|Samsung Electronics' semiconductor plant in Pyeongtaek, Gyeonggi Province Courtesy of Samsung Electronics|
If the deal goes through, starting the second half of 2021, Samsung will manufacture 15,000 graphic chips for Intel at the Austin plant, which utilizes 14-nanometer processing technology, rather than CPUs that require advanced 7-nanometer or 5-nanomter tech.
A Samsung Electronics official said "the company cannot comment on the issue."
Intel said it plans to stick to a strategy of producing the majority of its chips internally, but was considering outsourcing some production.
Industry analysts said Taiwan's TSMC will be the biggest beneficiary of this strategy as media have reported that the foundry leader has already secured an outsourcing deal with Intel. Although Samsung is also expected to secure a smaller deal.
Pat Gelsinger, the new CEO of Intel from next month, said he was confident that the majority of products for 2023 would be manufactured internally, during a planning conference call Thursday.
"We believe the majority will be on our 7-nanometer lines, but we will be increasing the use of foundry capabilities in that timeframe as well," Gelsinger told investors.
Samsung would benefit in this scenario as there have been doubts over whether clients would outsource semiconductor production to its foundry business, as the Korean tech giant also designs its own chips.
The company has invested a huge amount of money in the foundry business with the aim of becoming a leader in the sector.
If Samsung secures the outsourcing deal from Intel, it will be able to allay concerns regarding the leaking of chip-designing technologies.
Manufacturing Intel chips at its Austin factory will also allow Samsung the chance to establish good relations with the new U.S. administration led by President Joe Biden.
Jim Handy, a U.S.-based analyst working for Objective Analysis, told The Korea Times that "it is very possible that the Samsung Austin fab could produce chips for Intel," adding that the factory, which runs 14-nanometer lines, could handle Intel's technology.
"This would benefit Samsung and would help to satisfy the U.S. government's desire to produce chips within the U.S.," the analyst said.