Inside Samsung Electronics’ chip design offices, the workload keeps growing. The company’s foundry division has been winning more orders as customers race to secure manufacturing capacity for AI chips, and the demand is straining the engineers who design the physical layouts of the semiconductors Samsung makes. To relieve the pressure, Samsung is considering handing part of that work to outside firms, according to a report on July 15 citing people familiar with the matter.
The work in question is the backend design of the I/O chips that Samsung produces for Google’s tensor processing units, the custom accelerators Google uses to train and run its AI models. Backend design, also called physical design, is the labor-intensive stage where engineers translate a chip’s logical blueprint into the precise placement of billions of transistors and the wiring that connects them. It is time-consuming, detail-heavy and increasingly the bottleneck at chipmakers whose order books are full.
Samsung has been in talks with three Korean semiconductor design-services companies about taking on the assignment: AD Technology, Gaonchips and Alphachips, according to the report. The companies are part of a small but growing cluster of Korean chip design specialists, and a deal would mark one of the first times Samsung has outsourced backend work on a major customer’s chip to domestic partners.
The move reflects a broader shift in the chip industry. As chips grow more complex, the gap between design capacity and manufacturing capacity has widened, and even the largest semiconductor companies have begun sharing the work. Taiwan’s design-services firms, including Alchip and Global Unichip, have built large businesses doing exactly this kind of work for clients ranging from startups to established chipmakers, often for companies that design chips but do not manufacture them.
For Samsung, the pressure is specific. The company’s foundry business has been fighting to win and keep advanced-chip orders from large customers like Google, Nvidia and Qualcomm, all of whom weigh Samsung against rival Taiwan Semiconductor Manufacturing Co. on every program. Keeping a customer like Google satisfied means hitting schedules, and hitting schedules means having enough design engineers. Outsourcing is one way to stretch the team it has.
The strategy carries risks. Backend design touches the most sensitive details of a chip’s implementation, and handing it to outside firms raises questions about intellectual property protection and quality control. Samsung has previously kept such work largely in-house, and its executives have said little publicly about the discussions. A person close to the company said no final decision has been made and that Samsung is still evaluating its options.
The move would also mark a quiet change in how Korea’s chip industry organizes itself. Samsung and SK Hynix have dominated the country’s semiconductor sector for decades, and the design-services firms that exist in Korea have mostly served smaller clients. A contract from Samsung would be a validation of that ecosystem, giving the three companies scale and a reference customer that could open doors elsewhere.
The Google relationship makes the decision more delicate. Google has spread its TPU manufacturing across both Samsung and TSMC over the years, and the competition between the two foundries for Google’s business is closely watched across the industry. Any stumble in Samsung’s delivery of Google-related chips, including delays caused by design bottlenecks, could hand TSMC an opening. Analysts said Samsung’s willingness to outsource suggests its managers are more worried about capacity than about ceding control.
There is also the commercial logic. The foundry business runs on utilization: Samsung earns money when its fabs are full, and the fastest way to keep them full is to shorten the time between a customer’s design and production. Backend design is often on the critical path, and contract design houses can throw more engineers at a project than Samsung can afford to staff internally at peak demand.
The three Korean firms would also benefit beyond the immediate contract. Working on a chip for Google, even a supporting component like an I/O chip, puts them on the radar of other AI hardware companies looking for design capacity. The market for such work is expanding as more companies design custom chips, a trend that has turned Taiwan’s design-services champions into some of the best-performing stocks in the sector.
Samsung’s broader AI push makes the timing sensible. The company is trying to position its foundry as a credible alternative to TSMC for AI silicon, and it has announced plans to expand its advanced-node capacity in Korea and Texas. Every order it books adds to the design workload, and outsourcing is a standard tool for absorbing that growth without a hiring spree.
The outcome remains uncertain. Samsung has not confirmed the talks, and the three companies have declined to comment. People familiar with the matter said the scope of the work, the terms and even the choice of partners could all change before anything is signed.
What is clear is that Samsung’s foundry ambitions have outgrown its in-house design bench. Whether it relieves the pressure by hiring, by outsourcing or by turning work away will shape how quickly it can convert its order book into shipments, and how much of Google’s AI hardware business it can hold on to.
