Samsung will improve the competitiveness of its chip business

The South Korean tech giant Samsung has decided to keep calm the market over the competitiveness of the chip business. As per the latest information, the global market leader in memory chips is also taking steps to close the gap with arch-rival TSMC in chip foundry.

Back last year, the South Korean tech giant planned to invest 171 trillion won ($151 billion) by 2030 to develop its chip foundry business.

In Samsung’s dominant DRAM memory chips, rivals Micron and SK Hynix are rolling out more advanced chips faster. The performance and sales of Samsung’s “Orion 2200″ mobile processor chips released this year were disappointing.

Chan Lee, managing partner at Petra Capital Management, said: “Designing your own chips requires creativity and engineering, but under Lee’s leadership, Samsung has a stronger risk-averse orientation, with engineers refraining from new innovation attempts. ”

“For chip designers and foundries, culture is the key to success,” Dylan Patel, principal analyst at SemiAnalysis, wrote in a recent research note. “These talented engineers need the right motivation. , direction and leadership.” He attributed Samsung’s problems to a “toxic” culture that led to different business units pointing fingers at each other “in the face of mistakes” for Samsung’s non-memory chip business.

Samsung’s share of the smartphone application processor market has nearly halved since 2019, ranking fourth with a 6.6 percent share last year, according to market research firm Strategy Analytics. That compares to Qualcomm’s 37.7 percent share, MediaTek’s 26.3 percent, and Apple’s 26 percent. “Samsung’s technological edge is disintegrating,” Patel said. “Samsung is slipping in every aspect of technology development, including one area where it used to beat all its competitors: DRAM.”

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Analysts pointed out that TSMC is advancing mass production of 4-nanometer and 5-nanometer chips at a faster pace, affecting Samsung’s ability to produce enough cutting-edge chips for its most important customers. But Samsung said it now has the ability to steadily advance chip production to “maximize” chip supply.

Earlier last week, Samsung held a ceremony to celebrate the shipment of its first 3-nanometer chips. On the 3nm process, Samsung beat TSMC to bring the next-generation technology to market first. James Lin, an analyst at Dalton Investments, said: “If Samsung can increase the output rate of its latest chips, it still has a chance to re-engage customers. No customer wants to risk relying solely on TSMC as a supplier.”

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