Samsung aims to make the world's most innovative chips in 5 years, as it plays catch up with TSMC

Samsung aims to make the world's most innovative chips in 5 years, as it plays catch up with TSMC

Samsung said Tuesday it aims to make some of the maximum advanced semiconductors in the world in five years' time, as the race among the South Korean electronics giant and the world's major chip maker TSMC heats up.

The corporation laid out a roadmap for its chip manufacture plans, and said it will begin production chips with a 2-nanometer process in 2025 and 1.4 nanometer process in 2027.

The nanometer figure mentions to the size of each individual transistor on a chip. The lesser the transistor, the more of them can be full onto a single semiconductor. Typically, a reduction in nanometer size can yield more authoritative and efficient chips.

For assessment, the processor in Apple's latest iPhone 14 Pro and Pro Max models is a 4-nanometer chip.

Samsung began manufacturing 3 nanometer chips earlier this year.

Stocks of Samsung in South Korea closed nearly 4% higher on Tuesday.

The South Korean firm, known for consumer electronics and memory chips, is looking to ramp up its contract chipmaking, or foundry business, in a bid to catch up with Taiwan's TSMC.

Samsung is the second-biggest foundry globally by income, with a 17.3% market part compared to 52.9% for TSMC, according to Trend Force.

For its part, TSMC imagines to begin 3nm chip manufacture this year with production of 2nm set to begin in 2025. However, the company has not authoritatively announced plans to mass produce 1.4nm chips.

"This is the first time that SEC (Samsung Electronics) guides for its long-term foundry roadmap and I think it is more aggressive than TSMC and market expectations," SK Kim, analyst at Daiwa Capital Marketplaces, told CNBC.

Samsung's ambitious plans originate amid global economic headwinds and signs of a go-slow in semiconductor demand. Global chip industry sales fell 3.4% in August associated to July, according to the U.S.-based Semiconductor Industry Overtone.

Contempt this, Samsung said it plans to expand its manufacture capacity for the most progressive chips by more than three times by 2027 related to this year, highlighting its bullishness on future demand.

These comprise its factories in the U.S. Samsung has a plant in Austin, Texas, and is currently building a $17 billion ability in Taylor in the same state.

Washington has been look to attract chipmakers like Samsung and TSMC to set up workshops in the U.S. so that it can reduce reliance on the manufacturing hubs of Taiwan and South Korea.

Though Samsung has put a big focus on cutting edge chips, the corporation also said semiconductors for high-performance computation, automotive and 5G uses will make up more than 50% of its foundry occupational by 2027. These are usually less cutting-edge chips.