chips, used in a variety of technologies including Tesla's and smartphones.

Chapter 2

Samsung's Strategic Shift Amid Market Challenges

0:54 - 1 min, 13 sec

Facing a decline in memory chip prices, Samsung cut production but doubled down on foundry services, planning extensive investments in South Korea and the U.S.

Facing a decline in memory chip prices, Samsung cut production but doubled down on foundry services, planning extensive investments in South Korea and the U.S.

  • Samsung ended 2022 with significant revenue but faced a 95% profit drop in Q1 2023, leading to a cut in memory chip production.
  • The company is focusing on foundry services, investing in a $228 billion cluster of fabs in South Korea and a $17 billion fab in Taylor, Texas.
  • Samsung aims to become the leading foundry service provider, not settling for the current second position behind TSMC.

Chapter 3

Samsung's U.S. Expansion and Historical Growth

2:36 - 2 min, 4 sec

Samsung's history reflects its growth from a trading company to a tech giant, with an increasing focus on semiconductor production in the U.S.

Samsung's history reflects its growth from a trading company to a tech giant, with an increasing focus on semiconductor production in the U.S.

  • Founded in 1938, Samsung diversified into various industries and now is a leading electronics manufacturer.
  • Samsung Semiconductor was established in 1980, and the company became known for its memory chips and smartphones.
  • With a strong presence in South Korea, Samsung is now expanding in the U.S., including a new fab in Taylor, Texas.

Chapter 4

Samsung's Advanced Chip Technology and U.S. Manufacturing

4:47 - 4 min, 30 sec

Samsung is advancing its chip technology while growing its manufacturing presence in the U.S., driven by customer demand and geopolitical considerations.

Samsung is advancing its chip technology while growing its manufacturing presence in the U.S., driven by customer demand and geopolitical considerations.

  • Samsung's chip technology advancements are on par with mid-size cars in cost, showcasing their value and complexity.
  • The company's U.S. operations include memory chip production, with a strong emphasis on Texas for future growth.
  • Customer demand and geopolitical risks are motivating factors for Samsung's increased U.S. manufacturing.

Chapter 5

Impact of the U.S. Chips Act and Samsung's Foundry Focus

9:59 - 2 min, 46 sec

The U.S. Chips Act provides financial incentives for domestic chip production, aligning with Samsung's strategic shift toward foundry services and leading-edge chip manufacturing.

The U.S. Chips Act provides financial incentives for domestic chip production, aligning with Samsung's strategic shift toward foundry services and leading-edge chip manufacturing.

  • Samsung is benefiting from the Chips Act to offset higher U.S. production costs compared to Asia.
  • The company is focusing on foundry services and advanced chip manufacturing, including plans for 2 nm and 1.4 nm chips.
  • Samsung's growth includes significant investment in equipment and a commitment to sustainability and resource management.

Chapter 6

Challenges and Controversies Surrounding Samsung's Growth

13:10 - 1 min, 28 sec

Samsung's aggressive expansion faces challenges such as resource management and power reliability, while also contending with legal issues and complex relationships with competitors like Apple.

Samsung's aggressive expansion faces challenges such as resource management and power reliability, while also contending with legal issues and complex relationships with competitors like Apple.

  • Samsung's expansion raises concerns about water usage and power reliability, with Texas' independent grid posing unique challenges.
  • Legal battles and scandals, including the Lee family's corruption charges, have affected the company's reputation.
  • Despite a complex relationship with Apple as both a supplier and competitor, Samsung continues its growth trajectory.

Chapter 7

Samsung's Future Ambitions in Chip Manufacturing

14:41 - 2 min, 44 sec

Samsung aims to dominate the semiconductor industry with ambitious goals for advanced chip manufacturing and a strategic pivot toward custom chips for emerging technologies.

Samsung aims to dominate the semiconductor industry with ambitious goals for advanced chip manufacturing and a strategic pivot toward custom chips for emerging technologies.

  • Samsung's roadmap includes tripling leading-edge manufacturing capacity and producing chips as advanced as 1.4 nm.
  • The company's focus on foundry services caters to the rise of AI and large language models, competing with firms like Nvidia.
  • Despite these ambitions, Samsung is committed to maintaining production of legacy chips, essential for various industries.

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