Samsung Forms Alliance with IBM to Develop Non-Memory Chips

Strategic Insights -

Samsung Electronics Co., the world's largest maker of computer memory chips, has formed a strategic alliance with International Business Machines Corp. (IBM) and two other partners to develop non-memory chips. This tie-up marks Samsung's first notable step towards becoming a significant player in the lucrative non-memory chip sector, in which it has little presence. The agreement, reached between Samsung's Hwang Chang-kyu and IBM's John Kelly, will see the companies jointly develop non-memory chips using advanced technology, including 65 nanometer and 45 nanometer wires. Samsung plans to increase its spending on non-memory chips to 1.24 trillion won this year, and estimates that the alliance will generate $5 billion in new sales in 2007.

Key Takeaways:

  • Samsung Electronics has formed a strategic alliance with IBM, Chartered Semiconductor Manufacturing Ltd., and Infineon Technologies AG to develop non-memory chips.
  • The tie-up marks Samsung's first notable step towards becoming a significant player in the non-memory chip sector, where it has little presence.
  • The companies will jointly develop non-memory chips using advanced technology, including 65 nanometer and 45 nanometer wires.
  • IBM will provide technology for Samsung to produce non-memory chips with 90-nanometer wires on 300-millimeter silicon wafers.
  • Samsung plans to increase its spending on non-memory chips to 1.24 trillion won this year (approximately $1.06 billion).
  • The alliance is expected to generate $5 billion in new sales for Samsung in 2007.
  • Samsung's partnership with IBM is seen as a response to the company's competitor, Intel Corp., in the non-memory chip sector.

Statistics:

  • Samsung plans to increase its spending on non-memory chips to 1.24 trillion won this year (approximately $1.06 billion).
  • The alliance will generate $5 billion in new sales for Samsung in 2007.

Sources:

  • Yonhap (no date provided)
  • "Samsung Forms Alliance with IBM to Develop Non-Memory Chips"

(Asia Pulse, March 8, 2005)