The competition between Samsung and TSMC has intensified not only in securing international IC design clients but also in the field of South Korean IC design companies. According to a report by ZDNet Korea, major South Korean AI semiconductor fabless companies, which previously used Samsung’s foundry facilities, are now diversifying their manufacturing by using TSMC’s fabs for new chip mass production.

Industry sources cited by ZDNet Korea reveal that FuriosaAI initially used Samsung’s 14nm process for its first-generation chip, “Warboy,” but switched to TSMC’s 5nm process for its second-generation chip, “Renegade.” Notably, Renegade became the first chip in South Korea’s AI semiconductor sector to utilize 2.5D packaging technology with CoWoS and HBM3 memory. FuriosaAI is also planning to use TSMC’s 5nm process for its next-generation chip, “RenegadeS,” set to launch in the fourth quarter.

Similarly, DeepX, after using Samsung’s foundry process, adopted TSMC’s technology for its latest chip development this year. The company’s “DX-V3” system-on-chip (SoC) is being developed using TSMC’s 12nm process, with a target to release samples later this year. DeepX’s earlier chips, the “DX-M1” AI accelerator and “DX-H1” AI server accelerator, were produced using Samsung’s 5nm process, while the “DX-V1” AI SoC solution was made with Samsung’s 28nm process. The “DX-M1” entered mass production last month. ZDNet Korea also reports that DeepX is currently discussing with Samsung the development of next-generation chips using processes more advanced than 5nm.

Another South Korean IC design company, Moblinet, is utilizing both Samsung and TSMC’s foundry services. Its first-generation chip, “Eris,” was manufactured using Samsung’s 14nm process and began mass production in March this year. The second-generation chip, “Regulus,” is being produced using TSMC’s 12nm process and is expected to launch next year after completing testing.

ZDNet Korea also cites industry experts who emphasize that Samsung’s foundry services need to not only focus on attracting large clients but also improve services for smaller fabless companies. Similar to how TSMC grew by nurturing partnerships with small fabless firms, Samsung should bolster its process technology and develop an ecosystem for IP and fabless companies.

According to TrendForce data, TSMC maintained a global foundry market share of 62.3% in the second quarter of this year, while Samsung held an 11.5% share.

Meanwhile, in the race for major international client orders, WCCFTECH reports that Qualcomm is pursuing a dual-sourcing strategy for its Snapdragon 8 Gen 5 chip, partnering with both TSMC and Samsung. Qualcomm has previously attempted this approach, but Samsung’s inconsistent yields thwarted the plan. Qualcomm is now reportedly considering TSMC’s 3nm ‘N3P’ technology for the high-performance variant of the Snapdragon 8 Gen 5, while Samsung’s SF2, also known as 2nm GAA, is expected to be used for a lower-end version.

(Photo credit: TSMC)

As the U.S. and its allies continue to impose technology restrictions on China’s semiconductor sector, Beijing has accelerated its efforts to develop homegrown alternatives. Chinese firms are aggressively pursuing advanced AI chip development, aiming to rival Nvidia, the global leader in AI semiconductors. A recent CNBC report highlighted seven Chinese companies to watch, including Huawei and Alibaba.

Huawei, the first of Nvidia’s Chinese challengers, is gaining attention with its new Ascend 910C AI chip, which is expected to compete with Nvidia’s H100.

Alibaba follows closely behind. After acquiring C-Sky Microsystems in 2018, the company integrated it with its in-house chip division to form T-Head. In 2019, T-Head launched its first AI inference chip, the Hanguang 800, which has since been deployed at scale in Alibaba’s hyperscale data centers.

Baidu ranks third with its self-developed AI chip, Kunlun. The chip has matured significantly, and in June, Baidu received a strategic investment from Beijing’s AI Industry Investment Fund, marking the first time a state-owned entity has invested in an AI chip firm, boosting Baidu’s growth prospects.

Biren Technology, in fourth, focuses on GPUs like Nvidia, with a software platform to build applications on top of its hardware. Biren’s Bili series of chips are designed for AI training in data centers. Last week, Biren registered for IPO guidance with the Shanghai Securities Regulatory Bureau, marking the start of its public listing journey.

Cambricon Technologies, ranked fifth, designs a wide range of semiconductors, from chips that train AI models to those running AI applications on devices. Known as China’s first AI chip stock, Cambricon has faced setbacks since being blacklisted by the U.S. in late 2022, with reports of large-scale layoffs last year.

Moore Threads, founded in 2020, is developing GPUs for training large AI models. Its data center product, MTT KUAE, integrates GPUs and is aimed at competing with Nvidia.

Enflame Technology, the seventh company on the list, positions itself as a domestic alternative to Nvidia, focusing on AI training chips for data centers. Enflame began IPO guidance on August 26, and is expected to list on the STAR Market alongside Biren either by the end of this year or early next year.

