Samsung Electronics, having obtained its first customer for its Taylor, Texas fab, is expected to increase its business in semiconductor foundry services. However, the competition with rivals such as TSMC and Intel not only depends on getting better yields, but also an ecosystem of innovation with other fabless companies.
Samsung has taken a step before TSMC and Intel to adopt gate-all-around (GAA) process technology for its 3nm node, but that first-mover advantage may not work if it cannot continue to improve its yields and is unable to expand customer portfolios for its foundry business.
According to Korean media Asia Economic News, the fact that Samsung is planning to use SF4X technology to produce AI chips for Groq reflects a stabilizing phase for Samsung's yield of its 4nm processing technology.
Groq is the first fabless firm to announce plans to have its chips produced in Samsung's Taylor, TX fab. It is essential for Samsung to increase its market share after landing the first customer for its operations in America. Marco Chisari, head of Samsung Semiconductor Innovation Center (SSIC) said, Samsung will advance AI innovation with the collaboration with Groq.
The yields of SF4X has been improved to 75%, according to reports from securities houses in South Korea. And orders for 5nm nodes are reportedly increasing as well. Samsung has obtained Mobileye and Ambarella's order for its automotive chip foundry services.
South Korean industry experts also have noted that Samsung is changing its go-to-market strategies by focusing on high-potential customers such as Groq, without considering its scale. In the past, Samsung devoted significant resources to lure orders from big-scale, well-known tech firms such as Qualcomm, NVIDIA, and Tesla.
Wafer foundry business is a determinant factor for Samsung's future. Samsung chairman Jay Lee announced a KRW133 trillion (US$99.8 billion) investment in system-on-chip (SoC) development in 2019. Although the Device Solution (DS) division of Samsung reported losses of KRW8.9 trillion in 1H2023, Samsung's capital expenditure hit a historical high, at KRW23.2 trillion for the year.
Since 2017, Samsung made wafer foundry an independent business division and now has become the world's second-largest foundry service provider. How to shorten the gap with TSMC would be an important mission for Samsung for the years to come.
Article translated by Judy Lin
