Shown above is the foundry facilities Samsung Electronics in Austin, United States. Samsung plans to invest 240 trillion won over the next three years to strengthen its competitiveness in such areas as semiconductors and AI. Photo courtesy of Samsung Electronics

Taiwan’s TSMC may have to sweat

South Korea’s largest conglomerate Samsung Group announced this week that it will invest 240 trillion won ($205 billion) over the next three years in such areas as semiconductors and AI.

The investment plan was disclosed around 10 days after Samsung tycoon Lee Jae-yong was paroled. He was imprisoned early this year for bribing former President Park Geun-hye for the smooth succession.

The group did not specify how much it will channel for each sector, but a substantial part of it is expected to be directed to semiconductors for its iconic unit Samsung Electronics.

The Seoul-based company is the world’s dominant memory chip maker, but when it comes to the foundry business, it has been a distant runner-up.

Taiwan’s TSMC accounts for more than a half of the foundry market, while the market share of Samsung is less than 20 percent, which experts said led to the global shortage of automotive chips.

“TSMC is ruling the foundry business, and its almost monopolistic position is one of the major causes for the lack of automotive chips this year,” Prof. Kim Pil-soo at Daelim University said.

“As Samsung vows to increase its foundry business through aggressive investment, its action would help ease the chip shortage. TSMC may have to sweat.”

Indeed, Samsung Electronics announced last year that it will funnel 171 trillion won in the logic chip and foundry sectors over the next decade to become the market leader.

On top of semiconductors, Samsung also said that it will focus on such promising areas as biosimilars, AI, next-generation telecom networks, and robotics.

“Up to 75 percent of the investments will be made in Korea. Based on the investments, we strive to create 40,000 jobs over the next three years,” a Samsung official said.

As of the end of this June, Samsung Electronics alone had more than 110,000 on its payroll. Other Samsung units like Samsung SDI and Samsung Life Insurance are also large-sized employers of the country.