In a bid to increase its market share in the rapidly growing semiconductor industry, Samsung has decided to separate its foundry unit and form a brand new business. The separation of the foundry business into a new unit is being seen as an attempt to ensure that it receives the funds and attention it needs to grow in face of tough competition from peers.
The company also said that it will be introducing new production techniques that are not being used by its competitors and said, that a brand new plant will be up and running by the year end.
Speaking about the need to create a separate business unit, Kelvin Low, a senior director of foundry marketing said:
As part of our commitment to play seriously in the foundry area we felt that it was best that we create an independent organization. That will result in less conflict of interest — although that’s not really an issue these days — it’s still a perception in some customers’ minds.
With a new unit, the world’s second largest chipmaker also hopes to shore up its challenge to current market leader Taiwan Semiconductor Manufacturing Co., which has been having a gala time since the past few years.
The semiconductor industry has also evolved significantly over the past few years. Today, large manufacturing entities like Samsung and Intel compete to receive orders fro companies like Apple. Once the client provides them with the design and specifications, they set to work — producing them in mass quantities.
And Samsung’s chip business has an important role to play in the overall picture as well. Last quarter, its chip unit provided two-thirds of the company’s total operating profit. So it is imperative that the company maintain a position of dominance in the niche. Meanwhile, the company has already promised that it will move its manufacturing from 10-nm to 8-nm, within the year. The company also hopes to bring in 7-nm by next year and go to the whole hog and bring out 4-nm by 2020.
