The Untold Story Of Samsung’s Growing Chip Business
CNBC
17 min, 40 sec
Samsung, known for its consumer electronics, is also a leader in the semiconductor industry, focusing on memory chips and foundry services while expanding its manufacturing presence in the U.S.
Summary
- Samsung is a ubiquitous brand, leading in memory chips and rapidly growing in foundry services, with a goal to surpass TSMC.
- Despite a slump in chip demand, Samsung is continuing its expansion, including a $17 billion fab in Taylor, Texas.
- The U.S. Chips Act incentivizes domestic manufacturing, aligning with Samsung's U.S. growth and geopolitical concerns around chip production in Asia.
- Samsung's history is marked by diversification and innovation, but also by legal battles and scandals involving its founding Lee family.
- The company's future includes tripling leading-edge manufacturing capacity and creating advanced chips as small as 1.4 nanometers by 2027.
Chapter 1
![Samsung is not only a major player in consumer electronics but also dominates the semiconductor industry with a substantial market share in memory chips and advanced logic chips.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTY0LCJwdXIiOiJibG9iX2lkIn19--0db3c82d6b87faef330e82de618071954c93da8b/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_26.jpg)
Samsung is not only a major player in consumer electronics but also dominates the semiconductor industry with a substantial market share in memory chips and advanced logic chips.
- Samsung's products range from Android phones to unconventional displays, with a presence in over 100 million U.S. households.
- The company leads the memory chip market for three decades, controlling nearly half the market share in DRAM and NAND.
- It's the world's second-biggest maker of advanced logic chips, used in a variety of technologies including Tesla's and smartphones.
![Samsung is not only a major player in consumer electronics but also dominates the semiconductor industry with a substantial market share in memory chips and advanced logic chips.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTY0LCJwdXIiOiJibG9iX2lkIn19--0db3c82d6b87faef330e82de618071954c93da8b/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_26.jpg)
Chapter 2
![Facing a decline in memory chip prices, Samsung cut production but doubled down on foundry services, planning extensive investments in South Korea and the U.S.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTY2LCJwdXIiOiJibG9iX2lkIn19--cf3d8b5d1b23f40bc4cc87fbe7bfe367541eec3e/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_91.jpg)
Facing a decline in memory chip prices, Samsung cut production but doubled down on foundry services, planning extensive investments in South Korea and the U.S.
- Samsung ended 2022 with significant revenue but faced a 95% profit drop in Q1 2023, leading to a cut in memory chip production.
- The company is focusing on foundry services, investing in a $228 billion cluster of fabs in South Korea and a $17 billion fab in Taylor, Texas.
- Samsung aims to become the leading foundry service provider, not settling for the current second position behind TSMC.
![Facing a decline in memory chip prices, Samsung cut production but doubled down on foundry services, planning extensive investments in South Korea and the U.S.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTY2LCJwdXIiOiJibG9iX2lkIn19--cf3d8b5d1b23f40bc4cc87fbe7bfe367541eec3e/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_91.jpg)
Chapter 3
![Samsung's history reflects its growth from a trading company to a tech giant, with an increasing focus on semiconductor production in the U.S.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTY4LCJwdXIiOiJibG9iX2lkIn19--ecf2f344a94f662f7d3e990f59f2ac8c3456c60a/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_219.jpg)
Samsung's history reflects its growth from a trading company to a tech giant, with an increasing focus on semiconductor production in the U.S.
- Founded in 1938, Samsung diversified into various industries and now is a leading electronics manufacturer.
- Samsung Semiconductor was established in 1980, and the company became known for its memory chips and smartphones.
- With a strong presence in South Korea, Samsung is now expanding in the U.S., including a new fab in Taylor, Texas.
![Samsung's history reflects its growth from a trading company to a tech giant, with an increasing focus on semiconductor production in the U.S.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTY4LCJwdXIiOiJibG9iX2lkIn19--ecf2f344a94f662f7d3e990f59f2ac8c3456c60a/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_219.jpg)
Chapter 4
![Samsung is advancing its chip technology while growing its manufacturing presence in the U.S., driven by customer demand and geopolitical considerations.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTcwLCJwdXIiOiJibG9iX2lkIn19--dbf8c4a2c044cb1d30f61705bb006cf4c19629d6/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_422.jpg)
Samsung is advancing its chip technology while growing its manufacturing presence in the U.S., driven by customer demand and geopolitical considerations.
