Samsung is the world’s second-largest manufacturer of chips after TSMC, but there’s a massive gap between the two. TSMC captures nearly two-thirds (66%) of the foundry market, while Samsung’s market share is under 10%. The good news is that the Korean firm may soon secure a big contract from automotive company Hyundai.
Hyundai eyes Samsung Foundry for chips for self-driving cars
According to the Korean media, Hyundai is in serious discussions with Samsung to manufacture its automotive chips for self-driving cars using Samsung’s advanced 5nm process (SF5A). Industry insiders expect the two Korean firms to soon finalize a deal as Hyundai aims to launch vehicles with its in-house automotive chips by 2026. This potential partnership is being seen as a win-win situation for both.
As said earlier, Samsung’s foundry is already struggling to compete with TSMC. Its poor 3nm and 2nm yields have led chipmakers to side with the Taiwanese firm. A major 5nm contract from Hyundai helps generate some revenue amid this unprecedented financial difficulty. For Hyundai, this ensures a stable domestic supply chain for its next-gen automotive chips. It could also be cost-effective for the Korean car maker.
While Hyundai is aware of Samsung’s 2nm and 3nm struggles — both Samsung and TSMC are yet to begin 2nm mass production — it also knows that its compatriot has a strong 5nm process technology. Samsung already manufactures Tesla’s next-gen Full Self-Driving (FSD) chips for Level-5 autonomous driving vehicles. It also produces US chip designer Ambarella’s automotive chips for self-driving cars.
If the deal goes through, Samsung will strengthen its position in the autonomous chip market. Studies suggest the market will grow to $29 billion by 2030. A partnership with Hyundai could also help the Korean conglomerate secure more large-scale chip orders in the future. Samsung is currently building two new chip factories in the US, adding to its existing plant in Austin, Texas.
