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Intel seeks foundry alliance with Samsung, says report

Intel seeks foundry alliance with Samsung, says report

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By Peter Clarke

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Intel CEO Pat Gelsinger has requested an in-person meeting with Samsung Electronics’ chair Lee Jae-yong to discuss “comprehensive cooperation measures in the foundry sector,” according to Korea’s Maeil Business newspaper.

If established, an Intel-Samsung foundry alliance would enable the exchange of manufacturing process technologies, sharing of production facilities around the world and R&D collaboration, the report said.

The motivation behind such an alliance would be to try and counter the outstanding success achieved by TSMC at the 5nm and 3nm processing nodes. There have been rumors that Intel and Samsung have struggled to win any customers with their respective 3nm GAA and 20A nodes in competition against TSMC. Intel has now jumped to its 18A process but was reportedly struggling to pass qualification with Broadcom, a potential foundry customer.

AI is not a bubble and TSMC is not a monopolist, says Wei

For many years Intel was the semiconductor technology and market leader with sales driven by its x86 processor dominance in PCs. However, over the last decade or so the company has fallen behind in chip making and failed to enter the smartphone application processor market or to compete with Nvidia in AI. Having been an integrated device manufacturer (IDM) Intel is a relatively recent and inconsistent entrant into the foundry market.

Samsung is also an IDM and the market leader in memory chips but it too has struggled to persuade customers that its logic manufacturing processes offered as a foundry are competitive with those of TSMC. As the technology gap with TSMC has widened Samsung senior management took the unusual step of apologizing to customers, investors and employees as part of the delivery of recent financial results.

“The leadership team at Samsung Electronics wishes to apologise for not meeting your expectations with our performance. We have caused concerns about our technical competitiveness, with some talking about the crisis facing Samsung. As leaders of the business, we take full responsibility for this,” Young Hyun Jun, the head of Samsung’s chip division, wrote in a letter.

The Maeil Business newspaper said that on Monday October 21 a high-ranking Intel executive asked Samsung Electronics to consider setting up a meeting between the two top executives of the companies.

An alliance could be the beginning of resource sharing between Intel and Samsung or it could represent the beginning of an attempt by Intel to dispose of its manufacturing operations. The latter is something observers have been discussing as a next step for the former chip market leader as it produced a series of weak financial results in 2024.

Intel considers foundry split, fab cancellations

TSMC held 62.3 percent foundry market share in the 2Q24 with Samsung ranked second with 11.5 percent, according to TrendForce. Intel did appear in the market researcher’s top-ten ranking.

Samsung has overseas manufacturing facilities in China and the US but has reportedly been pushing out its orders for EUV lithography equipment due to a lack of demand for its leading-edge wafer processes services.

Litho equipment vendor ASML trims sales forecast on fab push-outs

Intel has overseas wafer fabs in Ireland and Israel but as had to postpone the building of two fabs in Magdeburg, Germany due to financial stresses within the loss-making company.

 A foundry and manufacturing process technology alliance could at least allow the two companies to achieve greater economies of scale in their manufacturing operations.

Neither Samsung Electronics nor Intel would confirm any meetings between top officials, the Maeil Business reported.

Related links and articles:

www.intel.com

www.samsung.com

www.tsmc.com

https://pulse.mk.co.kr/news/all/11146690

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