(Photo credit: Huawei)

According to a report from Korean media outlet BusinessKorea, Rebellions’ CTO Oh Jin-wook announced that the company will adjust its production plans, bypassing the initially planned Rebel ‘Single’ product to focus on the mass production of the Rebel Quad AI chip by the end of the year.

This chip, manufactured using Samsung’s 4nm process, will be equipped with four Samsung’s 12-stack 5th generation High Bandwidth Memory (HBM3e), by the end of the year, offering a total memory capacity of 144GB.

Per the report, Oh explained that the company decided to accelerate the release of Rebel Quad due to internal assessments.

He also emphasized the superior power efficiency of Rebel, stating that it has demonstrated more than four times the power efficiency compared to products from Groq, a competing NPU company in the U.S.

Per a report from Reuters, Rebellions has recently signed a formal merger agreement with Sapeon Korea. The merged entity will retain the name Rebellions, and the combined company is expected to be valued at over 1 trillion Korean won, aiming to strengthen its competitiveness in the global AI chip market.

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(Photo credit: Rebellions)

According to a report from Nikkei, Samsung Electronics, currently lagging behind SK hynix in the HBM market, is said to be betting on the next-generation CXL memory, with shipments expected to begin in the second half of this year, while anticipating the CXL memory to become the next rising star in AI.

CXL is a cache-coherent interconnect for memory expansion, which may maintain memory coherency between the CPU memory space and memory on attached devices, which allows resource sharing for higher performance.

The CXL module stacks DRAM layers and connects different semiconductor devices like GPUs and CPUs, expanding server memory capacity up to tenfold.

Choi Jang-seok, head of Samsung Electronics’ memory division, explained that CXL technology is comparable to merging wide roads, enabling the efficient transfer of large volumes of data.

As tech companies rush to develop AI models, existing data centers are gradually becoming unable to handle the enormous data processing demands.

As a result, companies are beginning to build larger-scale data centers, but this also significantly increases power consumption. On average, the energy required for a general AI to answer user queries is about ten times that of a traditional Google search.

Choi further highlighted that incorporating CXL technology allows for server expansion without the need for physical growth.

In 2021, Samsung became one of the first companies in the world to invest in the development of CXL. This June, Samsung announced that its CXL infrastructure had received certification from Red Hat.

Additionally, Samsung is a member of the CXL Consortium, which is composed of 15 tech companies, with Samsung being the only memory manufacturer among them. This positions Samsung to potentially gain an advantage in the CXL market.

While HBM remains the mainstream memory used in AI chipsets today, Choi Jang-seok anticipates that the CXL market will take off starting in 2027.

Since the surge in demand for NVIDIA’s AI chips, the HBM market has rapidly expanded. SK hynix, which was the first to develop HBM in 2013, has since secured the majority of NVIDIA’s orders, while Samsung has lagged in HBM technology.

Seeing Samsung’s bet on CXL, SK Group Chairman Chey Tae-won remarked that SK Hynix should not settle for the status quo and immediately start seriously considering the next generation of profit models.

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(Photo credit: Samsung)

As global tech giants race to develop AI infrastructure, according to a report from Yonhap News Agency, South Korea’s top 500 companies, driven by semiconductor leaders like Samsung and SK Hynix, have experienced a significant profit surge in the second quarter, more than doubling compared to the same period last year.

Reportedly, as per data released by the corporate evaluation website CEO Score on August 15th, among South Korea’s top 500 companies by revenue, 334 companies have reported their second-quarter earnings as of August 14th.

The combined net profit of these companies reached KRW 59.4 trillion (approximately USD 43.6 billion), marking a 107.1% increase compared to the KRW 28.7 trillion recorded during the same period last year, with their profits more than doubling year-over-year.

Their revenue in total, on the other hand, amounted to KRW 779.5 trillion, reflecting a 7% year-on-year growth from KRW 728.6 trillion during the same period last year.

This significant growth was driven by the booming HBM demand from tech giants like NVIDIA, the report notes.

According to the Q2 performance report released by Samsung Electronics, the company’s operating profit reached KRW 10.44 trillion (approximately USD 7.5 billion), surging from the KRW 668.5 billion recorded in the same period last year.

Thus, per the report, this surge has solidified Samsung’s position as the most profitable company among South Korea’s top 500 enterprises in the second quarter.

On the other hand, SK Hynix also turned a profit in the second quarter, recovering from a loss of KRW 2.9 trillion  in the same period last year, with an operating profit of KRW 5.5 trillion.

Reportedly, this strong performance helped SK Hynix to become South Korea’s second most profitable company, surpassing automotive giants Hyundai Motor and Kia Corp., which reported operating profits of KRW 4.3 trillion and KRW3.6 trillion in Q2,  respectively.

Meanwhile, SK On, the battery manufacturing arm of SK Group, recorded an operating loss of KRW 460.2 billion in the second quarter, marking the worst quarterly performance in the company’s history, dragged down by the global cooling demand for electric vehicles.

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(Photo credit: Samsung)