Samsung: Only by investing more than three times the current investment will it have a chance to catch up with TSMC in 2030?

Samsung Electronics made a rhetoric three years ago, hoping to become the global leader in system semiconductors by 2030, but professional analysts said that Samsung's growth rate in both chip manufacturing and foundry is not as fast as expected, especially in chip manufacturing. The foundry's capacity lags far behind its biggest rival, TSMC.

In February, it was reported that Samsung had a yield rate of only 35% on its 4nm process node. This means that only 35% of die diced from wafers can pass quality control. By comparison, TSMC achieved a 70 percent yield when producing the 4nm Snapdragon 8 Gen 1 Plus. In other words, all things being equal, TSMC made twice as many chips than Samsung foundry in the same period.

However, Samsung executives also firmly denied the rumor that Samsung's process technology below 4nm may lose foundry customers. Kang Moon-soo, the leader and senior vice president of Samsung's wafer market and strategy team, said that the demand from major customers remains stable, and the order balance of the foundry business in the next five years is eight times that of 2021.

In response to the concern that Samsung's 4nm process may lag behind TSMC, Kang said that the 5nm process has entered a mature yield stage and is maximizing the supply of large customers. The initial expansion of the 4nm process has been delayed somewhat, but Samsung is striving for stability and has begun to enter the expected yield improvement curve.

In addition, Samsung said on April 28 that it is on track to start high-volume production this quarter using its 3GAE (early 3nm-class gate-all-around) manufacturing process. The announcement not only marks the industry's first 3nm-scale manufacturing technology, but also the first node to use gate-all-around field effect transistors (GAAFETs).

Samsung's 3nm process research and development plan is divided into two stages, the first generation of GAAGAE (GAA-Early) and the second generation of 3nm GAP (GAA-Plus). Samsung says the process will deliver a 30 percent performance boost, 50 percent power reduction, and up to 80 percent higher transistor density (including a mix of logic and SRAM transistors). It remains to be seen how Samsung's actual combination of performance and power consumption will play out, though.

Samsung emphasized that compared with the 5nm process, Samsung's first 3nm process GAA technology chip area will be reduced by 35%, the performance will be increased by 30% or the power consumption will be reduced by 50%. However, according to TSMC's annual report, 3nm based on EUV technology exhibits excellent optical capabilities and meets the expected chip yield, so as to reduce mask defects and process stack errors of the exposure machine, and reduce the overall cost. 2nm and more advanced processes will focus on To improve the quality and cost of EUV technology.

Samsung's difficulty at 3nm is that the 3nm GAA process lags behind in the number of patent IPs established. According to South Korean media reports, Samsung lacks patents related to the 3nmGAA process.

At present, in terms of factories, it was previously reported that Samsung may invest 17 billion US dollars to build a 3nm chip production line in the United States. In terms of customers, Samsung has not disclosed specific details, but there has been news that heavyweight customers of TSMC such as Qualcomm and AMD are interested in importing Samsung’s 3nm process, but due to the above-mentioned Korean media reports that Qualcomm has replaced the generation of its 3nm AP processors. Work orders are handed over to TSMC, and Samsung's 3nm customers are still a mystery.

Samsung Electronics' share of the global chip market has remained unchanged since 2019, and it is impossible to shorten the gap with TSMC. According to TrendForce's data analysis, Samsung's global foundry business revenue will account for 18% in 2021, far less than that of TSMC. At 53% of TSMC, the market share of TSMC is expected to rise to 56% and Samsung to 16% in the future. Although Samsung is strengthening its influence in the foundry business, market researchers expect TSMC's position in chip foundry to be more consolidated.

Kim Yang-paeng, a researcher at the Korea Industrial Research Institute (KIET), said that Samsung may catch up with TSMC in the foundry field, but in terms of overall production capacity, under the assumption that TSMC has not made any investment, Samsung must invest more than three times the current investment. Only have a chance to catch up with TSMC in 2030. Samsung invested 43.567 trillion won in semiconductor equipment alone in 2021, which means that in order to catch up with TSMC, Samsung will have to invest at least 139.7 trillion won to catch up. Therefore, according to the current situation, it is difficult for Samsung to surpass TSMC within 7 years and become the leader of global system semiconductors.

However, the KIET researcher mentioned that in fact, the largest system semiconductor manufacturer is still Intel, including CPU and semiconductor foundry manufacturing, while TSMC only ranks first in foundry. US President Biden also recently publicly stated that the domestic semiconductor leader Not only Intel, but also pointed out that semiconductor companies such as Samsung and TSMC are growing rapidly, and they have set up semiconductor factories in Arizona and Texas, and hope that Congress will pass key industry bills including the semiconductor industry as soon as possible, giving domestic companies more support.