Amidst Samsung Electronics's ongoing reform of its semiconductor operations, the conglomerate has decided to concentrate on developing its power semiconductor business. This strategic move aims to capitalize on the growing trend of electric vehicle (EV) adoption, following the company's exit from the non-core LED sector.
Shifting gears to power semiconductors
According to reports from several South Korean media outlets, including Financial News, Samsung's Device Solutions (DS) division has recently disbanded its LED business unit, reallocating personnel to focus on power semiconductors, Micro LED, memory, and other sectors.
The Samsung LED business unit was primarily responsible for lighting equipment LEDs, television LEDs, and automotive LEDs. However, South Korean regulations categorize "LED and similar lighting devices" as industries suitable for small and medium enterprises, restricting large players like Samsung from participating in the market and making it difficult to achieve profitability.
With the appointment of Choi Yong-Hyun as the new head of the DS division, a significant organizational restructuring was initiated, ultimately leading to the decision to terminate the LED business.
Conversely, Samsung is committed to cultivating its power semiconductor segment. At the beginning of 2023, the firm established a special task force for power semiconductors, and by the end of the year, through further organizational adjustments, transformed the LED business unit into a power semiconductor business unit. Power semiconductors are essential in the electric vehicle market, particularly SiC and GaNcompound semiconductors that can withstand high temperatures and pressures.
In June 2023, Samsung announced at a wafer foundry forum its goal to provide 8-inch GaN power semiconductor wafer foundry services for consumer products, data centers, and mobile markets by 2025. Recent reports from ZD Net Korea indicate that Samsung will begin introducing organic metal chemical vapor deposition (MOCVD) equipment from Aixtron in Germany at its Giheung factory in South Korea in the second quarter of 2024, marking a crucial step towards mass production of GaN power semiconductors.
Getting ahead of the game
Although demand for electric vehicles is currently experiencing stagnation, the market is expected to expand in the mid to long term, with the power semiconductor market size projected to grow rapidly. Companies like Hyundai Motor, which actively promotes EV adoption, are also investing in power semiconductor design, making corresponding foundry technology crucial.
Industry insiders note that just as SK Hynix has benefited from the expansion of the AI market with significantly improved profitability from HBM, Samsung could potentially create a new growth driver if it can master next-generation technologies during the early stages of power semiconductor development, coupled with the widespread adoption of electric vehicles.
Article translated by Jerry Chen
