Samsung Electronics creates new contract chip manufacturing division

Samsung Electronics creates new contract chip manufacturing division

Samsung Electronics creates new contract chip manufacturing division

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.