Samsung Electronics Vice President Lee Jae-yong Attends the groundbreaking ceremony of the Semiconductor R&D Center in South Korea in August (Source: Samsung Electronics Official Website)
Titan Media Note: On the afternoon of September 21, Samsung Group and Samsung Electronics Vice President Lee Jae-yong said when meeting with the media that SoftBank Group CEO OSon Masayoshi will visit Seoul next month. It is expected that the two sides will form a strategic alliance (Strategic Alliance) in the British semiconductor design company Arm, and may also discuss matters such as mergers and acquisitions. If they participate in the acquisition of Arm, it is expected to become the largest merger and acquisition case in the chip industry this year. This news has sparked heated discussions in the entire semiconductor industry.
In the past 43 years, Samsung Electronics has continued to focus on semiconductor technology innovation. In terms of advanced foundry, it has now become a new force in confronting TSMC.
Titanium Media App has exclusively interviewed Samsung Electronics' semiconductor business and equipment solutions department, trying to explore the investment of more than $320 billion in China in five years. It also announced that it would invest $200 billion to build 11 new chip factories in the United States. How does Samsung Electronics, a company, find a balance, win-win and "common points" under the competition for chips between China and the United States.
On September 7, 2022, at the southernmost end of Gyeonggi-do , more than 70 kilometers away from Seoul, South Korea, Samsung Electronics (005930.KS) officially launched the world's largest semiconductor production base - Line 3 (P3) facility, the Pyeongsawa Park. It produces 14nm DRAM and ultra-high capacity V NAND chips, and the most advanced processes below 5nm.
On the same day, media reporters also saw the internal situation of the Samsung Pyeongtaek No. 1 production line launched five years ago for the first time.
enters the park, and the automatic transportation equipment (OHT) equipped with chips moves continuously overhead at a speed of 300 meters per minute. All projects are 100% automated, from material input to cleaning, evaporation, etc.
, head of Samsung Electronics DS (Semiconductor Business and Equipment Solutions) business unit, said in an interview with the media on the 7th that through large-scale investment in advanced technology and operating P3 facilities, it will further consolidate the dominance of , Samsung in the Nand Flash market, which is of great significance.
In fact, as the world's largest technology giant with market value and the second largest technology giant with 3nm chip manufacturing capabilities, Samsung Electronics has been making frequent moves in the field of chip semiconductors recently.
In July, Samsung Electronics announced that 3nm chips based on GAAFET (full-surround gate transistor) technology will be mass-produced for high-performance computing, mobile SoC and other fields; on August 19, Samsung Electronics Vice President Jay Y. Lee attended the groundbreaking ceremony of the next-generation semiconductor R&D center in Qixing Park, South Korea. Samsung Electronics plans to invest about 20 trillion won by 2028 to build a cutting-edge semiconductor R&D park.
Samsung Electronics is making full efforts to advanced chip semiconductors at a rapid speed. At present, the company has become the unquestionable No.1 in the global memory chip field and the global semiconductor product sales field.
Looking back on the past 84 years, Samsung Group has gradually grown from a "Samsung Chamber of Commerce" with agricultural and food sales as its core to a trillion-level industry giant covering 16 listed subsidiaries such as electronics, biomedicine , and products. The products are deeply rooted in the daily life of Koreans .
However, Samsung, which has gone through more than half a century, still faces many challenges through multiple industrial cycles. Including the two financial crises in 1997 and 2008, bottlenecks in advanced chip semiconductor technology, the current COVID-19 pandemic, high inflation hikes in pressures, and the decline in consumer-grade chip sales. As Qing Guixian said, "The world changes so fast."
In the end, Samsung has survived to this day, investing in technology research and development on a large scale, and continuously achieving technological innovation: Samsung inspires the world through transformative ideas and technologies to create the future
Next, Samsung Electronics will invest more funds in the field of chip semiconductors, including the wafer foundry business. According to the "Semiconductor Vision 2030" development blueprint announced in 2019, Samsung Electronics plans to invest a total of 133 trillion won (approximately US$115.7 billion) within ten years, and vows to become the leader in the system semiconductor industry by 2030, that is, the world's largest non-memory semiconductor company.
Samsung has always been an important participant in the Chinese market.
Samsung DS department exclusively revealed to Titanium Media App that as the earliest overseas company to enter China, as of 2021, Samsung has invested more than US$50 billion in China, of which, the new investment in the past five years has reached more than US$20 billion, and 80% is concentrated in high-tech industries such as semiconductors and new energy power batteries. Even during the COVID-19 pandemic, Samsung still maintained a stable investment of US$400 billion or US$5 billion per year in China.
