Samsung Says New 7-Nanometer Chip Production Starting This Year

(Bloomberg) -- Samsung Electronics Co., trying to win business in the made-to-order chip production industry from Taiwan Semiconductor Manufacturing Co., said it will soon churn out processors based on an important new technology called 7 nanometer.

The world’s largest chipmaker said it will begin using the new technique this year, in time for mass production for customers next year. While that schedule is comparable with some competitors, the Korean company said it’s ahead in the mastery of a process that the industry’s been struggling with for years.

Samsung surpassed Intel Corp. in annual chip sales last year for the first time based on its dominance of the memory industry. It’s trying to spread its reach into the growing business of making chips for other companies. Apple Inc., Qualcomm Inc. and other technology giants design their own components and outsource manufacturing to companies like TSMC that compete based on how advanced their plants are.

The chip industry, in its fifth decade, is finding it increasingly hard to shrink the width of chip circuits -- the usual way to improved performance. Extreme ultraviolet lithography is a new technique that could sustain progress, but chipmakers have been been trying to perfect it for about a decade.

ASML Holding NV is the main supplier of EUV lithography machines, and Samsung is confident it has improved the output of this equipment enough for mass production. The Korean giant managed to make more than 1,000 disks of silicon using EUV each day, the company said at an event in Santa Clara, California, on Tuesday. The ability to use EUV, which eliminates production steps, separates Samsung from from its rivals, said Hong Hao, a company senior vice president.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr, Kara Wetzel

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