Chiefs of Samsung Elec and Intel discuss cooperation amid Korea-U.S. chip alliance

The world’s two most powerful chipmakers Samsung Electronics Co. and U.S. Intel Corp. could seek partnership as their chiefs met in Seoul in the wake of South Korea-U.S. summit talks that agreed on enhanced cooperation in strategic industries like chips, batteries, bio, energy, and future mobility.

Patrick Gelsinger, chief executive of Intel, on his way home from attending the World Economic Forum in Davos, Switzerland, stopped at Seoul and visited Samsung Electronics’ headquarters in Seocho-dong, southern Seoul, on Sunday.

He held a round of talks with Jay Y. Lee, vice chairman of Samsung Electronics Co., Kyung Kye-hyun, head of device solutions (chips) at Samsung Electronics, Roh Tae-moon, head of mobile experience (smartphones), Lee Jung-bae, head of memory business, Choi Si-young, head of foundry, and Park Yong-jin, head of LSI development.

Lee and Gelsinger discussed cooperative opportunities in next-generation memory, fabless system chips, foundry, PC, and mobile.

Gelsinger last month had visited Asia to meet clients and supply partners in Taiwan, Japan, and India.

The two are most powerful in the chip market.

According to market research firm Gartner, Samsung Electronics last year narrowly exceeded Intel with its sales at $73.2 billion revenue versus $72.5 billion for the first time in three years.

Intel – which produces central processing units (CPUs), the brain of PCs – is a major customer of Samsung Electronics’ memory chips. Compatibility with CPUs is also essential in developing next-generation memory chips such as DDR5 for PCs and servers and LPDDR6 for mobile devices.

Intel is unrivalled in the CPU market. The two companies have been in close ties in developing next-generation memory products such as by testing compatibility between memory and CPUs. Samsung Electronics hopes to ensure leadership in next-generation chip market through alliance with Intel.

Samsung Electronics has recently developed the industry’s first Compute Express Link (CXL) DRAM technology, a new memory interface that can back performance for expansive and sophisticate processing like artificial intelligence, machine learning, and big data on less power. The technology has completed verification at Intel’s data center and server platform.

“We continue to work with industry companies such as Samsung to develop a robust memory ecosystem around CXL,” said Debendra Das Sharma, Intel Fellow and Director of I/O technology and Standards at Intel.

Samsung Electronics and Intel have been collaborating in finished products as well.

Samsung Electronics’ laptop series Galaxy Book Pro is loaded with Intel’s latest 12th Gen core processor and Intel’s Iris Xe graphic. The series has also acquired Intel Evo platform certification, Intel’s high performance and high efficiency mobile PC certification system.

Intel which gave up chip production has recently announced to initiate foundry operation to challenge foundry leaders Taiwan’s TSMC and Samsung Electronics.

In an online media briefing in March, Gelsinger announced that Intel plans to become a major provider of foundry capacity.

Samsung Electronics has been investing heavily in foundry with an aim to become world’s leader in system chip in 2030, but it still far lags behind TSMC that is responsible of half of chips on demand.

According to market researcher TrendForce, TSMC accounted for 52.1 percent of global foundry revenue in the fourth quarter ended December, far ahead of Samsung Electronics with 18.2 percent.

Intel has pledged $20 billion to build a foundry facility in Chandler, Arizona. It plans to begin construction in the end of this year for mass production in 2025.

Gelsinger has been demanding the U.S. government should provide subsidies only to American companies, upsetting Samsung who is initiating $17 billion foundry project in Texas.

How much of their differences could eased through the latest meeting and how far their partnership would go would be closely watched by the global industry.

Shares of Samsung Electronics were 1 percent lower at 67,000 won in early Monday session.

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