Samsung Foundry Reversal: Secures Major AMD Contract

Samsung's semiconductor foundry business, having faced challenges in recent years with the loss of major clients such as Apple, Nvidia, and Qualcomm, is poised for a significant turnaround. Recent reports from reliable sources indicate that AMD's next-generation chips, based on the Zen 5c architecture, are slated for production using Samsung's advanced 4-nanometer process.

Historically, Samsung played a pivotal role in chip production for the initial iPhone models. However, in 2016, the mantle shifted to TSMC, resulting in a decline in Samsung's 4-nanometer process technology compared to its competitors. This shift prompted key clients to transition their manufacturing needs to TSMC due to superior chip performance and yield rates.

In a noteworthy development reported by the Korean financial news website Chosun Biz, Samsung's 4-nanometer process technology has undergone substantial improvement, with yields surpassing the 70% threshold since November of the previous year, now aligning with industry benchmarks.

Insiders reveal that AMD's upcoming chips, featuring the Zen 5c architecture, will encompass various models. Notably, the lower-tier chips are set to be produced using Samsung's 4-nanometer process, while the higher-tier chips will be manufactured by TSMC using the cutting-edge 3-nanometer process. Industry experts posit that TSMC's 3-nanometer process technology may still be evolving in terms of integrity, integration, and performance, making Samsung's 4-nanometer process an attractive alternative for AMD.

A successful securing of the AMD Zen 5c chip orders by Samsung could pave the way for AMD to consider Samsung's 3-nanometer GAA process in subsequent developments. Kim Ynag-paeng, a researcher at the Korea Institute for Industrial Economics and Trade, emphasizes the strategic significance: "Assuming Samsung secures the AMD 4-nanometer chip orders, it will establish the foundation for Samsung to capture the 'big chip' market in servers, addressing a historical weakness in Samsung's semiconductor foundry business."

At present, only two global semiconductor foundries possess 3-nanometer and 5-nanometer process technologies – Samsung and TSMC. Despite TSMC's prominence in recent years, the surge in demand for AI chips has strained its production capacity, prompting certain clients to explore Samsung as a viable alternative foundry.

Recognizing this market opportunity, Samsung recently announced enhancements to its 4-nanometer and 5-nanometer processes, showcasing improvements in both yield rates and overall performance. The Exynos 2400, Samsung's latest flagship chip, will mark the inaugural deployment of the 4-nanometer process. Additionally, the second generation of the 3-nanometer process is anticipated to commence mass production in the first half of the coming year, with an impressive yield rate nearing 70%. These advancements position Samsung as a compelling choice for chip manufacturing, especially in the evolving landscape of advanced semiconductor technologies.