Ten years ago, Samsung Semiconductor settled in Xi'an, Shaanxi to establish the world's important semiconductor production base, and is also the largest foreign investment project in Shaanxi. Samsung's Xi'an plant's production capacity currently accounts for more than 10% of the world's NAND flash memory capacity.
So, how will Samsung semiconductor plan and regain its peak in the future in this global advanced chip competition? What role will the Chinese semiconductor market play in it?
htmlIn late August, Titanium Media App exclusively interviewed Samsung DS business unit, trying to reveal the future "core" of this global technology giant.
Next big game chess
"If you fail to enter the semiconductor business, Samsung Group will lose half of its territory. But I think only Samsung can take this adventure." The late Samsung Group founder Lee Byung-chul said in an interview with a media in 1985.
Before that, in 1983, Lee Byung-chul published the " Tokyo Declaration " to enter the semiconductor business. He stressed that although this is a difficult challenge with extremely high risks, he started a new career with the entrepreneurship of "must be Samsung".
In fact, looking back on the past half century, Samsung has been playing a "big chess" in the field of chip semiconductors with strong cycles.
chip semiconductor can become one of Samsung Electronics' pillar businesses, which is closely related to the importance it attaches to the semiconductor industry in South Korea.
975, the South Korean government announced the "Six-Year Plan" to support the development of the local semiconductor industry. In December 11979, Samsung established a R&D center in Suwon, South Korea, and opened it in April 1980. After the development of Suwon R&D Center, it helped Samsung further enter the fields of electronics, semiconductors, polymer chemistry, genetic engineering, optical communications, etc. and aerospace, as well as a variety of new technological innovation areas from nanotechnology to advanced network architectures.
983, Samsung entered the semiconductor field in Gyeonggi Province. Subsequently, from 1983 to 1987, the global semiconductor industry entered a low period, and Samsung increased its countercyclical investment, pursued technological innovation, and continued to grow and grow. 992, the world's first 64Mb DRAM memory was born in Samsung Electronics Xingyuan. The world's first 64Mb DRAM chip developed by Samsung Electronics
DRAM was hailed as "rice in the electronics industry" at that time and was a cutting-edge technology product. Samsung Electronics will mass production of 64Mb DRAM, marking the beginning of Samsung's leadership. Since 1993, Samsung has achieved first place in memory semiconductors.
Since 2002, Samsung Electronics has firmly ranked first in the global NAND flash memory market share and has continued to lead the way in the past 20 years.
On September 18 this year, the semiconductor market sales report for the second quarter (April-June) released by market research firm Omdia showed that although the global semiconductor market size in Q2 decreased by US$3.111 billion on a month-on-month basis, benefiting from stable demand, Samsung Electronics' chip sales reached a record US$20.3 billion in the quarter, accounting for about 12.8% of the world. It has surpassed Intel for four consecutive quarters, firmly ranking as the global semiconductor sales champion.
At present, Samsung Electronics is not only one of the world's largest semiconductor IDM ( vertically integrated manufacturing) companies, but also the only chip company that promotes and leads advanced extreme far ultraviolet (EUV) lithography technology for manufacturing DRAM.
Samsung Electronics DS business unit led by Qingguixian includes various memory products such as foundry, DRAM, solid-state drive , UFS and eMMC embedded storage, mobile, automotive and wearable device processors, as well as display chips, RF communication chips, OLED, power management and other chip design and production, and is used in the fields of automobiles, AI ( artificial intelligence ), 5G, big data and data centers, integrated memory and computing integration (PIM).
Among them, in the Foundry business, Samsung's foundry business accounted for 17% of the global total in the past few years. Among them, Samsung's self-developed application processors (APs), display driver ICs (DDIs), and even special specifications of memory for the exclusive market account for half of its chip manufacturing output.
In recent years, Samsung has been keen on strengthening its OEM business.
Samsung Semiconductor's capital expenditure share in the past two years has increased from 16% to around 25%, and is currently close to 40%. The fact that more than 80% of the revenue of the System LSI division comes from foundry services shows that Samsung wants to promote the foundry business and allow it to contribute more profits to the company - in 2021, Foundry business revenue contributed 7.3% to Samsung Electronics.
At the same time, Samsung Electronics is also actively promoting the development of open source technology, launching technical cooperation based on OCP with Inspur, and named this type of cross-industry cooperation "Poseidon" project. In 2020, Samsung and Inspur jointly released the Enterprise and Data Center Solid State Drive Specifications (EDSFF) E1.S Solid State Drive Reference System Poseidon V1, and successfully put it into mass production in 2021. Last year, Samsung released its first EDSFF E3 reference system, Poseidon V2, based on open source hardware technology.
Samsung DS department told Titanium Media App that its team is developing and supplying a variety of memory and solutions built into the Poseidon system, which can make data center systems faster, higher capacity and more efficient.
