Friday, June 9, 2017

Samsung is concentrating on its system-on-chip business

Samsung turned its foundry unit into a separate business last month, and it wants to strengthen its chip designing and production capabilities even further. To that end, it is being reported that the company recently relocated around 200 employees from its consumer electronics division to System LSI to focus on its system-on-chip (SoC) business. The global SoC market is expected to reach $300 billion by 2020.

At present, Samsung’s semiconductor business consists of three units: fabless, foundry, and memory. The separation of fabless and foundry units offers Samsung’s clients more trust when they outsource chip production to the company’s foundry unit. Moreover, the South Korean electronics giant unveiled the first 10nm mobile SoC and announced that it plans to start manufacturing 4nm chipsets by the end of 2020.

Now, the company is reportedly planning to hire at least 1,000 more employees until 2018 to improve its SoC businesses, both fabless and foundry. The company is doing so because it sees a bright future in these segments. According to a Gartner report, the global semiconductor market reached $343.5 billion last year, with memory and SoC segments accounting for 23% and 77%, respectively.

Hanwha Investment & Securities explained, “The significance of SoC is increasing as the focus of the industry is shifting towards mobile, automobile, data center and so on. Large-scale investment projects are likely to be launched one after another this year.” Even SK Hynix has spun off its foundry arm. Intel acquired Altera a couple of years ago for $17.6 billion to enhance its Field-Programmable Gate Array (FPGA) technology.