Samsung 3nm Yield Stuck at 50%, Lags Behind TSMC

According to South Korean media reports, Samsung Electronics is facing ongoing challenges with its advanced 3nm chip manufacturing process, with yield rates reportedly still below 50%, prompting major clients to shift orders to TSMC.

On May 29, The Chosun Ilbo cited industry sources revealing that Google's AI-focused Tensor Processing Units (TPUs), initially planned to be manufactured using Samsung's 3nm process, are now expected to be fabricated by TSMC instead. Industry insiders also suggest that key players like Qualcomm and AMD have excluded Samsung from their advanced chip production plans, fueling growing market concerns.

Samsung's 3nm process, which entered mass production three years ago, has struggled to surpass the 50% yield mark—an unusually low figure for such a mature node. In contrast, TSMC has reportedly achieved yield rates above 90% for its 3nm technology, offering greater production stability and reliability despite higher manufacturing costs.

Currently, leading semiconductor companies including Apple, Qualcomm, NVIDIA, and MediaTek are adopting TSMC's third-generation 3nm process, known as N3P. Reports indicate that these companies plan to transition to 2nm nodes starting in 2026. Google is also expected to leverage TSMC's second-generation 3nm process for its upcoming Tensor G5 chip, aiming to close the performance and energy efficiency gap with competitors.

The core issue lies in client confidence: companies exploring Samsung's advanced process technologies often encounter complications during the testing phase, leading them to eventually migrate to TSMC. A semiconductor industry expert emphasized that trust is critical in the foundry business. With persistently low yield rates for its cutting-edge nodes, Samsung's foundry capabilities are under scrutiny, and rebuilding client trust could take considerable time.

To mitigate underutilization of its 3nm and 4nm production lines, Samsung has increasingly relied on its 5nm and 7nm technologies. According to sources familiar with Samsung's strategy, the company has been actively engaging with Chinese electronic design automation (EDA) firms to strengthen its ecosystem and secure chip orders from Chinese clients. However, the rapid rise of local Chinese firms may pose new challenges to Samsung's competitiveness in the region.