Samsung beats TSMC to 3 nm chip race

The mass production of 3 nanometer chips, which are more powerful and efficient than predecessors, has been started by Bloomberg Electronics Co., beating Taiwan Semiconductor Manufacturing Co. to a key milestone in the race to build the most advanced chips in the world.

South Korea's largest company will begin with 3 nm semiconductors for high-performance and specialized low-power computing applications before expanding to mobile processors, it said in a statement on Thursday. Samsung s 3 nm products reduce power consumption by up to 45% and improve performance by 23% compared to 5 nm chips by applying so-called Gate-All Around transistor architecture.

In Seoul on Thursday, Samsung shares were down about 1%, in line with the KOSPI benchmark.

Samsung's push to be first to market with the latest technology is essential in its uphill climb to match TSMC, which remains dominant in the contract chipmaking or foundry market. The Taiwan firm accounts for more than half of the global foundry business by revenue and is the exclusive supplier of Apple Inc.'s Silicon processors for iPhones, iPads, MacBooks and desktop Mac PCs.

TSMC and Samsung are competing for large multiyear orders from the likes of Apple and Qualcomm Inc. 3 nm mass production from the Taiwanese chipmaker will begin in the second half of the year, TSMC has said. Samsung is expected to expand its production to its newest Pyeongtaek fab and will produce 3 nm chips at its Hwaseong facilities.

Siyoung Choi, president and head of Samsung's foundry business, said that they will continue to innovate in competitive technology development and build processes that help speed up the maturity of technology.

Samsung's launch of 3 nm node chip production, based on a new-generation transistor architecture, shouldn't affect TSMC's market share and sales growth in the next 12 months. Despite stronger performance, Samsung s 3 nm chip needs to demonstrate that it can be produced at the same cost-efficiency level as TSMC's most advanced N 3 process before it can gain new orders from Apple, Qualcomm and other large chip designers.

The US and China have both taken steps to bring more chipmaking capacity and expertise within their borders - arguing that it is a matter of national security and Samsung is in the process of setting up a new fabrication facility in Texas.

President Joe Biden visited Samsung's plant in Pyeongtaek last month and highlighted semiconductor alliances as part of his agenda to strengthen international supply chains and stem chip shortages while reducing reliance on China.

Eric Schmidt urges the US to lean on TSMC, Samsung for Chip Security.

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