Samsung beats market leader to roll out 3 nm chip

Analysts say companies will wait for demonstration of new chip’s cost-efficiency

Samsung Electronics Co. kicked off mass production of 3-nanometre chips that are more powerful and efficient than predecessors, beating rival Taiwan Semiconductor Manufacturing Co. to a key milestone in the race to build the most advanced chips in the world.

South Korea’s largest company will begin with 3 nm semiconductors for highperformance and specialised low-power computing applications before expanding to mobile processors, it said in a statement on Thursday.

By applying so-called Gateall-around transistor architecture, Samsung’s 3 nm products reduce power consumption by up to 45 per cent and improve performance by 23 per cent compared to 5 nm chips, it said.

Samsung shares were down about one per cent in Seoul on Thursday, in line with the KOSPI benchmark.

Samsung’s push to be first

to market with the latest technology is essential in its uphill climb to match TSMC, which remains dominant in the contract chipmaking, or foundry, market.

The Taiwanese firm accounts for more than half of the global foundry business by revenue and is the exclusive supplier of Apple

Inc.’s Silicon processors for iphones, ipads, Macbooks and desktop Mac PCS.

TSMC and Samsung are competing for large multiyear orders from the likes of Apple and Qualcomm Inc. 3 nm mass production from the Taiwanese chipmaker will commence in the second half of the year, TSMC has said. Samsung will produce 3nm chips at its Hwaseong facilities and is expected to extend that production to its newest Pyeongtaek fab.

“We will continue active innovation in competitive technology development and build processes that help expedite achieving maturity of technology,” said Siyoung Choi, president and head of Samsung’s foundry business.

According to Charles Shum, BI analyst, Samsung’s launch of 3 nm node chip production, based on a new-generation transistor architecture, shouldn’t affect TSMC’S market share and sales growth in the next 12 months.

“Despite stronger performance, Samsung’s 3 nm chip needs to demonstrate it can be produced at the same cost-efficiency level as TSMC’S most advanced N3 process before it can gain new orders from Apple, Qualcomm and other large chip designers,” he said.

Samsung’s advance comes at a sensitive time for the semiconductor industry, whose place in the global geopolitical order is currently under scrutiny by leading governments.

The United States and China have both taken steps to bring more chipmaking capacity and expertise within their borders arguing it is a matter of national security.