Samsung’s chip manufacturing business expected to grow further this year

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Samsung announced its financial results for Q2 2020 last month, and it surprised everyone with strong earnings and profit despite the COVID-19 pandemic slowdown. A massive part of its earnings came from the company’s chip-making business, which achieved record quarterly and half-yearly revenues, thanks to higher demand from data center and server segments. Now, it is being expected that the South Korean firm’s foundry business will grow further.

Analysts believe that Samsung’s chip manufacturing business will see higher growth in the second half of 2020. The company had mentioned during its earnings call that its chip customers’ inventory build-up led to robust earnings. Currently, Intel is looking to outsource 7nm chip production to either Samsung or TSMC due to problems with its own 7nm foundry process. While the processor maker hasn’t finalized its choice yet, the order will have a trickle-down effect and the whole contract chip manufacturing industry will benefit from it.

Samsung said that it will begin mass production of mobile and high-performance computing chips in the second half of 2020, which will improve its business. The company is also looking to diversify its product portfolio beyond mobile products. It is expected to get contract chip manufacturing orders from Nvidia for its RTX 3xxx series GPUs and Qualcomm for the Snapdragon 875G and the Snapdragon 735G SoCs. If it manages to bag orders from Intel, it will be a great win for Samsung.

The South Korean chip giant has already started the mass production of 5nm chipsets and it will add a new foundry production line in Pyeongtaek for the 5nm EUV process node. It has already added an EUV-dedicated production line in Hwaseong. Samsung has said that the adoption of EUV technology is becoming more important as it allows scaling down complex structures on wafers and can be used for 5G, AI, and ML applications at lower power consumption.

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