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Samsung’s Partnership with IBM Can Help It Compete with TSMC


Dec. 20 2018, Updated 1:11 p.m. ET

Samsung and TSMC are the only two players currently producing 7-nanometer chips

In our earlier article IBM Partners with Samsung for Cutting-Edge Chip Technology, we discussed how IBM (IBM) is looking to grow its Systems segment’s revenue through its partnership with Samsung (SSNLF). But let’s see how Samsung will benefit from this deal.

According to the press release, Samsung will manufacture 7-nanometer (7nm) microprocessors for IBM hardware and cloud solutions. Through this partnership, Samsung gets an opportunity to compete with Taiwan Semiconductor Manufacturing Company (TSM), which is the only other player currently producing 7nm nodes. Samsung started 7nm chip production in October, but TSMC has a first mover advantage in this field.

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Intel (INTC) announced that it will delay the launch of 10-nanometer products to the end of next year, easing some competitive pressure on Samsung. AMD (AMD), on the other hand, is expected to launch its second generation of EPYC server CPUs and Vega server GPUs early next year. These chips from AMD will be based on TSMC’s 7nm node technology. So the partnership with IBM gives Samsung a chance to take some share away from TSMC in this market.


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