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Samsung Electronics, the world’s largest maker of DRAM and flash memory, reportedly plans to dramatically expand its foundry business in order to eventually rival companies like Taiwan Semiconductor Manufacturing Company, United Microelectronics Corp. and so on.

South Korean news-paper Chosun Ilbo quoted a Samsung Electronics spokesman saying that the company had decided to expand its foundry production as a "future growth engine with the long-term goal of becoming as big as the world's number one TSMC”, reports EETimes web-site. Samsung already makes certain amount of chips on contract basis for its partners, but the company has never been considered as a serious foundry services provider. According to some estimations, Samsung’s foundry business revenues were only $385 million in 2007. 

The foundry market is growing faster than DRAM and flash markets and it is hardly a surprise that Samsung is interested in becoming a significant player on this market. Another incentive for the company may be intention to speed up employment of newer process technologies and manufacturing equipment in order to make its own chips more competitive. Offering foundry services ensures that Samsung’s fabs are fully utilized and, therefore, makes them more efficient from economic point of view.

Many traditional makers of chips are going to cease development of new process technologies and eventually plan to withdraw from actual manufacturing. As a result, the foundry market is projected to grow rather quickly. Being the world’s second largest maker of semiconductors, Samsung will indisputably continue to produce chips and it may be natural for the company to become a big contract maker.

Tags: Samsung, Semiconductor, Business, TSMC, Globalfoundries, UMC

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