Chip production battle heats up as Samsung announces 10nm plans

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Although we all see the fruits of the chip manufacturing battle in the form of sleeker, faster, longer running mobile devices, not many people are aware of just how intense the competition in the industry has become. Two of the biggest rivals, Samsung and TSMC, recently moved to 14nm/16nm production for newer devices, with Samsung leading the way. The ability of Samsung to jump ahead in shrinking the manufacturing process let it move the Samsung Galaxy S6 to its own Exynos chips and has it in the lead to produce chips for the Apple iPhone 7. Samsung hopes to retain that position by moving to a 10nm production method by the end of 2016.

Amidst the clamor of these two players, Intel is quietly sitting on the side where industry analysts believe the company is “ahead of everyone” when it comes to 10nm development. Whether Intel can capitalize on that development lead with some commercial success remains to be seen. Intel has not made any public statements about their 10nm plans, possibly in an effort to keep buyers interested in their 14nm processes.

Against Samsung’s announcement, TSMC has indicated they expect to start shipping 16nm chips later this year and will start testing 10nm chips by the end of this year and they too will have 10nm chips ready for production by the end of 2016.

With everyone targeting the end of 2016 for 10nm production, one big question will be manufacturing capacity. Besides speed to market, part of Samsung’s recent success was driven by their ability to meet expected demand. Samsung says they now have four facilities ramped up and producing 14nm wafers – two in Korea, one in Texas, and one in New York. Demand for new chips primarily comes from Apple and Qualcomm, the two largest buyers in the market.

Industry analysts point to high definition video demands, especially real-time live streaming, as a big factor in the recent drive for more powerful chips that consume less space and power. This has introduced some volatility to the manufacturers who are now racing to meet these new targets, which require significant capital investments, and looking for buyers with enough volume to justify the investments. The shorter life cycles between these changes is going to limit opportunities.

source: EE Times


About the Author: Jeff Causey

Raised in North Carolina, Jeff Causey is a licensed CPA in North Carolina. Jeff's past Android devices include an HTC EVO, a Samsung Note II, and an LG G3, and a Motorola Moto X Pure Edition along with a Samsung Galaxy Tablet 10.1. He currently uses a Samsung Galaxy S8 and (very rarely) a Nexus 7 (2013). He is also using a Verizon-branded Motorola Moto Z Play Droid supplied by his job. Jeff used to have a pair of Google Glass and a Moto 360 Sport in his stable of gadgets. Unfortunately, his wife and kids have all drunk the Apple Kool-Aid and have i-devices. Life at home often includes demonstrations of the superiority of his Android based devices. In his free time, Jeff is active in his church, a local MINI Cooper car club, and his daughter's soccer club. Jeff is married, has three kids, and a golden retriever.