It is worth noting that at present, Samsung Electronics is adjusting its SoC (processor) business model, hoping to develop a strategy that can maintain competitiveness in the long run by maximizing the use of resources.
"In particular, we will be committed to strengthening the competitiveness of the next generation of 'Exynos', and based on the full 5G series, gradually expanding the market through mid- and low-end products and high-end products. At the same time, Samsung will also expand the application of Exynos to product fields such as wearable devices, notebook modems, and Wi-Fi, in order to improve the business structure with mobile as the core." Samsung DS department told Titanium Media App.
Samsung Semiconductor Factory (Source: Samsung Electronics Official Website)
In addition, for the entire chip semiconductor industry, environmental security, green production, and reducing carbon emissions have become important issues in the development process of enterprises.
As the world's largest company in electricity and water consumption in the information technology (IT) industry, Samsung Electronics is setting new carbon emission targets and investing more than $5 billion to promote sustainable development.
htmlOn September 15, Samsung Electronics released the "New Environmental Business Strategy" report, announcing that it will achieve carbon neutrality by 2050 - overcoming the climate crisis through innovative technologies such as ultra-low power semiconductors and product development, and plans to achieve 100% green electricity supply by 2050. The company also decided to join the global RE100 and will spend $5.03 billion (7 trillion won) by 2030 to promote the reduction of industrial carbon emissions, recycling of waste electronic products, and protecting water resources.Specifically, Samsung DS department introduced three major technical means to strive to achieve carbon neutrality to Titanium Media App:
In addition, Samsung Semiconductor has also set up a "green center" in the Xi'an Park, which will filter and adsorption in the plant through biological treatment, and process it into the "ultra-pure water" required for secondary utilization. "In fact, not only the Xi'an factory, but all Samsung's factories have extremely advanced wastewater purification facilities. Samsung Semiconductor's factories in Xi'an and Suzhou have achieved a 100% resource circulation rate." Samsung DS department said.
In the future, Samsung also hopes to freeze water consumption at last year's level while adding semiconductor production lines, maximize the utilization of circulating water , and plans to significantly reduce the power consumption of memory used in data centers and mobile devices through chip low-power technology.
Samsung said that if the data center is replaced with new Samsung Electronics solid-state hard drives (SSDs) products, as well as DDR5 DRAM, it can save 8.5TWh of electricity usage - equivalent to about 60% of the total household electricity consumption in Seoul, South Korea in 2021.
balanced chip decoupling, and rapidly promote the local 3nm wafer manufacturing
chip industry is an industrial system that relies heavily on globalization. At present, 23 countries and regions around the world have the ability to participate in multiple links of the semiconductor industry.
According to 2019 data, in the global semiconductor trading market, American companies account for nearly 50%, South Korean companies account for nearly 20%, Japan and Europe each account for about 10%, and mainland China and Taiwan each account for about 5%.
However, with the "decoupling" between China and the United States in the semiconductor industry and the trend of "domestic substitution" in the domestic chip semiconductor industry, whether it is the international giants in the field of semiconductor materials , equipment, and EDA, or chip suppliers such as Samsung, Intel, Nvidia, and AMD, they are in a very sensitive and embarrassing situation in China. On the one hand, they must steadily improve sales performance in Greater China, and on the other hand, they must try their best to solve the constraints and troubles of the United States on China.
Qingguixian’s solution to this is: balance and win-win.
"It's hard for us to miss a market like (China) with many important customers. We are working hard to resolve conflicts and find a win-win solution for everyone." Qing Guixian told the media on the 7th that he hopes South Korea "firstly seeks China's understanding, and then negotiates with the United States."
According to the financial report, of Samsung Electronics' approximately US$195.3 billion in fiscal year 2021, US$31.9 billion came from China, accounting for 16.3%.
In fact, Samsung has many semiconductor facilities in China, and factories in four places - the Nand Flash factory in Xi'an, Shaanxi, the packaging and testing factory in Suzhou, the LED factory in Tianjin, and the OLED factory in Dongguan, Guangdong. In addition, Samsung Semiconductor also has R&D centers in Xi'an, Suzhou and Hangzhou; its sales headquarters are located in Shenzhen and its sales network is spread across many cities in China.
Among them, Samsung Xi'an Semiconductor Factory is the only factory invested overseas that integrates memory chip manufacturing and packaging and testing.
