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TSMC Investing in 3-nm Process to Widen Gap with Samsung Electronics
Nimble Moves by TSMC
TSMC Investing in 3-nm Process to Widen Gap with Samsung Electronics
  • By Michael Herh
  • November 8, 2019, 10:46
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Taiwanese foundry company TSMC is accelerating investment in 3-nanometer processes to widen its gap with Samsung Electronics.

Taiwanese foundry company TSMC is accelerating investment in micro-fabrication processes to widen its gap with Samsung Electronics.

TSMC has recently broken ground on a new foundry plant that will use a 3-nanometer (nm) process. The new plant is expected to start volume production in 2022 at the earliest, foreign news reports said on Nov. 6. Its total investment will touch the level of US$20 billion. The 3-nm process is expected to churn out ultra-precision semiconductors mainly used in cloud computing, artificial intelligence (AI), and 5G mobile communications.

TSMC’s major customers are expected to be Apple, Huawei and Nvidia among others. TSMC is increasing the proportion of micro-fabrication processes, including a 7-nm process, which was applied to roll out products for Apple's iPhones recently. In addition, the company is accelerating the application of micro-fabrication processes in preparation for a sharp increase in demand for ultra-precision semiconductors. The Taiwanese foundry giant plans to increase production of 5-nm products next year. Furthermore, it is planning to start volume production of 2-nm chips starting 2024.

TSMC recently announced that it will raise its facility investment goal by up to 50 percent to US$14 billion to US$15 billion this year. It is a response to the rapid growth in demand for 7-nano-or 5-nano ultra-precision semiconductors stemming from the expansion of the 5G ecosystem.

Samsung Electronics is also focusing on securing micro-fabrication technology in line with recent changes in the semiconductor market. Samsung aims to mass-produce 3-nm products in 2021, one year ahead of TSMC. However, the company is not moving swiftly compared to TSMC, which has announced a large-scale facility investment plan in 3-nm processes and started the construction of a new plant.

Unlike TSMC, which has already announced a plan for a 2-nm process, Samsung Electronics has yet to disclose a specific plan for a 2-nm process.

Market research firm TrendForce predicted that TSMC's market share in the third quarter of this year is expected to rise by 1.3 percentage points to 50.5 percent from the previous quarter, while Samsung Electronics is expected to see its market share increase by only 0.5 percentage point to 18.5 percent. This means that the gap between the two will widen.