Samsung Electronics creates new contract chip manufacturing division

The logo of Samsung Electronics is seen at a company's building in Seoul South Korea

The logo of Samsung Electronics is seen at a company's building in Seoul South Korea

Samsung Electronics is splitting its semiconductor business in half in a bid to capitalise on growing interest in its chips.

It will continue to be overseen by Kim Ki-nam, Samsung's president overseeing all chip businesses.

The South Korean tech giant said last month it has finalized the development of second-generation 10-nanometer (nm) FinFET process technology, claiming the development will help the firm secure more foundry business partners.

The new division will make mobile processors and other non-memory chips for clients such as Qualcomm and Nvidia, competing with TSMC.

Rumoured for a while, the move to split the company in half will come as no real surprise to many business analysts.

Industry tracker IHS Markit estimates Samsung's foundry business posted sales of US$4.5 billion in 2016, up 78.6 percent from a year earlier. It is seen as a step towards the company's vision to expand its presence in the chip manufacturing sector in order to be a key global player.

Samsung has expanded its investment in the foundry business, including opening the world's 10-nanometer chip manufacturing plant past year. Samsung is now the fourth biggest company in the foundry sector, with Taiwan-based TSMC leading the way, followed by UMC and U.S. firm GlobalFoundries.