October 5, 2022: -On Tuesday, Samsung said it strives to make some of the most advanced semiconductors in the world in five years as the race between the South Korean electronics giant and the world’s largest chip maker, TSMC, heats up.

The company laid out a roadmap for chip production plans and said it will begin making chips with a 2-nanometer process in 2025 and a 1.4-nanometer process in 2027.

The nanometer figure is referring to the size of each transistor on a chip. The smaller the transistor, the more it can be packed onto a single semiconductor. Typically, a reduction in nanometer size can yield more powerful and efficient chips.

For comparison, the processor in Apple’s latest iPhone 14 Pro and Pro Max models is a 4-nanometer chip.

Samsung began producing 3-nanometer chips earlier this year. Shares of Samsung in South Korea closed nearly 4% higher on Tuesday.

The South Korean firm, known for consumer electronics and memory chips, is looking to ramp up its contract chipmaking, or foundry business, to catch up with Taiwan’s TSMC.

Samsung is the second-biggest foundry globally by revenue, with a 17.3% market share reached to 52.9% for TSMC, according to TrendForce.

For its part, TSMC expects to begin 3nm chip production this year, with the presentation of 2nm set to start in 2025. However, the company has not officially announced plans to mass produce 1.4nm chips.

“This is the first time that SEC (Samsung Electronics) guides for its long-term foundry roadmap, and I think it is more aggressive than TSMC and market expectations,” SK Kim, an analyst at Daiwa Capital Markets.

Samsung’s ambitious plans come amid global economic headwinds and signs of a slowdown in semiconductor demand. Global chip industry sales fell 3.4% in August, reached to July, according to the U.S.-based Semiconductor Industry Association.

Despite this, Samsung said it plans to expand its production capacity for the most advanced fragments by more than three times by 2027 compared to this year, highlighting its bullishness on future demand.

These have its factories in the U.S. Samsung has a plant in Austin, Texas, and is currently making a $17 billion facility in Taylor in the same state.