[2023 Semiconductor Outlook] Samsung and SK's Future Technology 'Super-Gap' Gamble... 'Computational' Memory and the 'World's Smallest' Foundry

Memory DRAM and Non-memory Areas Both Equipped with 'Computation'
Next Year Intel Server CPUs and Others Compete with 'DDR5'
Samsung Foundry Chases Two Goals: '3nm and GAA'

On July 25th, at Samsung Electronics Hwaseong Campus in Hwaseong-si, Gyeonggi Province, researchers shipped mass-produced 3-nanometer semiconductors based on the world's first GAA (Gate-All-Around) technology at the mass production shipment ceremony. The 3-nanometer process is the most advanced technology in semiconductor manufacturing, and GAA is also known as a next-generation core technology that enhances semiconductor efficiency through precise control.
/Hwaseong=Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Moon Chaeseok]

"The competition for next-generation product technologies such as high-value-added DDR5 (Double Data Rate) between Samsung Electronics and SK Hynix, which possess 'super-gap technology' leadership, will fully commence from next year. There is ample opportunity to seize a 'turnaround' in the semiconductor price decline trend."

K-semiconductor companies suffering from profitability deterioration due to the market downturn see overwhelming technological prowess as the weapon to directly overcome the semiconductor winter. They have judged that 'technology' is the card to break through uncertainties such as political variables like the US-China conflict and stock price fluctuations caused by worsening investment sentiment.

Samsung Electronics and SK Hynix have made a 'bold move' by launching innovative products equipped with 'computing' functions, which were previously considered the domain of non-memory semiconductors, in their main memory DRAM sector. They judged that merely reducing component size to improve product efficiency is insufficient. They foresee industries consuming vast amounts of data in the long term, such as machine learning, high-performance computing, and artificial intelligence (AI), and are releasing new products like PIM (Processing In Memory), DDR5, GDDR (Graphics Double Data Rate) 6, 4th generation HBM (High Bandwidth Memory) 3, and CXL (Compute Express Link).

The development of PIM semiconductors, which imbue memory semiconductors?previously just data storage components?with computing capabilities, marked the beginning of memory innovation. PIM semiconductors are next-generation intelligent memory semiconductors equipped with 'computing' abilities that were the domain of non-memory semiconductors such as CPUs (Central Processing Units) and GPUs (Graphics Processing Units). In this regard, Samsung Electronics attracted attention by developing the world's first AI-oriented 'HBM-PIM' semiconductor in January last year.

Attention is focused on the 'DDR (Double Data Rate) 5' product technology competition, which will intensify from next year. Experts such as Noh Jongwon, President of SK Hynix's business division, and Kim Yangpaeng, senior researcher at the Korea Institute for Industrial Economics & Trade, have mentioned that "competition will start from next year." The development speed of Samsung and SK semiconductors was so fast that finished products (sets) could not keep up with the specifications of components (DDR5). Interest has grown further with news that Intel's server CPU 'Sapphire Rapids' will be launched around January next year. DDR5 is expected to help improve profitability for both companies as it is up to 30% more expensive than the existing DDR4. It is considered a 'next-generation DRAM' that is more than twice as fast and consumes over 10% less power.

In terms of DDR5 product 'capacity,' SK Hynix developed the industry's first 32Gb (gigabit) DDR5-based product and delivered samples to customers on October 25. The 64Gb module certification was completed last August. The speed is about 6000 megabits per second (Mbps). In terms of 'interface,' Samsung notably developed CXL-based DRAM technology early in May last year and released a 512Gb CXL DRAM with four times the capacity this May. CXL is used in memory semiconductors, GPUs, AI accelerators, etc., significantly increasing memory capacity and data processing capabilities.

The competition to increase the number of layers in NAND flash is also expected to continue. Due to product characteristics, cells must be stacked vertically to increase data capacity, and the higher the number of layers, the more chips can be placed in the same area. SK Hynix announced at the 'Flash Memory Summit (FMS) 2022' held in Seattle, USA, last August that it succeeded in developing 238-layer NAND. They unveiled the 512Gb capacity TLC 4D NAND. Samsung Electronics also revealed the 1Tb (terabyte) 8th generation V-NAND early last month, stating it is a product that can stack more than 200 layers. The industry estimates the product layers to be 236.

In the foundry (semiconductor contract manufacturing) sector, fierce competition continues with Taiwan's TSMC and the US's Intel in 'ultra-fine process' technology. Currently, TSMC is first and Samsung second, but Intel is also striving to regain leadership in the foundry market it lost. Notably, Samsung Electronics has achieved both the 'ultra-fine leading-edge process' (3nm, where 1nm is one-billionth of a meter) and the 'process technology' (GAA, Gate-All-Around). Samsung announced on June 30 that it secured 3nm leading-edge technology applying the GAA process and will begin mass production.

TSMC declared on the 6th (local time) that it caught up with the 3nm process, but its process technology remains at the FinFET level. GAA allows current to flow on four sides, making it more efficient than FinFET, which only has three sides. The trend is toward 'processes below 3nm.' According to US market research firm Gartner, by around 2026, sales of foundry processes below 3nm are expected to reach $22.9 billion (approximately 30 trillion KRW), becoming the largest share. Additionally, Samsung Electronics revealed a concrete roadmap to mass-produce 1.7nm in 2027, but TSMC has not disclosed the mass production timeline for 1.7nm.

Foundry is an order-based industry, so if customer acquisition fails, revenue cannot be secured. Customer contracts are strictly confidential, but foundry sales levels allow estimation of order performance. Samsung Electronics shows confidence in this regard. According to Taiwan market research firm TrendForce's estimates of Samsung's foundry business sales, the second quarter recorded $5.588 billion (about 7.312 trillion KRW), setting a new record. This surpassed the $5.544 billion (about 7.254 trillion KRW) recorded in the fourth quarter of last year. Samsung Electronics stated, "At the current growth rate, we will reach a level capable of securing our own investment funds by 2025."