022 is also the tenth year that Samsung Semiconductor has settled in Xi'an. Samsung Xi'an factory has completed all construction and investments such as the Phase 1 NAND flash memory factory, the Phase 2 factory and the Phase 1 packaging factory. Samsung exclusively revealed to Titanium Media App that so far, Samsung Semiconductor has invested a total of US$26 billion in its factory in Xi'an and continues to invest in the production of the world's most advanced new products. (Note: The advanced here does not refer to advanced node manufacturing processes, but Samsung's self-developed advanced technology)
Samsung Xi'an Semiconductor Factory is the only factory invested by Samsung Electronics overseas that integrates memory chip manufacturing and packaging and testing
As of 2021, Samsung has invested more than US$50 billion (approximately RMB 316.725 billion) in China, of which the new investment in the past five years has reached more than US$20 billion, and 80% are concentrated in high-tech industries such as semiconductors and new energy power batteries. Even during the epidemic, Samsung still maintained a stable investment of US$400 billion or US$5 billion per year in China.
Samsung Semiconductor told Titanium Media App that Samsung's business in China has been developing for a long time. In addition to its own development, as a good partner of China's IT industry, Samsung also hopes to contribute to the development of China's IT industry. At present, Samsung Electronics operates a global manufacturing, R&D and sales network according to the needs of the global market.
At the same time, in South Korea, Samsung Electronics is increasing its support for wafer foundry.
According to the financial report, Samsung Electronics expects revenue in fiscal year 2022 to reach US$240 billion, an increase of about 8% compared with US$221 billion (279.6 trillion won) in the whole year of 2021.Among them, nearly 40% will come from its mobile communications department, mainly mobile devices such as mobile phones; the other 30% will come from the semiconductor department, and memory is the majority of semiconductor revenue and is also the "lifeline" of Samsung Electronics.
Although Samsung Electronics is now the world's largest semiconductor company, it is suffering from the catching up and restraint of other competitors. In the field of memory semiconductors, latecomers from China, Japan and other countries are very fierce, and the only solution is technological development.
However, with the global economic recession and the scale of consumer electronics shrinking, the semiconductor business is not optimistic, and DRAM is the first to be affected. Qing Guixian expects that the semiconductor industry will not show any sign of improvement next year.
Therefore, in the short term, the wafer foundry business revenue of advanced nodes is becoming Samsung Electronics' new growth engine.
For wafer foundry company , the industry has higher demand for chip performance and power consumption, which drives continuous progress in wafer manufacturing technology. The new generation of process technology means new products with higher value, and leading process technology means being able to seize higher market share. This is the driving force for the development of the wafer foundry industry and has also created a situation where wafer foundry companies are constantly pursuing advanced process technology.
Since the beginning of 2000, Samsung Electronics has begun researching the structure of GAA transistors. Starting from 2017, the company officially applied it to the 3nm process and announced in June this year that it would start mass production of the 3nm process using GAA technology.
As of now, only TSMC and Samsung have the capacity to mass-produce 3nm chips. So in this advanced process chip competition, only two companies remain to compete.
But the problem is that Samsung Electronics' wafer foundry business has been stagnating at about 18% since 2019, which is in sharp contrast to TSMC's continued maintaining more than 50%, which is very fierce.
However, Samsung DS is constantly filling in its shortcomings and developing rapidly.
Samsung DS department told Titanium Media App that Samsung's OEM business currently has more than 100 customers, which is a three-fold increase compared with 2017 when the OEM business was first established. Regarding 3nm, there are also many cooperative customers that are in talks with it, which will be used in the fields of high-performance, low-power high-performance computing and mobile processors.
In Samsung's view, high-performance computing (HPC) customers need a second supplier, so in addition to TSMC, they will choose between Samsung and Intel. Samsung even hopes to join forces with Intel to break TSMC's dominance in the field of advanced node manufacturing.
"This is not a question of numbers, but a question of 'do or die'." Lee Jae-yong said.
In July this year, Lee Jae-yong announced that Samsung Electronics launched its largest five-year investment plan of 450 trillion won (US$355 billion) in history, of which more than 60% of the funds will be invested in the semiconductor field.
Less than a year ago, Samsung Electronics also said it would invest 240 billion won in core businesses such as semiconductors, displays and biology in the next three years.
The transformation in just one year is a heavy "shocking bomb" that Lee Jae-yong threw on the world against the backdrop of the semiconductor industry.
On May 20 this year, during US President Biden visiting Pyeongtao, South Korea, Samsung Electronics Vice President Lee Jae-yong delivered a speech
Return to Samsung, Lee Jae-yong had high hopes for semiconductors. He once took out the will and relics of founder Lee Byung-chul in front of the staff to relive the challenging spirit of the past. He pointed out that Samsung Electronics should have the technology capabilities to be globally ahead of the crisis.
"Although it is difficult at the moment, it plans to continue to invest and prepare for the prosperity period." Qing Guixian revealed to the media that in the future, Samsung Electronics will accelerate the implementation of large-scale mergers and acquisitions in the semiconductor industry. (This article was first published on Titanium Media App, author | Lin Zhijia)
