Industry sources believe that Samsung Electronics is seeking to boost its system LSI operations in addition to its ambition in the memory segment. The leader in DRAM and NAND flash memory production looks to expand its share of the foundry pie, vying for more outsourcing orders from Qualcomm, according to the sources.

Qualcomm is among the major customers of Samsung's system LSI unit, which includes Texas Instruments (TI) and Xilinx, the sources said.

Samsung is capable of manufacturing logic devices on a 45nm node, making it already a threat to United Microelectronics Corporation (UMC), the sources claimed. There is evidence that Samsung has taken outsourcing orders for 45nm FPGAs from Xilinx, which used to work with UMC, the sources added.

But the sources do not expect to see Samsung pose a threat to Taiwan Semiconductor Manufacturing Company (TSMC) until 2012. The market leader remains a major foundry partner for Qualcomm.

The sources also revealed that Samsung plans to increase its foundry capacity to 40,000 8-inch equivalent wafers per quarter at the end of 2010, up from 27,000 units at present. Samsung's foundry capacity may reach 125,000 8-inch equivalent wafers a quarter at the end of 2011, and rise further to 200,000 at end-2012, the sources indicated.

Samsung's projected investment in its logic foundry business in 2010 lags behind only TSMC's reported US$4.8 billion and Globalfoundries' US$2.5 billion, Digitimes Research analyst Nobunaga Chai commented. Samsung is likely to make a huge push at the high-end of the foundry business to catch up with the two major players, Chai noted.

Samsung recently revealed plans to allocate a budget of two trillion won (US$1.7 billion) for its system LSI operation in 2010, The figure was upwardly revised from an original goal of 1.3 trillion won, and is 300% higher than the 500 billion won spent in 2009.