Samsung to Invest a Mammoth $115 Billion by 2030 to Obtain an Edge in Mobile Chips and Take on Qualcomm, Apple, and Huawei
Samsung, which is already the number one memory chip maker in the world, has now decided that it wants to be at the forefront of the logic chip development too. To support its ambitions, the company has announced a 10-year plan, over the course of which approximately $115 billion would be spent on processors. Most of you are familiar with Samsung’s in-house chip development ventures.
The Korean giant pumps millions to make efficient and powerful SoCs for mobile devices, and it’s also entered the mobile connectivity business with its Exynos 5100 5G modem. With the amount being invested over the course of the next decade, Samsung very well wants to compete against the likes of Qualcomm, Apple, and Huawei.
Samsung to Inject $9.6 Billion Into Its Chip Business Each Year to Become the Number One Logic Chip Maker by 2030
The multi-billion investment would be allocated equally each year until 2030, which means the South Korean giant would be spending roughly $9.6 billion each year on the development of processors. Apart from research and development, the new investment will also support the development of foundries and the creation of 15,000 new jobs. So, in addition to upping its processor game, the chaebol is also reportedly aiming to take on the Taiwan Semiconductor Manufacturing (TSMC), which manufactures chip for other companies.
Samsung currently has a 19 percent market share in contract chip manufacturing. The market leader TSMC plans to spend upwards of $10 billion this year, which is roughly the same as Samsung’s planned expenditure. Of course, investment is no guarantee that the South Korean giant will actually be able to challenge the other established players. However, given that the investment is spread out over a 10-year period, it’s clear that the company will play it nice and steady and may ultimately catch up with the likes of Qualcomm, Apple, and Huawei.
While Samsung’s Exynos processors match up to Qualcomm’s Snapdragon chipsets in certain aspects, there is still a room for improvement, particularly in the graphics and modems department. Samsung’s chips have nothing on Apple’s A-series processors, which are said to provide desktop-level performance on mobile devices. The development of in-house chips can also mean several smartphone OEMs might just ship to Samsung’s camp if they feel Qualcomm’s offerings are don’t have much to offer.
In recent years, Samsung has seen its smartphone profits plunge and while the company’s semiconductor unit accounted for 75 percent of its 2018 operating income, the memory chip market is very volatile. This can be one reason why the company wants to focus more on chips that could go on to fuel autonomous vehicles as well as AI devices, in addition to its smartphones. Diversifying its business can help Samsung reduce losses from its smartphone and tablet division.
The Korean manufacturer will also continue to supply Apple with the bulk of OLED screens, but with more partners added into the fold, Samsung shouldn’t expect to enjoy the same profits from its display manufacturing division as it did when Apple launched the iPhone X back in 2017.
News Source: Samsung