Samsung unveils 3 nanometre foundry technology

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

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

Taiwan Semiconductor Manufacturing Co TSMC is the world's most advanced foundry chipmaker, which controls about 54% 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.

According to TrendForce, Samsung, a distant second with a 16.3% market share, announced a 171 trillion won $132 billion investment plan last year to overtake TSMC as the world's top logic chipmaker by 2030.

Siyoung Choi, Head of Foundry Business at Samsung, said that we will continue to innovate in competitive technology development.

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

Samsung is the first to produce with 3 nanometre chip production, but TSMC plans 2 nanometre volume production in 2025.

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

There's too much variety in the non-memory, said Kim Yang-jae, analyst at Daol Investment Securities.

There are only two kinds of memory chips - NAND Flash and DRAM. You can concentrate on one thing, increase efficiency and make a lot of it, but you can't do that with a thousand different non-memory chips. According to Mirae Asset Securities, Samsung's compound annual growth rate CAGR of capital spending between 2017 and 2023, is estimated to be 7.9%, compared to TSMC's estimated 30.4%.

The efforts of Samsung to compete with the industry leader have been hindered by less than expected yields of older chips during the past year or so, analysts said. The company said in March that its operations have shown a gradual improvement.