Samsung Electronics is striving to sign long-term supply contracts with multiple wafer makers to ensure sufficient silicon wafer supplies for the manufacture of memory chips and logic ICs during 2018-2019, according to industry sources.

Samsung has already reached a supply deal with GlobalWafers, which is bracing for huge demand from the Korea-based customer, said the sources. In fact, GlobalWafers has informed its other customers that the company's available silicon wafers will likely be reduced 30% starting 2018, the sources indicated.

Samsung used to mainly source silicon wafers from SunEdison Semiconductor, which was later acquired by GlobalWafers, the sources added.

Samsung has also started negotiating with Shin-Etsu, Sumco and Siltronic to secure enough supplies from the wafer producers for its additional new capacity set to come online over the next two years, the sources noted.

Samsung has stepped up its foundry business expansions to compete with Taiwan Semiconductor Manufacturing Company (TSMC) for not only fabless chipmakers but also Apple and other system device manufacturers, the sources said. Samsung has already ordered a huge number of available epitaxial wafers for 2018, the sources said.

Samsung disclosed previously it is constructing a new 12-inch fab in Hwaseong, Korea (dubbed S3) designed for the manufacture of logic chips using advanced 10nm, 8nm and 7nm processes, with operations scheduled to kick off around the end of 2017. Samsung already has one 12-inch logic fab in Giheung, Korea (S1), and another (S2) in Austin, the US.

In the memory-chip field, where Samsung maintains its dominance, the company has also reserved a great number of polished wafers to satisfy robust demand for DRAM and 3D NAND flash chips in 2018, the sources noted.

Earlier in 2017, Samsung unveiled plans to expand production capacity at its Line 17 memory fab in Hwaseong. The company also announced recently plans to expand production capacity for 3D NAND flash chips at its fabs in Pyeongtaek, Korea and Xian, China.

Samsung is expected to build an additional 200,000 12-inch wafers monthly for the manufacture of its logic ICs, DRAM and NAND flash memory in 2018-2019, the sources indicated. By 2019, the chipmaker could demand as high as one million 12-inch wafers monthly to satisfy its growing needs, the sources said.

According to IC Insights, Samsung's 2017 capex for its semiconductor group could range from US$15 billion to US$22 billion. The company already spent US$11.0 billion in capital outlays for its semiconductor business in the first half of the year, only US$300 million less than its spending in all of 2016.