Tech giant Samsung's chairman Lee Jae-Yong is visiting the US, and insiders in the Korean industry speculate that his visit could lead to an investment in beleaguered chip manufacturer Intel's packaging business. Intel's shares rose last week after the US government announced a 10% stake in the firm, and the sources believe that Samsung's investment will seek to bolster the firm's competitive position versus TSMC due to the latter's significant packaging investments to cater to AI demand.
Samsung Chairman To Likely Announce Investment In Intel As Part Of US Trip
Intel and TSMC are the only high-end chip manufacturers in the world capable of advanced back-end-of-the-line (BEOL) chip manufacturing. BEOL refers to technologies that place a finished chip onto a complete package with memory and other components. It is a key feature of the AI supply chain since the AI GPUs and accelerators require copious amounts of power to function and have to be properly packaged to avoid disfunction.
Sources quoted by the Business Post believe that since Intel is capable of advanced hybrid bonding packaging, Samsung is interested in cooperating with the firm. Samsung's interest also stems from the fact that when the back and front-end chip production market share is combined, it lags Intel in the global chip fabrication market.
According to an insider quoted by the publication, Intel is licensing its glass substrate technology to generate revenue. The firm has been making these substrates for years, and a key glass substrate executive has also joined Samsung which lends credence to the reports of the two partnering up. However, rumors have reported that Intel has allegedly decided to stop investing in glass substrates, and if they are true, then it is likely that the US firm is seeking to raise capital for its glass substrate R&D.
Such a move will allow Intel to maintain an edge in a market it has led for years and focus on streamlining its ailing foundry business without having to fork out additional funds. The Business Post believes that Intel and Samsung could form a joint venture as part of their partnership, or Samsung could take an equity investment in Intel, like Softbank and the US government.
The two teaming up could provide both of them with a solid footing to compete with TSMC. TSMC is the world's largest contract chip manufacturer and controls the majority of the market share. While Samsung, unlike Intel, also offers leading-edge chip manufacturing technologies to external customers, it has lagged behind TSMC due to what some believe are disappointing yields and an inability to ship orders at scale.
A partnership between Intel and Samsung could see the former benefit from the latter's leading-edge contract chip production expertise, and the latter benefit from the former's lead in the packaging industry.
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