Samsung Foundry Faces Uphill Battle for 3nm Chip Orders

Samsung Foundry is reportedly encountering difficulties in attracting major customers for its advanced 3nm chip production, as many fabless chip designers are opting for rival TSMC. Despite being one of only two major players capable of producing such cutting-edge semiconductors, Samsung’s lower yield rates appear to be a significant deterrent.

Key Highlights:

• TSMC’s Dominance: TSMC is currently the undisputed leader in 3nm chip manufacturing, boasting an impressive 90% yield rate, making it the preferred choice for top tech firms like Apple, MediaTek, Nvidia, and Qualcomm.
• Samsung’s Lower Yield: In contrast, Samsung Foundry’s 3nm yield rate is reportedly around 50%, a figure that makes chip designers hesitant to commit to their production.
• Qualcomm’s Shift: A notable example of this preference is Qualcomm, which moved its Snapdragon 8 Gen 1+ production to TSMC after reportedly experiencing a low 35% yield with Samsung Foundry for the original Snapdragon 8 Gen 1. Qualcomm has since exclusively used TSMC for its flagship Snapdragon 8 SoCs.
• SMIC’s Rise: China’s SMIC is emerging as the world’s third-largest foundry, posing a growing challenge, especially in the Chinese market.
• Sanctions Impact on SMIC: Due to U.S. and Dutch sanctions, SMIC is unable to acquire advanced Extreme Ultraviolet Lithography (EUV) machines, relying on older Deep Ultraviolet Lithography (DUV) for chip production. This limits their technological capabilities for the most advanced nodes.
• Focus on Chinese Automotive Sector: Despite its limitations, SMIC is reportedly poised to take business from Samsung Foundry by manufacturing 5nm and 7nm chips for the Chinese automotive sector.

The disparity in yield rates and the consistent preference for TSMC highlight Samsung Foundry’s ongoing challenges in the highly competitive advanced semiconductor market. As 2nm chips are expected next year, TSMC’s position at the forefront of the industry seems secure beyond 2026.

For more information, you can read the full article on PhoneArena: Everyone wants TSMC to build their 3nm chips as Samsung Foundry has trouble finding customers