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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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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.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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