Samsung takes on TSMC with new GlobalFoundries partnership

Samsung Electronics Co. (005930) and Globalfoundries Inc. are teaming up in the made-to-order chip business, an alliance aimed at stealing orders from Taiwan Semiconductor Manufacturing Co. Globalfoundries will license Samsung’s most advanced new chipmaking technology, called 14-nanometer FinFET, giving customers access to production at plants in Texas, New York state and South Korea. Terms of the accord weren’t disclosed. The companies are seeking to pose a bigger challenge to Taiwan Semiconductor, which last year controlled about half of the $38.9 billion chip-foundry business. Samsung and Globalfoundries are betting the advanced technology and scale they can offer together will help ensure they remain central in the market for building smartphone and tablet parts. “This offers a huge competitive threat to TSMC and provides an alternative to those companies who are looking to use leading-edge production,” said Jim McGregor, an analyst at Tirias Research. “It’s a huge deal.”