Samsung aims to produce 1.4nm chip by 2027

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Samsung aims to produce 1.4nm chip by 2027

An aggressive five-year plan to lure US chip buyers with more advanced technology is being announced by Bloomberg Electronics Co., aiming to produce transistors that are just 1.4 nanometers wide by 2027.

The company's chip contract-manufacturing unit, known as a foundry, is looking to triple its revenue by the year 2021, according to Executive Vice President Moonsoo Kang at a briefing in San Jose, California. To get there, the business will need to make several technological leaps and further inroads in the US market for outsourced chips.

Samsung shares rose by 4.3% in Seoul on Tuesday after falling by almost a third this year due to rising costs and a downturn in the memory market.

The Suwon-based company is the world's largest chipmaker by revenue, but its foundry business is playing catch-up with Taiwan Semiconductor Manufacturing Co., which has a commanding lead in the market and top-of-the-line production capabilities. Samsung recently lost out to TSMC on an Nvidia Corp. in order to produce the RTX 40 series of graphics cards, which moved to a 4 nanometer process.

Samsung a latecomer to the foundry business, has been in a hurry to advance its technology ahead of expanding capacity. The Korean chipmaker sees its 3 nm chip process as its game changer, Kang said, and first started production at that node ahead of TSMC. Three times more resources are being put into 3 nm production than it did with previous tech generations in an effort to meet client demand.

Samsung executives said at the briefing that the company's yields -- the percentage of functioning chips per production run -- are now among the best in the industry. It is important to stay on the cutting edge of technology. The company wants to take the lead in advanced chipmaking by starting mass production of second-generation 3 nm chips in 2024 and then 2 nm parts in 2025. Two years later, that will set the stage for the 1.4 nm products.

Part of Samsung's pitch to US customers is its decision to manufacture in America. Samsung has an existing plant in Austin, Texas, and is building one in the nearby town of Taylor. The plant, which is set to start operations in 2024, is likely to use the latest production methods, such as 3 nm technology.

Growth at global foundries, led by TSMC and Samsung, may surpass semiconductor averages in the coming decade, we believe. The foundries could fuel growth with more orders from integrated device manufacturers, as well as the rise of chipmakers. Fabless chipmakers may enjoy the benefits of outsourcing jobs to multiple foundries, such as improved supply security, lower costs, faster product switches and better manufacturing technology support than producing chips at in-house facilities.

It has no plans to add to its limited availability of older types of production.

TSMC is beefing up its US presence. In an effort to balance the industry's heavy reliance on Asian manufacturing, Samsung added capacity in the US and Europe, part of an effort to balance the industry s heavy reliance on Asian manufacturing.

If needed, Samsung could become an even bigger manufacturer in Texas, according to Kang. The company has secured enough sites in the region to meet demand.

Americans are moving to cheaper places when home prices rise, despite the fact that home prices are not as high as in the U.S.