Samsung and Intel bosses discuss Korea-US Semiconductor Alliance

Samsung Electronics said on May 31 that Samsung Vice President Lee Jae-yong met with Intel CEO Patrick Gelsinger to discuss how to work together in the semiconductor industry, as competition grows. The heat is heating up among industry leaders including Intel and Samsung competing with the world’s largest contract semiconductor maker Taiwan Semiconductor Manufacturing Company (TSMC) amid supply chain troubles. global supply.

“Samsung Electronics Vice President Lee Jae-yong met Intel CEO Patrick Gelsinger during his visit to Korea on May 30,” Samsung said in a statement. “They discussed how to cooperate between the two companies.” The conversation also took place during prolonged semiconductor shortages. Samsung Co-CEO and Chip Business Manager Kyung Kye-hyun, Samsung Mobile head Roh Tae-moon, and other senior Samsung executives were also present at the meeting.

At this meeting, the executives “exchanged opinions on next-generation memory chips, fabless system chips, and foundry chips as well as for PCs and mobile devices during the meeting,” a statement from Samsung said. added.

Nikkei Asia has reached out to Intel’s Seoul office for comment on the event, but has yet to receive a response.

Originally, Intel and Samsung were both key players in the semiconductor industry. Intel has expertise in central processing unit (CPU) chip design, while Samsung is a leader in memory chip manufacturing.

Both companies are trying to expand their presence in the chip foundry business, manufacturing custom semiconductors, which is dominated by the TSMC tycoon. Samsung Electronics, a subsidiary of Samsung Group, announced last week that its company will invest 450 trillion won ($363 billion) in the semiconductor, biological and IT sectors over the next five years to promote growth.

The Samsung-Intel discussions come just 10 days after US President Joe Biden visited the Samsung semiconductor factory in Pyeongtaek city, his first stop on a three-day trip to South Korea.

Mr. Biden praised the factory as a good example of technology cooperation between the US and South Korea as Washington pushes to strengthen supply chains between the “shared value” countries. Analysts say Intel, through its chief executive’s visit to Seoul, is likely looking to build a more stable supply chain in the semiconductor industry.

“Supply chain is the biggest problem,” said Lee Jae-yoon, an analyst at Yuanta Securities. Materials, parts and equipment suppliers in South Korea have grown through Samsung Electronics over the past decade. They could be an option to exclude China in the supply chain.”

The Covid-19 pandemic shows the fragility of global technology supply chains, and their excessive reliance on component production in Asian countries, especially China. Lockdowns and work-from-home trends in the US and other advanced economies have sent demand for electronics skyrocketing, which suppliers shuttered because of the pandemic have also struggled to meet.

Currently, both Intel and Samsung compete with the world’s largest contract semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company.

Intel will invest tens of billions of dollars in expanding its business with its newly launched foundry and catching up with new chip fabrication processes after years of delays. Here, Intel announced it would re-enter the foundry business and announced plans to build new $80 billion production lines in Arizona and Ohio in line with the Biden administration’s policy of focusing on shaping into a semiconductor supply network in the United States. They also announced plans to catch up with TSMC and Samsung by mass-producing chip products through the 1.8 nm process starting in 2025.

Above all, Intel has lost Apple, a big customer. Apple started using its own CPUs for its Mac computers. On the other hand, Samsung is a strong player in the laptop and PC markets as well as in the mobile sector.

This means that Intel and Samsung can usher in a new era of computing through cooperation. A win-win relationship can be created through mutual cooperation not only in semiconductors but also in key technology products of each.

Meanwhile, Samsung has also pumped money into its chip businesses, producing more than a third of the global NAND flash memory chips. In short, the meeting between Lee and Gelsinger will be an opportunity to open the door to strengthen technology cooperation between Korea and the United States at the private level.