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Tech giant Samsung’s chairman Lee Jae-Yong is visiting the US, and insiders in the Korean industry speculate that his visit could lead to an investment in Intel’s packaging business. Intel’s shares rose last week after the US government announced a 10% stake in the firm, and sources believe that Samsung’s investment will bolster Intel’s competitive position against TSMC due to TSMC’s significant packaging investments for AI demand.
Samsung Chairman to Likely Announce Investment in Intel as Part of U.S. Trip
Intel and TSMC are the only high-end chip manufacturers capable of advanced back-end-of-the-line (BEOL) chip manufacturing. BEOL refers to technologies that place a finished chip onto a complete package with memory and other components. This is crucial for the AI supply chain, as AI GPUs and accelerators require substantial power and must be properly packaged to function correctly.
Insiders quoted by the Business Post believe Samsung is interested in partnering with Intel because Intel can produce advanced hybrid bonding packaging. Additionally, when combining back-end and front-end chip production market share, Intel outperforms Samsung in the global chip fabrication market.
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According to an insider quoted by the publication, Intel is licensing its glass substrate technology to generate revenue. The firm has been making these substrates for years, and a key executive in this area has joined Samsung, supporting reports of a potential partnership. Rumors also suggest that Intel may have decided to stop investing in glass substrates, which could mean Intel is seeking capital for its R&D.
This move would allow Intel to maintain a competitive edge and focus on improving its foundry business without additional funding. The Business Post believes that Intel and Samsung could form a joint venture or that Samsung might take an equity stake in Intel, similar to what Softbank and the US government have done.
A partnership between Intel and Samsung could provide both with a strong foundation to compete against TSMC. TSMC is the world’s largest contract chip manufacturer and controls most of the market share. While Samsung offers leading-edge chip manufacturing technologies for external customers, it has lagged behind TSMC due to some perceived yield issues and difficulty in scaling shipments.
An alliance between Intel and Samsung could allow the former to benefit from the latter’s advanced contract chip production expertise, while the latter could leverage the former’s dominance in packaging.
