Samsung's new foundry plant in Texas partners with US AI chip design firm

This photo, taken by Kyung Kye-hyun, CEO of Samsung Electronics' Device Solutions Division, on July 14, shows Samsung Electronics' foundry plant in Taylor, Texas, is under construction. Groq, a U.S. chip design company, said Tuesday (local time) that it agreed to produce its chip at Samsung's Taylor foundry plant. Captured from Kyung's Instagram

By Baek Byung-yeul

Samsung Electronics' contract-based chip manufacturing foundry plant in Taylor, Texas, secured its first customer as Groq, a U.S.-based AI chip design company, announced that it has ordered the Korean chip maker to produce its next-generation AI chip, Tuesday (local time).

Groq said it is partnering with Samsung to produce its latency processing unit (LPU) chip, an AI accelerator chip, on a 4-nanometer process at Samsung's foundry plant in Taylor. The plant is now under construction, with plans to be completed by the end of this year.

This U.S. company was founded by former Google engineers in 2016 and has introduced its LPU chip, a type of AI chip with an engine that maximizes the use of memory bandwidth to perform high-speed computations.

With Groq's announcement, Samsung officially secured its first customer for the Taylor plant. In addition to its existing foundry in Austin, Texas, Samsung is investing $17 billion to build the plant in Taylor that will produce cutting-edge semiconductors using the latest manufacturing processes to expand its presence in the growing foundry market.

Samsung expects the Taylor plant will play a pivotal role in the lucrative AI market as the plant is located in the U.S. where cutting-edge AI chip design firms are gathered.

“We will start mass-producing 4-nanometer process products at the Taylor plant by the end of 2024,” Kyung Kye-hyun, CEO of Samsung Electronics' Device Solutions Division, said in an Instagram post last month. “We expect our major clients in the U.S. to produce their products here.”

In the foundry business, Samsung is expanding its presence by increasing the yield rate of its 4-nanometer manufacturing process.

“The second-generation 4-nanometer products are being mass-produced with a stable yield rate. It is expected that the company is able to achieve the mass production target for the third-generation products using 4-nanometer in the fourth quarter,” the company said in its semi-annual report, Aug. 14.

To further increase its investment capability in the semiconductor sector, Samsung recently sold part of its stake in Dutch semiconductor equipment maker ASML.

According to its semi-annual report, the company's stake in ASML was reduced from 1.6 percent in the first quarter to 0.7 percent in the second quarter. With the sale of the stake in ASML, the company is expected to have netted around 3 trillion won ($2.24 billion) in cash.

Samsung purchased a 3 percent stake in ASML, which makes EUV equipment used to produce advanced chips, for 363 billion won in 2012. In 2016, Samsung sold 1.4 percent of its shares in ASML to cash out about 750 billion won.

Samsung is forecast to use the funds from the stock sales to invest more in building semiconductor lines as the company is building large-scale chip production lines in Taylor as well as closer to home in Pyeongtaek, Gyeonggi Province.