Samsung Elec Starts 3-Nanometer Chip Production to Lure New Foundry Customers

This undated handout photo provided by Samsung Electronics on June 30, 2022 shows leaders of Samsung Foundry Business and Semiconductor R&D Center posing to celebrate the company's first production of 3-nanometer process chips at its semiconductor facility of Samsung Electronics Hwaseong Campus in Hwaseong. (Samsung Electronics / AFP)
This undated handout photo provided by Samsung Electronics on June 30, 2022 shows leaders of Samsung Foundry Business and Semiconductor R&D Center posing to celebrate the company's first production of 3-nanometer process chips at its semiconductor facility of Samsung Electronics Hwaseong Campus in Hwaseong. (Samsung Electronics / AFP)
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Samsung Elec Starts 3-Nanometer Chip Production to Lure New Foundry Customers

This undated handout photo provided by Samsung Electronics on June 30, 2022 shows leaders of Samsung Foundry Business and Semiconductor R&D Center posing to celebrate the company's first production of 3-nanometer process chips at its semiconductor facility of Samsung Electronics Hwaseong Campus in Hwaseong. (Samsung Electronics / AFP)
This undated handout photo provided by Samsung Electronics on June 30, 2022 shows leaders of Samsung Foundry Business and Semiconductor R&D Center posing to celebrate the company's first production of 3-nanometer process chips at its semiconductor facility of Samsung Electronics Hwaseong Campus in Hwaseong. (Samsung Electronics / AFP)

Samsung Electronics Co Ltd said on Thursday it has begun mass producing chips with advanced 3-nanometer technology, the first to do so globally, as it seeks new clients to catch far bigger rival TSMC in contract chip manufacturing.

Compared with conventional 5-nanometer chips, the newly developed first-gen 3-nanometer process can reduce power consumption by up to 45%, improve performance by 23%, and reduce area by 16%, Samsung said in a statement.

The South Korean firm did not name clients for its latest foundry technology, which supplies made-to-order chips like mobile processors and high-performance computing chips, and analysts said Samsung itself and Chinese companies are expected to be among the initial customers.

Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54% of the global market for contract production of chips, used by firms such as Apple and Qualcomm which don't have their own semiconductor facilities.

Samsung, a distant second with a 16.3% market share, according to data provider TrendForce, announced a 171 trillion won ($132 billion) investment plan last year to overtake TSMC as the world's top logic chipmaker by 2030.

"We will continue active innovation in competitive technology development," said Siyoung Choi, Head of Foundry Business at Samsung.

Samsung Co-CEO Kyung Kye-hyun said earlier this year its foundry business would look for new clients in China, where it expects high market growth, as companies from automakers to appliance goods manufacturers rush to secure capacity to address persistent global chip shortages.

While Samsung is the first to production with 3-nanometer chip production, TSMC is planning 2-nanometer volume production in 2025.

Samsung is the market leader in memory chips, but it had been outspent by frontrunner TSMC in the more diverse foundry business, making it difficult to compete, analysts said.

"Non-memory is different, there's too much variety," said Kim Yang-jae, analyst at Daol Investment & Securities.

"There are only two kinds of memory chips - DRAM and NAND Flash. You can concentrate on one thing, raise efficiency and make a lot of it, but you can't do that with a thousand different non-memory chips."

Samsung's compound annual growth rate (CAGR) of capital spending between 2017 and 2023, which measures how quickly a company is increasing its investment, is estimated at 7.9%, versus TSMC's estimated 30.4%, according to Mirae Asset Securities.

Samsung's efforts to compete with the industry leader have also been hampered by less-than-expected yields of older chips during the past year or so, analysts said. The company said in March that its operations have shown a gradual improvement.



Downloads of DeepSeek's AI Apps Paused in South Korea Over Privacy Concerns 

People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)
People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)
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Downloads of DeepSeek's AI Apps Paused in South Korea Over Privacy Concerns 

People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)
People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)

DeepSeek, a Chinese artificial intelligence startup, has temporarily paused downloads of its chatbot apps in South Korea while it works with local authorities to address privacy concerns, South Korean officials said Monday.

South Korea’s Personal Information Protection Commission said DeepSeek’s apps were removed from the local versions of Apple’s App Store and Google Play on Saturday evening and that the company agreed to work with the agency to strengthen privacy protections before relaunching the apps.

The action does not affect users who have already downloaded DeepSeek on their phones or use it on personal computers. Nam Seok, director of the South Korean commission’s investigation division, advised South Korean users of DeepSeek to delete the app from their devices or avoid entering personal information into the tool until the issues are resolved.

DeepSeek got worldwide attention last month when it claimed it built its popular chatbot at a fraction of the cost of those made by US companies. The resulting frenzy upended markets and fueled debates over competition between the US and China in developing AI technology.

Many South Korean government agencies and companies have either blocked DeepSeek from their networks or prohibited employees from using the app for work, amid worries that the AI model was gathering too much sensitive information.

The South Korean privacy commission, which began reviewing DeepSeek’s services last month, found that the company lacked transparency about third-party data transfers and potentially collected excessive personal information, Nam said.

Nam said the commission did not have an estimate on the number of DeepSeek users in South Korea. A recent analysis by Wiseapp Retail found that DeepSeek was used by about 1.2 million smartphone users in South Korea during the fourth week of January, emerging as the second-most-popular AI model behind ChatGPT.