As the battle for dominance among semiconductor contract manufacturers intensifies, these foundries are ramping up their capital investments to meet client demands for cutting-edge production technology. TSMC recently announced a substantial increase in its capital expenditure (CapEx) for the coming year as it gears up to start manufacturing 2nm-class chips by next year. Intel is also expected to raise its CapEx, albeit more conservatively. In contrast, according to a report from TrendForce citing SEDaily, Samsung plans to significantly reduce its spending on its foundry operations.
For about a decade, Samsung has been investing billions annually in expanding its foundry and memory production capabilities. However, in a notable shift, Samsung Foundry is set to cut its CapEx by over 50% in 2024, committing only ₩5 trillion ($3.5 billion) compared to the ₩10 trillion ($7 billion) invested last year. The move reportedly stems from a decrease in client demand and a strategic focus on enhancing operational efficiency. Challenges in securing large clients have been attributed to delays in advanced manufacturing processes and yields that have not met expectations. It’s reported that the utilization of its 4–7nm-class lines in Pyeongtaek has dropped by more than 30%, although the specific timeframe for this decline was not detailed by SEDaily.
Looking ahead to 2025, Samsung Foundry will focus its investments on the Hwaseong S3 and Pyeongtaek P2 facilities. At S3, a section of the 3nm line will be upgraded to 2nm, a change described as a minor tweak rather than a significant new expenditure, following a rebranding of Samsung’s SF3P process technology to SF2. This adjustment reportedly needs fewer completely new tools for mass production. Meanwhile, the P2 facility is set to house a 1.4nm pilot line capable of processing 2,000–3,000 wafers per month by the end of 2025. Additional smaller investments will include upgrades to existing machinery and the development of support infrastructure at the Taylor plant in the U.S., focusing more on enhancing current facilities rather than expanding them.
Competitive Strategies Vary Among Leading Foundries
Contrasting with Samsung’s approach, TSMC disclosed last week its plans to increase its CapEx from $29.76 billion in 2024 to between $38 billion and $42 billion in 2025. About 70% of this budget will be allocated to advanced processing technologies, with 10% to 20% directed towards specialty technologies. The remainder will support advanced packaging, testing, mask-making, and other related operations.
TSMC is set to begin mass production of its N2 (2nm-class) technology in the latter half of 2025, with plans to scale up in 2026. The company noted that it anticipates more 2nm tapeouts than it had during similar phases of its N4 and N3 developments, necessitating an expansion in N2-capable facilities and equipment.
Intel, too, is on the brink of enhancing its production with its 18A manufacturing process later this year while preparing for future technologies and serving its Intel Foundry customers. TrendForce forecasts that Intel’s CapEx will rise from $11 billion to $13 billion in 2024 to between $12 billion and $14 billion in 2025. Although these figures are considerably lower than TSMC’s projected investments, they represent a significant increase compared to Samsung’s projected spending.
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Avery Carter explores the latest in tech and innovation, delivering stories that make cutting-edge advancements easy to understand. Passionate about the digital age, Avery connects global trends to everyday life.