In an effort to strengthen the company’s system-on-chip business, Samsung has moved around 200 employees from its consumer electronics group to its System LSI business. The increase in the number of employees for the Systems LSI business is needed for the division to quickly adjust and compete in the rapidly growing semiconductor industry. It has been reported that the semiconductor business is already worth around $343.5 billion, of which around 77 percent is attributed to the SoC segment. By the year 2020, it is expected that the SoC component of the overall semiconductor industry will grow to $300 billion. Thus, it makes sense for Samsung Electronics to invest on its SoC business and try to corner a substantial portion of the rapidly-growing semiconductor market.
Aside from allocating more employees to its Systems LSI business, Samsung Electronics has made changes to its corporate structure in order to attract more customers. Recently, Samsung has promoted its foundry business into a separate business unit which ultimately resulted in the reduced control of the fabless division over the foundry. This was necessary to ease the fears of certain potential customers over the possibility of conflicts of interest. In addition, Samsung has made significant advances in the process node technologies of its foundry business. Samsung is the first foundry to produce chipsets at the 10-nanometer process node, which gave the company a significant advantage over its major rivals TSMC and GlobalFoundries. Moving forward, Samsung also hopes to be the first foundry to mass produce chips on the 7-nanometer process node using the Extreme Ultraviolet Lithography (EUL) technology.
As the SoC segment of the semiconductor industry is projected to rapidly grow over the next few years, Samsung’s competitors in the field are also making significant efforts to strengthen their position in the industry. In an effort to also attract more customers, SK Hynix, another South Korea-based memory chip manufacturer, has recently spun off its foundry unit. Meanwhile, chip manufacturer Intel has acquired Altera in 2015 for $17.6 billion in order to significantly boost its field-programmable gate array business. Its largest rival in the foundry business, TSMC, is also not resting on its laurels. The Taiwan-based foundry is ready to spend up to $15.7 billion to develop 3-nanometer and 2-nanometer process nodes and build the necessary production facilities to support these technologies.