Introduction
Samsung Foundry, one of the leading semiconductor manufacturers, Samsung Foundry’s unveiled a two-part strategy led by its new chief Han Jin-man to address its competitive challenges against industry giant TSMC and the growing threat from China’s SMIC. With TSMC holding a 65% market share and delivering impressive yields at the cutting edge of semiconductor technology, Samsung faces an uphill task in closing the gap. However, Han’s strategy reflects a well-planned approach to strengthen Samsung’s position in the foundry market by focusing on improving yields and leveraging legacy nodes.
techovedas.com/rapidus-faces-5-majar-key-challenges-in-the-race-to-2nm-chip-production/
Current Scenario: Dominance of TSMC and Rise of SMIC
TSMC’s dominance in the semiconductor foundry market remains unrivalled, especially in advanced nodes such as 3nm and the upcoming 2nm processes. Reports suggest that TSMC’s 2nm test-run yield is already at 60%, reflecting its technological leadership and consistent execution.
In contrast, Samsung foundry yields at 2nm are reportedly lagging behind, raising concerns about its ability to compete effectively in this crucial technology node.
Further complicating the challenge is the emergence of China’s SMIC, which, despite facing US sanctions, has demonstrated significant progress in legacy and mid-range nodes. SMIC’s growing presence threatens to erode Samsung’s market share in more mature technology areas, further intensifying competition.
Samsung’s two-part plan: Yield improvements and Legacy Nodes
Led by Han Jin-man, Samsung Foundry’s strategy focuses on two key areas: improving yields at advanced nodes and driving more business at legacy nodes (10nm and above). These initiatives reflect a pragmatic approach to addressing both short-term and long-term challenges.
techovedas.com/broadcom-achieves-1-tillion-market-cap-as-stock-surges-24-on-ai-growth/
1. Improved yields on advanced nodes
Samsung was the first company to adopt gate-all-around (GAA) transistor technology at the 3nm node , a major technological milestone. GAA offers significant improvements in power efficiency and performance compared to FinFET technology , which TSMC continues to use at its 3nm node. However, Samsung’s early adoption of GAA has been hampered by low yields and limited customer demand, hampering its competitive edge.
To address this problem, Samsung is prioritizing yield improvements in its advanced nodes, particularly the 3nm and upcoming 2nm processes. Higher yields are critical to winning client trust and maintaining competitiveness, as they directly impact production costs, time to market, and overall reliability. Samsung’s ability to reduce the yield gap with TSMC will be a decisive factor in its success.
techovedas.com/the-rise-of-arm-and-the-fall-of-intel-arm-ceo-perspective/
2. Maximizing capacity utilization in legacy nodes
While the spotlight often shines on advanced nodes, demand for legacy nodes (10nm and above) remains strong across a variety of industries, including automotive, IoT, and consumer electronics. Recognizing this, Samsung aims to maximize capacity utilization at its legacy node manufacturing facilities to boost revenue growth and improve profitability.
By leveraging its existing infrastructure and expertise in mature process technologies, Samsung can attract more customers seeking reliable and cost-effective solutions for their products. This strategy not only enhances short-term financial performance, but also allows Samsung to maintain its lead over competitors such as SMIC in the legacy node segment .
Challenges ahead: implementation and customer trust
While Samsung Foundry’s strategy appears logical and well-aligned with market dynamics, its success will depend on execution. Improving yields at advanced nodes is a complex and resource-intensive process that requires precision, innovation, and continued investment. Samsung must demonstrate consistent progress in this area to regain the trust of key customers, many of whom have turned to TSMC for its superior yields and reliability.
In addition, Samsung’s ability to turn its technological advancements into tangible benefits for customers will make a key differentiator. The semiconductor industry is highly risk-averse, and customers prioritize stability, scalability, and proven performance when selecting a foundry partner. Samsung’s challenge will be to convince customers that its advanced nodes, especially those using GAA technology, can deliver on their promises.
The way forward: Can Samsung close the gap?
Han Jin-man’s leadership comes at a crucial moment for Samsung Foundry as it seeks to strengthen its position in the global semiconductor market . By focusing on yield improvements at advanced nodes and maximizing capacity utilization at legacy nodes, Samsung has laid out a clear and pragmatic strategy. However, the road ahead will not be easy.
TSMC’s established leadership and consistent execution have set a high bar for Samsung. At the same time, SMIC’s progress in legacy nodes is a growing threat that cannot be ignored. Samsung’s ability to execute its strategy with laser focus, continuously improve, and rebuild client trust will determine whether it can emerge as a strong competitor to TSMC and maintain its lead over SMIC.
In a fiercely competitive market where technological leadership and customer trust are paramount, Samsung Foundry’s ambitious plan is a bold move. The coming years will reveal whether this strategy can bridge the gap and secure Samsung’s place as a formidable player in the semiconductor foundry industry .
