Samsung-TSMC foundry rivalry renewed in German market
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The top two global semiconductor foundries -- Samsung Electronics and Taiwan Semiconductor Manufacturing Co. -- are competing in the automotive semiconductor market in Germany, where major car manufacturers are located.
Despite the recent contraction of the automotive semiconductor market due to a decline in demand for electric vehicles, the two companies’ efforts to prepare for future market demand seem actively underway.
Samsung’s foundry division is set to hold a forum in Munich, Germany, in October, following two similar events in the US and Korea. At this year's forum, the Korean tech giant plans to share updates on its automotive chip process roadmap, according to sources.
Sources speculate that the company will likely announce the completion of the 14-nanometer embedded MRAM, or eMRAM, development, which is a next-generation core memory semiconductor for automotive applications.
At last year’s forum, Samsung announced its plans to prepare for mass production of 2-nm automotive solutions by 2026 and to introduce next-generation eMDRAM with an 8 nm process in 2026 and a 5 nm process in 2027.
As part of another effort, Samsung in 2020 relocated its European office from Frankfurt to Munich -- an automotive hub home to the headquarters of major car manufacturers, such as Audi and BMW.
The new office has been focusing on securing automotive chip orders by conducting open recruitment for foundry sales positions since the first half of this year.
"We will make automotive semiconductors a future growth engine. ... By 2027, we aim to increase the revenue share of non-mobile products in the foundry business to over 50 percent,” a Samsung Electronic official said.
Despite its efforts to secure both foundry orders and target the automotive memory chip market there, some experts called for a more active push from Samsung, citing TSMC’s aggressive investment.
TSMC, the world's largest foundry company, is expanding its influence by building an automotive chip production facility in Germany.
ESMC, a joint venture established by TSMC, Infineon Technologies, Robert Bosch and NXP Semiconductors, held a groundbreaking ceremony for a foundry plant in Dresden, on Aug. 20.
The plant is scheduled to start operations in 2027 and will manufacture automotive chips.
TSMC is expected to supply to automotive companies like BMW, and produces not only legacy products but also automotive chips using advanced processes below 7 nm, sources said.
“Samsung needs to invest as much as TSMC, but since it is not able to do that, it's a pretty unfortunate situation right now. If things go wrong, there’s a high possibility that it could fall from second place to third or fourth in the foundry sector,” a market expert, who asked for anonymity, said.
“This is a very critical time, and TSMC is being extremely aggressive to widen the gap (with Samsung) and secure absolute dominance. That is a somewhat concerning situation.”
Lee Jong-hwan, a system semiconductor engineering professor at Sangmyung University, suggested that Samsung could secure a foothold by “investing in or acquiring a German company” to raise its competitiveness in the foundry sector.
Experts predict that as the era of autonomous vehicles approaches, the demand for semiconductors will increase explosively, leading chip manufacturers to eagerly enter the automotive semiconductor market.
According to market research firm IDC, the automotive chip market is expected to grow from about $40 billion in 2020 to $88 billion by 2027. S&P projected that the value of semiconductors in a single vehicle will surge from $500 in 2020 to $1,400 by 2028.
By Jie Ye-eun(yeeun@heraldcorp.com)
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