- Samsung's chip technology advancements are on par with mid-size cars in cost, showcasing their value and complexity.
- The company's U.S. operations include memory chip production, with a strong emphasis on Texas for future growth.
- Customer demand and geopolitical risks are motivating factors for Samsung's increased U.S. manufacturing.
![Samsung is advancing its chip technology while growing its manufacturing presence in the U.S., driven by customer demand and geopolitical considerations.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTcwLCJwdXIiOiJibG9iX2lkIn19--dbf8c4a2c044cb1d30f61705bb006cf4c19629d6/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_422.jpg)
Chapter 5
![The U.S. Chips Act provides financial incentives for domestic chip production, aligning with Samsung's strategic shift toward foundry services and leading-edge chip manufacturing.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTcyLCJwdXIiOiJibG9iX2lkIn19--07084a3228f9ec79a86ac33e1275fe548c683b52/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_683.jpg)
The U.S. Chips Act provides financial incentives for domestic chip production, aligning with Samsung's strategic shift toward foundry services and leading-edge chip manufacturing.
- Samsung is benefiting from the Chips Act to offset higher U.S. production costs compared to Asia.
- The company is focusing on foundry services and advanced chip manufacturing, including plans for 2 nm and 1.4 nm chips.
- Samsung's growth includes significant investment in equipment and a commitment to sustainability and resource management.
![The U.S. Chips Act provides financial incentives for domestic chip production, aligning with Samsung's strategic shift toward foundry services and leading-edge chip manufacturing.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTcyLCJwdXIiOiJibG9iX2lkIn19--07084a3228f9ec79a86ac33e1275fe548c683b52/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_683.jpg)
Chapter 6
![Samsung's aggressive expansion faces challenges such as resource management and power reliability, while also contending with legal issues and complex relationships with competitors like Apple.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTc0LCJwdXIiOiJibG9iX2lkIn19--e8c38260b2947ae32cc6aeeeb16eaee3aaaec237/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_834.jpg)
Samsung's aggressive expansion faces challenges such as resource management and power reliability, while also contending with legal issues and complex relationships with competitors like Apple.
- Samsung's expansion raises concerns about water usage and power reliability, with Texas' independent grid posing unique challenges.
- Legal battles and scandals, including the Lee family's corruption charges, have affected the company's reputation.
- Despite a complex relationship with Apple as both a supplier and competitor, Samsung continues its growth trajectory.
![Samsung's aggressive expansion faces challenges such as resource management and power reliability, while also contending with legal issues and complex relationships with competitors like Apple.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTc0LCJwdXIiOiJibG9iX2lkIn19--e8c38260b2947ae32cc6aeeeb16eaee3aaaec237/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_834.jpg)
Chapter 7
![Samsung aims to dominate the semiconductor industry with ambitious goals for advanced chip manufacturing and a strategic pivot toward custom chips for emerging technologies.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTc2LCJwdXIiOiJibG9iX2lkIn19--9e8ecb9744b412832d8dcfb8105e042a602c92ae/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_964.jpg)
Samsung aims to dominate the semiconductor industry with ambitious goals for advanced chip manufacturing and a strategic pivot toward custom chips for emerging technologies.
- Samsung's roadmap includes tripling leading-edge manufacturing capacity and producing chips as advanced as 1.4 nm.
- The company's focus on foundry services caters to the rise of AI and large language models, competing with firms like Nvidia.
- Despite these ambitions, Samsung is committed to maintaining production of legacy chips, essential for various industries.
![Samsung aims to dominate the semiconductor industry with ambitious goals for advanced chip manufacturing and a strategic pivot toward custom chips for emerging technologies.](https://www.videogist.co/rails/active_storage/representations/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3NTc2LCJwdXIiOiJibG9iX2lkIn19--9e8ecb9744b412832d8dcfb8105e042a602c92ae/eyJfcmFpbHMiOnsiZGF0YSI6eyJmb3JtYXQiOiJqcGciLCJyZXNpemVfdG9fbGltaXQiOls3MjAsbnVsbF19LCJwdXIiOiJ2YXJpYXRpb24ifX0=--c9426325207613fdd890ee7713353fad711030c7/6915_964.jpg)
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