Print 13 comment(s) - last by mongofart.. on Jun 13 at 1:44 PM

While future as a supplier is uncertain, Samsung looks to give itself an edge in process

Other than Intel Corp. (INTC), the company perhaps investing the most in chipmaking research and development is Samsung Electronics Comp., Ltd. (KSC:005930).  Perhaps that's because Samsung -- like Intel -- actually manufactures the chips it sells, a rarity in today's market.  And like Intel, Samsung is willing to spend extra to try to gain an edge over competitors who source to third-party chip fabricators.

Samsung announced, according to Reuters, that it will build a new chip line for 300 mm wafers built on 20 nm and 14 nm processes.  The cost is estimated to be $1.9B USD, a pretty big chunk of change from Samsung's large research budget.

A location for the new line has not been announced, but it's quite possible that it could be added on the company's Texas property, which currently produces the chips found in nearly all of the smartphones sold by the world's top two smartphone makers -- Samsung and Apple, Inc. (AAPL).

Samsung smartphone chip wafer
Samsung is investing billions to improve its chipmaking. [Image Source: BSN]

Gartner, Inc. (IT), a market research company, estimates that orders of smartphone chips will soar from $23B USD in 2011 to $59B USD by 2016.  Samsung looks poised to vie with Intel for dominance in this market, thanks to process advantages that third-party fabs with smaller budgets -- such as Taiwan Semiconductor Manufacturing Comp., Ltd. (TPE:2330) don't have.

Samsung also looks to continue to dominate the market for memory and storage chips.  The DRAM line -- perhaps the last profitable one in the world -- will look to add process updates to continue to accomodate the thirst for lower power designs.  Samsung is also building in China a new plant to produce bleeding edge NAND flash storage chips, which will cost 4-5T won ($3.4-$4.2B USD) to complete.

Timeframes for the new processor and NAND lines have not been announced.

Source: Reuters

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Samsung deserve their sales
By Nyu on 6/7/2012 8:02:42 PM , Rating: 1
There you go again, Samsung actually spending and producing a lot of the essential components of smartphones, tablets, storage devices etc used by cockroach competitor Apple, who doesn't actually create or innovate -anything-, not even their OS is made from scratch on their own, most of it lies on borrowing the unix base.

Samsung is the real company moving technology further.

RE: Samsung deserve their sales
By Warren21 on 6/7/12, Rating: 0
RE: Samsung deserve their sales
By StevoLincolnite on 6/7/2012 10:04:09 PM , Rating: 1
Simply because Samsung manufactures the hardware and Apple is fabless doesn't mean Apple does not move technology forward, or is any less of a 'real' company.

The strong point that Apple has is that it buys exclusive rights on new technology, stopping it's competitors from getting it for a good 6-12 months.
A good example of this was the 'Retina' display.

RE: Samsung deserve their sales
By ats on 6/7/2012 11:31:04 PM , Rating: 4
In many cases, part of that exclusivity is actually generating the demand for a new part in the first place. Apple single handily increased expected DPI of smart phones by making it a major product feature and committing a large amount of money to pushing the manufactures in the direction they wanted. That's of course after they basically created the market in which android devices operate. There are a lot of things you can give Apple slack for, not innovating and pushing new technologies and features into the market isn't one of them.

RE: Samsung deserve their sales
By glenco on 6/8/2012 2:43:41 AM , Rating: 2
they make it people buy. someone else makes it, no one wants it. this has zero to do with technology and everything to do with image. apple can only release what other people make so they are not the innovators. it took apple to change the phone market purely because anyone else wouldn't be successful.

the problem lies in getting enough people to buy something to make it financially viable. this is where apple excels, people who buy apple buy it for the name, not what it can do. image conscious people do not purchase the same as normal people, e.g. not that much thought. others can release something but until apple does, the world (especially the media) does not notice. this is why everyone assumes apple does all this stuff first, because the media has told them so. all of the sudden it was cool to have an mp3 player as a watch years after the first were brought to market... enough said.

RE: Samsung deserve their sales
By ats on 6/9/2012 8:21:29 AM , Rating: 2
Apparently a lot of people wanted high DPI displays. It became a major selling feature and forced all the other phone makers to follow suit.

And this has EVERYTHING to do with technology. The displays wouldn't have existed without Apple. Apple had just as much to do with high DPI displays getting to market as any manufacturer of the display. In effect, apple is the funding partner that allowed the technological development to occur.

And people buy apple products because the products work for them. Simple as that. They don't buy it just because it has the Apple name on it, as evidenced by numerous apple products past and present.

RE: Samsung deserve their sales
By tayb on 6/8/2012 8:41:48 AM , Rating: 1
Thanks. I knew something was missing from the article and it was definitely an unrelated and off topic Apple comment from a fanboy. Now the article is complete. Thank you for coming through!

Minor Error
By soulcarver on 6/7/2012 8:34:24 PM , Rating: 2
"Samsung looks poised to [vie] with Intel for dominance ..."

RE: Minor Error
By fteoath64 on 6/8/2012 2:24:03 AM , Rating: 2
More so, Sammy is looking to out-edge Qualcomm with their S4 chips which are formidable and do have a range of offerings having many design wins in the market. Sammy has shown that their Exynos quad outperformed the Tegra3 which is enough to retain their leadership role. The process improvement is just Intel's trick to gain advantage at the expense of huge R&D investments in fabs. Things Intel do on a constant basis to retain its leadership role.

People should give Sammy credit for investing in a plant in Texas compared to China or some third-world country!.

RE: Minor Error
By Aries1470 on 6/8/2012 2:55:57 AM , Rating: 2
Actually, soulcarver was refering to the grammer issue.

Please oh please Jason, I like your articles very much, but can DT actually employ a proofreader / editor to check for things like this.

Here is another one (should be):
"actually manufactures the chips it sells,"

Else, a great article.

I fully agree with your statement:
People should give Sammy credit for investing in a plant in Texas compared to China or some third-world country!.

Now all they need to do is also make a "small" assembly line, and begone with the ITC ;-) since it will be made in the USA and then comes the issue of jobs etc to weigh in :-)

People need to understand that manufacturing EVERYTHING in China is not always good, and many countries across the globe should still manufacture in other countries. :-)

Again, thanks Jason for a good read, I don't need to scourge the web to find most of the things I need, and I personaly like the color you put on things.

By UnauthorisedAccess on 6/7/2012 7:52:19 PM , Rating: 2
...patent "smartphones made with using a 14nm process"!!

By messele on 6/9/2012 12:42:11 PM , Rating: 2
I take it none of you outraged Samsung heads realise that ARM was founded by Apple, Acorn computers and VLSI technologies?

Who uses who's tech again?

By mongofart on 6/13/2012 1:44:53 PM , Rating: 2
Now bring some competition back into the x86 market please;)

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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