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Samsung licenses 3D chip manufacturing tech to GlobalFoundries to win more orders

Customers attend a workshop about the Samsung Galaxy S5 in Jakarta, April 11, 2014.REUTERS/Beawiharta
Customers attend a workshop about the Samsung Galaxy S5 in Jakarta, April 11, 2014.REUTERS/Beawiharta

SEOUL (Reuters) - Samsung Electronics Co said on Friday it would license its latest chip manufacturing technology to U.S. firm GlobalFoundries, a move that would help it expand production as it vies with bigger rival TSMC for orders from customers like Apple Inc.

Samsung, the world's biggest maker of memory chips, wants to grow its foundry chip manufacturing and mobile processing chips business to match rising demand from smartphone makers. Its ambitions have been hampered by a late start in a rapidly changing industry and the dominance of TSMC, the preferred supplier for most customers.

In a statement, Samsung said it had agreed to license its 3-dimentional chip manufacturing technology, called FinFET, to New York-based GlobalFoundries, the world's second-largest contract chipmaker.

Samsung also said it plans to begin mass production of foundry chips using the 14-nanometer FinFET technology in the fourth quarter.

3D chips are much smaller in size than flat counterparts. They also lower power consumption by up to 35 percent and enhance performance by 20 percent, Samsung said.

Rival TSMC, which mainly uses 28-nanometer processing technology, just started manufacturing the smaller 20-nanometre chips in the March quarter. It is also developing technology aimed at making even smaller 16-nanometre FinFET chips.

On Thursday, TSMC reported its 8th straight quarter of profit growth, as the Taiwanese company booked wider profit margins following a boost in demand from mobile device makers.

Contract chipmakers like Samsung and TSMC vie to win orders from companies such as Qualcomm Inc, Texas Instruments Inc and Nvidia Corp, which in turn sell their own version of the chips to smartphone and tablet makers.

Korean media this week quoted the head of Samsung's component business Kwon Oh-hyun as saying in an internal memo that its foundry and mobile processing chip making business is now "in crisis", and urged the company to move quickly to finer processing technology.

Samsung declined to comment on the reports.

(Reporting by Miyoung Kim; Editing by Miral Fahmy)

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