Samsung wins massive chip contract from its largest chipmaking rival

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Last updated: January 27th, 2021 at 09:10 UTC+02:00

You know what they say: if you can’t beat them, win a few of their lucrative contracts covering massive volumes of cutting-edge silicon. OK, that might not ring a bell to everyone, but it certainly rang true to the person leading Samsung Foundry’s recent procurement talks with Intel. Because Intel’s largest rival in the chipmaking sphere just became one of its major chip suppliers, according to newly emerged reports out of South Korea.

Despite the somewhat unusual situation, Samsung’s achievement might not seem this impressive for long. As a number of reports from the past few weeks suggested Intel is also looking to offload some of its surplus production to TSMC, another one of its major rivals among silicon manufacturers.

Unusual or not, would this arrangement even change anything?

Today’s report mentions TSMC’s involvement, as well, with insiders claiming Intel opted to adopt a dual-vendor strategy for its next range of 14nm CPUs. This would be a so-called consignment manufacturing agreement, sometimes referred to as partial outsourcing.

While the details of the agreement between the two industry behemoths are still scarce, one figure that’s been floated around is the alleged size of Intel’s initial outsourcing order – 15,000 wafers per month. Assuming the new report is legitimate, this batch would undoubtedly be produced at Samsung’s existing 300nm plant in Austin, Texas. And yet the bottom line is that even had Intel completely ditched TSMC in favor of Samsung, the overall balance of powers in this tech segment would have probably remained the same.

In the meantime, TSMC is dashing ahead with the construction of its 5nm Arizona plant expected to begin operating in 2023. Samsung isn’t sitting idly, either, with last week’s reports alleging it’s fast-tracking plans for the construction of yet another foundry facility next to its existing Texas campus. And given the timing of its growing ambitions in the region, Samsung might very well ally with the newly inaugurated Biden administration before all is said and done.

Business IntelSamsung Foundry
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