South Korea's chipmakers are expanding their foundry businesses in line with rising global demand amid the fourth industrial revolution that centers on the information and communication technologies, industry watchers said Wednesday.

The foundry business refers to making chip designs for other companies that do not have a semiconductor fabrication plant.

Last month, Samsung opened a new department under its chip division focusing on the foundry business, as part of its efforts to expand its market presence in the sector. Samsung's chipmaking business unit has a three-pronged structure -- the semiconductor business, namely memory, the system LSI and the foundry.

The move was seen as Samsung's devotion to tap deeper into the foundry sector where the world's No. 1 maker of memory chips takes up around 6 percent of the combined market.

"Samsung's competitiveness in the foundry business has been expanding," Doh Hyun-woo, a researcher at Mirae Asset, said in a report. "It has started to outpace its rival Taiwan-based TSMC in 10-nanometer production."

The researcher added Samsung's competitiveness is anticipated to grow down the road backed by its aggressive investment.

South Korea's No. 2 chipmaker SK hynix Inc. also spun off its foundry business last month in order to beef up its competitiveness in the sector.

Industry watchers said demand for chips will further increase down the road as the fourth industrial revolution will speed up the development of the Internet of Things, big data and artificial intelligence technologies, which are all deeply linked to chips.

The foundry business is also significant for both Samsung and SK hynix as they need to reduce dependency on the smartphone business and tap into new areas, such as self-driving automobiles for sustainable growth, industry watchers added.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved