[Digital Today reporter Suk Dae-geon] Samsung Electronics is shifting the centre of gravity of its semiconductor strategy aimed at widening its lead toward the materials, parts and equipment supplier ecosystem. It is because the company judges it will be hard to keep manufacturing leadership without upgrading upstream industries. After its president-level executives in May signalled a 5 trillion won co-prosperity fund, it has also laid out a plan to pour 2,100 trillion won into semiconductors alone by 2040.

Industry sources said on Wednesday that Samsung Electronics is pushing simultaneously for large-scale capacity expansion and stronger cohesion with partner companies. It plans to widen production bases nationwide while also raising the technology foundation of the domestic supplier network that supports those lines.

Moves to expand the volume and scope of support for "patterned wafers" for suppliers follow the same trend. Patterned wafers, with circuits drawn on them, are a physical means to check whether materials and equipment work properly on actual manufacturing lines and are seen as essential for upgrading supplier technology. Some interpret Samsung Electronics as placing more weight on solving technical challenges together by broadening the sharing of process data with partners.

The steps also connect to a message from its president-level executives in May. Samsung Electronics previously said it would create 5 trillion won over the next 5 years and invest in co-prosperity, building a sound ecosystem and fostering future talent. It presented support for small and medium-sized partner firms focused on second- and third-tier suppliers, and industry-academia cooperation, as items for review. The direction of making co-prosperity with partners a pillar of strengthening the technology ecosystem appears to be taking concrete shape through expanded support for materials, parts and equipment suppliers.

Samsung Electronics is putting particular effort into tightening its supply chain because manufacturing leadership and supplier technology are closely intertwined. As semiconductor fine processes approach their limits, new materials and equipment emerge as variables that determine yield and performance. When partner capabilities rise, Samsung Electronics' manufacturing competitiveness strengthens as well. Conversely, if upstream industries falter, it is hard to ensure stable yields and productivity no matter how many large fabs are built.

These incentives to localise become clearer in relations with Japan's supplier ecosystem. Samsung Electronics has global stature in memory and advanced foundry infrastructure, but it still relies on Japanese supply chains with monopolistic positions for a significant share of photoresists, silicon wafers and advanced materials and equipment for three-dimensional (3D) packaging.

The two sides have cooperated by jointly designing back-end processes and verifying new materials through R&D centres in Japan, while receiving timely supplies of equipment tailored to Samsung Electronics' advanced domestic lines. Some interpret that the more such intertwined competition and cooperation are, the stronger the motivation becomes to broaden the technology base of domestic suppliers and reduce dependence on specific overseas supply chains.

Another incentive to shore up its ecosystem is that delays in localising materials and equipment increase dependence on specific overseas suppliers, which returns as a supply-chain risk. The United States, China and Japan have recently been supporting their supplier ecosystems in parallel and encouraging technology upgrades in the same context. With competition for supplier supremacy spreading to the national level, domestic cohesion in upstream industries has emerged as a precondition for maintaining a wide lead.

The trend also links to the foundry competitive landscape. Yuanta Securities said that in the first quarter this year, TSMC ranked first in the global foundry market with a 72.3 percent share, while Samsung Electronics ranked second with 6.5 percent. Samsung Electronics' share slipped slightly from 7.7 percent a year earlier, but TSMC's dominance in the 70 percent range instead increases the need for big tech customers to diversify supply chains.

That is also why Samsung Electronics' foundry is mentioned as an alternative to TSMC. Yuanta Securities said Samsung Electronics has already secured orders for its 2-nanometre process and that signs have been detected of moves to expand its customer base, including Google considering a plan to split outsourcing of memory I/O dies with Samsung Electronics. Observations have also emerged that volumes for Meta's next-generation AI accelerators will go to Samsung Electronics. In this situation, strengthening domestic suppliers is linked to the company's survival strategy, beyond simply benefiting partners.

◆More opportunities for partners, but linkage remains a task

Samsung Electronics' investment plan also aligns with this direction. The company has shared a plan to expand its semiconductor production bases nationwide, from a capital-region focus to areas such as Honam, Chungcheong and Yeongnam. It plans to invest most resources in fostering semiconductor clusters while also pursuing non-capital-region investment in AI semiconductors and materials and parts. Some point out that as the production belt widens, the base of the supplier network that supports it must also grow thicker.

Ultimately, Samsung Electronics' tightening of supplier ties can be seen as a strategy to widen its lead across both foundry and memory. To support stable yields and production capacity in advanced processes, Samsung Electronics needs to raise the technology level of materials and equipment partner companies together. Daishin Securities said the average selling price (ASP) of high-bandwidth memory (HBM) in 2027 is expected to rise more than 100 percent from the previous year, indicating a continued phase of strong memory demand. As demand expands, the role of upstream industries that support supply capacity is bound to grow.

Samsung Electronics' supplier strategy is likely to move beyond one-off volume support toward a structure in which partner companies are validated on actual mass-production lines. It would be a way of sharing process data, like patterned wafers, to hone partner technology together inside Samsung Electronics' fabs. As the nationwide production belt widens, it opens more diverse opportunities for validation, giving Samsung Electronics room to tie expansion and ecosystem development into a single flow.

An industry official said, "From the partner's standpoint, it means more testing opportunities, and there is room for regional supplier clusters to grow together," but added, "Still, Samsung's expansion plan does not automatically link to nurturing materials, parts and equipment suppliers."