Samsung Electronics Foundry Also Attracts Intel "Outsourcing Negotiations Underway"

[Asia Economy Reporter Changhwan Lee] There is a possibility that Intel may entrust semiconductor foundry production to Samsung Electronics.

According to Bloomberg on the 10th, Intel is negotiating to outsource the production of key semiconductor chips, which will begin production in 2023, to Taiwan's TSMC or South Korea's Samsung Electronics.

Bloomberg predicted that Intel will make a final decision and announce it within two weeks. Intel is scheduled to announce its Q4 results for last year on the 21st, and it is said that foundry-related information will also be disclosed on that day. However, currently, it is reported that TSMC is more likely to receive orders from Intel than Samsung Electronics.

Intel has recently been facing difficulties due to delays in transitioning to advanced process technology. In October last year, Bob Swan, Intel's CEO, stated, "By the end of January 2021, we will decide whether to expand our own 7-nanometer production capacity or outsource production through foundry companies."

At the end of last year, an American activist fund urged Intel to seek strategic alternatives, claiming that Intel had been outpaced by Samsung and TSMC.

Hedge fund Third Point pointed out at the end of last month that Intel's loss of manufacturing leadership and other missteps allowed several semiconductor competitors to leverage TSMC's and Samsung's process technologies to sacrifice Intel and secure significant market share.

They also expressed concerns that Intel's loss of competitiveness could lead to a national security crisis. In response, Intel has stated that it will actively cooperate with Third Point's demands.

The market views Intel's outsourcing as a significant opportunity for Samsung Electronics' foundry business. Even if Intel initially entrusts foundry production to TSMC, there is a limit to the volume TSMC can handle, so it is expected that Intel will also reach out to Samsung Electronics, the second-largest player.

Samsung Electronics announced the 'Semiconductor Vision 2030' in April 2019, pledging to invest 133 trillion won in the system semiconductor sector by 2030 to become the world's number one.

Do Hyunwoo, a researcher at NH Investment & Securities, said, "Samsung Electronics' growth momentum this year will come from semiconductors, especially the foundry sector, which will begin to grow in earnest," adding, "Recently, there is a global foundry supply shortage, and only Samsung Electronics and TSMC can perform processes below 10 nanometers, intensifying market monopolization."

This content was produced with the assistance of AI translation services.