Samsung's foundry is booming as TSMC struggles with demand – bags Nvidia, Tesla, and Qualcomm as new clients

[DragonSlayer101]

The big picture: Samsung and TSMC are two of the largest chip manufacturers in the world, together accounting for more than 80% of the global market. While TSMC is the undisputed leader in advanced nodes with more than 70% market share, Samsung's foundry business has recently received a boost.

According to a report from Nikkei Asia, Samsung Foundry has either received orders from or is in negotiations with Google, Nvidia, Tesla, AMD, and BYD to manufacture advanced semiconductor chips based on sub-5nm nodes. Some of these companies previously worked exclusively with TSMC but are now engaging with Samsung to hedge their bets amid growing global uncertainty.

Google, which is reportedly designing its Tensor Processing Units for AI workloads in collaboration with MediaTek, is considering awarding Samsung a contract to manufacture a key part of these chips. The search giant is also said to be in talks with the South Korean company to produce its next-generation Axion AI accelerators.

The report claims Google is currently working with TSMC and Intel on advanced chip packaging and is a key driver behind the industry's shift toward a multi-foundry strategy. MediaTek is reportedly acting as an intermediary, helping the company negotiate with the three foundries for the production of its future SoCs, AI accelerators, and server chips.

Credit: Reuters

AMD is also said to be working with Samsung Foundry, as TSMC's advanced-node capacity (2nm and below) has already been pre-booked by Apple and Nvidia. The two companies recently signed a deal expanding their collaboration beyond memory supply, with Samsung rumored to have secured foundry contracts to manufacture AMD's future Epyc server CPUs using its second-generation 2nm node.

Qualcomm and Tesla have also signed new contracts with Samsung and TSMC to manufacture their future chips, after already working with both foundries for several years. According to the report, Tesla's A15 chip used in its vehicles and robotics platforms is manufactured by both Samsung and TSMC, while the next-generation A16 will reportedly be exclusively fabricated by the South Korean company at its Texas facility.

Another Elon Musk – led company, the neurotechnology startup Neuralink, has reportedly offered Samsung a lucrative contract to manufacture its next-generation brain implant chip. Groq, an Nvidia-backed startup developing AI accelerators, has also announced that its LP30 AI inference processor will be manufactured by Samsung Foundry on its 4nm process node.

Chinese EV giant BYD is another potential client reportedly in talks with Samsung about manufacturing its future automotive chips. According to a recent report from Seoul Economic Daily, the South Korean company is in "advanced discussions" with BYD to produce cutting-edge autonomous driving SoCs for its next-generation advanced driver-assistance systems.

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Samsung's foundry is booming as TSMC struggles with demand – bags Nvidia, Tesla, and Qualcomm as new clients

 

[Axeia]

Sometimes being second best is good enough.

If the past results are anything to go by though I expect new products with underwhelming power characteristics/thermals and NVIDIA probably throwing Samsung under the bus once they fully move back to TSMC.
With some luck this tempers TSMC never ending raising of prices.

 

[scoffer]

If these companies are doing it in an attempt to avoid the endless price-rises from TSMC, then they are probably just going from the frying pan into the fire. Corporate greed is endless, and everywhere.

 

[Rapob]

Sometimes being second best is good enough.

If the past results are anything to go by though I expect new products with underwhelming power characteristics/thermals and NVIDIA probably throwing Samsung under the bus once they fully move back to TSMC.
With some luck this tempers TSMC never ending raising of prices.

Samsung is not 2nd best, Intel is. Samsung has no chance of matching TSMC, Intel has the money and size to do it eventually. US force factor. Hence why Intel gained like +500% market cap in the last year. Trump/US stands behind Intel. He will go a long way to give Intel advantages.

In this era, every single fab is needed. Hence why Elon Musk builds TeraFab now. TSMC and Intel builds new fabs too, spread out across the planet.

AI and chip boom is not going anywhere. Chip demand is huge and will continue to be strong. Chip production will explode in the next 5-10 years. We need more fabs. Consumer stuff will be moved to cheaper/worse nodes. Enterprise sits on peak nodes today. Has been true for years now.

Intel is opening up their foundries too, when 18A/14A has good enough yields.

Samsung uses nanometer as marketing, they have done this for years. Samsung 8nm used on RTX 3000 series, was a renamed Samsung 10nm process, but 8nm sounded closer to TSMC 7nm at the time. It was vastly worse than TSMC 7nm in both clockspeeds and power usage. This was the reason AMD almost catched up this generation (RDNA 2 / Radeon 6000 vs Ampere / RTX 3000) - Nvidia came rushing back to TSMC with RTX 4000 for this reason. 4000 series saw massive gains in clockspeeds and power usage was much better. RTX 4000/5000 series destroys RTX 3000 series on performance per watt.


Same is true for Samsung 2nm, it is not even close to TSMC 3nm and TSMC 2nm and Intel 18A/14A will likely look next gen compared to Samsung 2nm.

I expect Samsung 2nm to be at TSMC 5nm level or worse.

Also, Samsung mostly makes small chips. Their yields with bigger dies are poor in general.

 

[daffy duck]

Good luck with Scamsung's poor yields and let's be clear their foundry is a rip-off too and Samsung mobile has to use Qualcomm for the S27 as Crapnyos is too dear.