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Samsung stands to benefit from Intel outsourcing chip production

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US tech giant Intel. AFP

Samsung stands to benefit from Intel outsourcing chip production

South Korea’s Samsung Electronics stands to benefit from US tech giant Intel’s chip outsourcing plan, industry sources said on January 22.

Intel’s incoming CEO Pat Gelsinger said during an earnings call on January 21 that the company is likely to increase use of outside chip factories “for certain technologies and products”.

The CEO’s remarks came after a news report that Samsung had bagged an order to produce Intel’s Southbridge chipset, one of two controlling chips in the core logic chipset on a personal computer motherboard.

Samsung is likely to produce them at its foundry plant in Austin, Texas, which has a line equipped with 14-nanomter (-nm) process technology, the report by SemiAccurate said. It said the order volume would be equivalent to 15,000 wafers per month.

There were speculations that Samsung would expand the Austin plant as the Korean tech giant had increased its purchase of new land there.

Intel’s outsourcing scheme appears to include Samsung’s rival, TSMC, as well. Other reports suggested that the Taiwanese company’s 7-nm process node will produce Intel’s graphics units.

The reported deal, if true, would raise the likelihood of Samsung getting additional orders from Intel, market watchers say.

“It could be the beginning of cooperation between Samsung and Intel,” said Kim Seon-woo, analyst at Meritz Securities. “If Samsung ramps up its Austin plant with 5-nm process, it could win high-value added chipset orders.”

THE KOREA HERALD/ASIA NEWS NETWORK

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