While the global semiconductor foundry market is on the rise thanks to the AI boom, Samsung is moving in the opposite direction. The Korean firm is finding it difficult to keep pace with Taiwan’s TSMC, the undisputed leader. The latter has reportedly achieved a 3nm yield of over 90% and a 2nm yield of 60%. In contrast, Samsung’s 3nm yield is under 60% and the 2nm yield is struggling in the 10-20% range.
Samsung Foundry struggles with poor 2nm and 3nm yields
According to a recent market study, the foundry market grew 9.1% quarterly in the third quarter of 2024. However, Samsung saw its share decline to 9.3% from about 11% — it was the only company in the top 10 to post a decline in Q3. The Korean conglomerate’s sales dropped by 12.4%.
TSMC, on the other hand, solidified its dominance in the foundry market. The Taiwanese giant now occupies nearly two-thirds (66%) of the industry. It has secured huge manufacturing contracts for advanced chips from several high-profile customers like Nvidia, AMD, and Apple. While Samsung remains a distant second in the foundry market, China’s SMIC is closing the gap to it. SMIC captured a 6% market share in Q3 2024.
Samsung’s struggles are tied to its poor yield rates. As said earlier, the company is far behind TSMC in both 3nm and 2nm yield. It uses gate-all-around (GAA) transistors in its 3nm process, while TSMC is still using the previous-gen FinFET transistor architecture. Samsung hopes to improve its performance with the 2nm process to regain competitiveness, but it is looking like an uphill battle at the moment.
Foundry struggles forced Samsung’s mobile division to exclusively use the Snapdragon 8 Elite chip in the Galaxy S25 series. The Exynos 2500, its first 3nm smartphone processor, faced production and performance issues, leading to this situation. There are rumors of Samsung potentially using TSMC’s foundry to produce its flagship Exynos processors in the future. Despite these struggles, it is trying hard to turn the tide. The road to recovery sure looks rough, but we can’t count Samsung out just yet.
