Samsung Electronics sets up R&D entity in U.S. to focus on cutting-edge chips

[Photo by Lee Chung-woo]

South Korea’s tech giant Samsung Electronics Co. has established Samsung Federal Inc. (SFI), a research and development (R&D) entity, in the U.S., as it seeks semiconductor cooperation with U.S. national research institutions.

According to sources from the conglomerate circle on Sunday, Samsung Electronics recently revealed in its bi-annual report that its U.S. subsidiary, Samsung Semiconductor Inc. (SSI), established the new R&D entity in May.

SFI is located in the same building as SSI in San Jose, California. While the bi-annual report does not provide specific details about FSI’s responsibilities, the name suggests its involvement in projects related to the U.S. federal government, its agencies, and relevant businesses.

According to a job posting on its U.S. website, SFI is responsible for managing projects related to artificial intelligence (AI) and high-performance computing (HPC) business conducted by SSI for U.S. federal government agencies and contracted companies.

The entity aims to collaborate with these organizations to design groundbreaking systems based on Samsung’s world-class memory chip technologies to enhance computational capabilities and improve product performance and productivity. It also envisions developing innovative technologies to improve communication bandwidth and promote comprehensive system-based business.

SFI plans to hold a seminar at U.S. Armed Forces Communications and Electronics Association (AFCEA) in October. At the seminar, SFI will introduce defense equipment with enhanced connectivity and share examples of defense applications that utilize Samsung Electronics’ technologies.

Samsung Electronics’ decision to establish SFI in the U.S. reflects the expanding market for AI and HPC semiconductors and the growing interest from U.S. government agencies. The growing demand for AI and HPC semiconductors in various fields, including defense, has raised the need for an organization dedicated to research in this field.

Samsung Electronics has been actively investing in R&D, spending nearly 13.8 trillion won ($10.3 billion) in the first half of this year, despite facing losses of 8.94 trillion won in the semiconductor sector alone.

In the second quarter, its R&D investment amounted to 7.2 trillion won, up 15.2 percent from 6.25 trillion won in the same period last year, marking the largest-ever R&D investment.

The investment aims to maintain leadership in the high-performance memory market, including high-value items such as Double Data Rate 5 (DDR5) and High Bandwidth Memory (HBM), and to secure a dominant position in the rapidly growing AI and HPC semiconductor market, according to the company.

“The memory market needs are changing rapidly in various fields, including server and graphics applications, driven by the recent growth of cloud and AI,” said Samsung Electronics Executive Vice President Kim Jae-joon in a conference call last month. “As a leader in the memory industry, we are securing future technologies in various fields to meet these evolving market needs.”

The company’s active dealings with the U.S. federal government are also expected to have a positive impact on subsidy awards under the U.S. CHIPS and Science Act as the U.S. government is expected to consider the company’s relationship with government agencies, including the Department of Defense, in its subsidy review process.