Samsung attempts chip technology jump

Samsung Electronics has been showing renewed aggression in advancing and employing processing technologies in computer memory chips. / Korea Times

Samsung Electronics’ souring relationship with Apple ― a friend in parts and foe in finished products ― appears to be causing the former to renew its urgency to advance its chip technology and find new customers.

According to industry sources, Samsung is planning to roll out a new range of computer memory chips by the end of the year using 25-nanometer processing technology. Market observers take this as a display of aggression amid whispers that the company is beginning to lose some of its dominance as a major chip provider to global electronics firms.

“Samsung has struggled to increase the output of its conventional memory chips built by 28-nanomter processing technology since beginning production last year. It now appears the company will jump phases to save costs and improve efficiency by moving to produce 25-nanometer chips ahead of schedule,’’ said one of the sources.

A spokesman refused to confirm the story.

The semiconductor chips of today have millions of minuscule electronic circuits, which are etched into a silicon disk on a nanometer (one billionth of a meter) scale. A smaller measurement means that the chip circuit contains thinner lines, thereby having more circuits and storage in the same amount of space. For example, a memory chip using 20-nanometer level technology is far better than a chip with 30-nano technology in terms of power consumption and cost.

In a conference call following its second quarter earnings results, Samsung said it planned to increase the proportion of its chips produced by 28-nanometer technology by 20 percent by the year’s end. This came as a disappointment to analysts, who were expecting a level somewhere near 40 percent.

Investor concerns were also raised by Apple’s increasingly cozy relationship with Japan’s Elpida Memory. Apple has been a major buyer of Samsung’s chips and screens, but the relationship between the two firms has become awkward as they became locked in an intellectual property battle regarding the design of smartphones and touch-screen tablets.

Samsung recently announced it developed a new chip for use in Apple’s upcoming iPhones and iPads ahead of schedule despite reports that Apple had shifted part of its supply chain to Elpida.

“As far as I know, Samsung is ready to apply the advanced technology. An early start in 25-nanometer processing will be more than enough to offset the company’s struggles to get 28-nanometer lines up and running,’’ said another source.

“The latest Samsung decision to produce chips with a 25-nanometer technology could also mean that the Korean firm still regards Apple as a critical business partner, as Apple is also pressuring suppliers to provide better quality products at lower prices.’’ <The Korea Times/Kim Yoo-chul>

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