Samsung has been trying to defeat TSMC and become the top player in the foundry business. However, it has always been one step behind the Taiwanese firm. However, it now appears that the South Korean chip giant might have a chance to better compete with TSMC as it has reportedly bagged chip orders from Cisco and Google.
According to a new report from South Korean tech publication ETNews, Samsung received a contract earlier this year to design and manufacture a chip that will be used in Cisco's next-generation telecommunication network. An industry insider reportedly mentioned that the South Korean firm is currently working on the development of the chip's design. The company is also said to have bagged orders from Google for designing and manufacturing a semiconductor chip that will be used in a sensor that can measure body movements.
Samsung will design and manufacture chips for Cisco, Google
Usually, foundries only manufacture chips that have already been designed. However, Samsung is taking a different approach for the time being and offering to develop features its customers need and provide customized technologies. So, the company will handle entire processes from design to mass production of chips for Cisco and Google. The company's ultimate goal is to become the largest foundry in the world and, to achieve that, it is taking a slightly different route compared to other foundries.
The exact worth of chip orders from Cisco and Google isn't known yet. However, since Cisco is the world's largest network equipment manufacturer that makes over $50 billion worth of sales every year, the order could be pretty big. Even Google is looking to strengthen its AR, AI-powered smart speaker, and smartphone businesses. It was also reported in the past that Samsung is designing custom SoCs for Google.
A significant part of Samsung's revenue for Q2 2020 came from its foundry and semiconductor divisions, and its chip business has seen an upwards trend. It is the only brand in the world apart from TSMC that has developed 7nm or lower chip manufacturing technologies. It has already received chip orders for Facebook's AR chips, Nvidia's Ampere GPUs, Tesla's autonomous vehicles, and Qualcomm's Snapdragon 875G and Snapdragon 735G SoCs.
Currently, TSMC holds a 51.5% share of the contract manufacturing market, while Samsung has an 18.8% share of the market. The South Korean firm recently started the mass production of 5nm chips, but it has reportedly faced issues related to lower yield. However, the company has flat out denied those reports and said that the manufacturing plan is being successfully executed.