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Huawei Ban Intensifies Competition Between Samsung And TSMC

The US’s ban on Huawei Technologies and its affiliates has set the stage for more intense competition between Samsung Electronics and Taiwan Semiconductor Manufacturing Co. (TSMC) in the processing chips industry.

Following the ban, Samsung has moved quickly to fill the void in suppliers, building new production lines in Pyeongtaek, South Korea, which are set to begin producing 5-nanometre chips in the second half of 2021. “This new production facility will expand Samsung’s manufacturing capabilities for sub-5nm process and enable us to rapidly respond to the increasing demand for EUV-based solutions,” said Dr. ES Jung, President and Head of Foundry Business at Samsung Electronics.

The company’s production lines in Hwaseong, also in South Korea, will commence producing chips later this year.

In total, Samsung has stated it will invest KRW1 trillion (A$1.2 billion) in its chips business by 2030.

By contrast, the US ruling hampers TSMC’s prospects, as the Taiwan-based manufacturer is Huawei’s main chips producer. Potentially to mitigate this loss in business, last week TSMC unveiled plans to build and operate a $12-billion cutting-edge chip factory.

“Samsung is definitely a formidable rival for TSMC,” Eric Chen, a veteran semiconductor analyst and managing partner of Cornucopia Capital Partner, told Nikkei Asian Review. “However, Samsung is also a huge empire making electronic devices. No single tech company or chip developer in the world will hope to source many of crucial chip components from its rival, or potential rival. That’s always an issue with Samsung.”

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