Samsung Foundry has boosted utilization with fresh 7nm and 8nm chip orders from Nintendo and multiple AI chipmakers. Yet its persistent setbacks at the 3nm node continue to spotlight serious cracks in its advanced process competitiveness. After a long dry spell, Samsung's foundry unit is generating some positive buzz with its 3nm Exynos 2500 chip slated for the next Galaxy foldables, alongside a gaming system-on-chip reportedly secured for Nintendo.
But as new 3nm projects enter the pipeline, analysts warn Samsung's most advanced node is about to face a full-scale litmus test, just as mature-node competition grows increasingly cutthroat.
Samsung's 3nm turns three—but yields still stuck at 50%
According to ChosunBiz and the JoongAng Ilbo, Google initially planned to use Samsung's 3nm process for its Tensor chips, but has since pivoted to TSMC. Qualcomm and AMD have also reportedly sidelined Samsung Foundry from their advanced node vendor lists.
While Samsung has landed some 5nm and 7nm orders, SMIC's growing customer traction is adding a new layer of competitive pressure to the global foundry market.
South Korean sources say Samsung's 3nm yield remains at a sluggish 50%, despite the gate-all-around-based process entering mass production back in June 2022. By contrast, TSMC's 3nm yield is reportedly exceeding 90%, with stronger reliability in both performance and stability.
Apple, Qualcomm, Nvidia, and MediaTek are all leveraging TSMC's third-generation 3nm (N3P) process, with plans to transition to 2nm in 2026. Google is expected to adopt TSMC's N3E process for its next-generation Tensor G5 in a bid to narrow the performance and power efficiency gap with rivals.
South Korean outlets note that a growing number of firms exploring Samsung's advanced nodes are backing out after failed test runs, shifting to TSMC instead. As one local semiconductor expert put it, the foundry business hinges on trust—something Samsung has lost due to its yield issues, and regaining it from marquee clients won't be quick.
Galaxy Z foldables face make-or-break moment
Samsung's Galaxy Z foldables, expected in July 2025, will debut its in-house Exynos 2500 chip, designed by its System LSI division and built on Samsung Foundry's 3nm process. This marks the company's most advanced node in active mass production.
Until now, Samsung's 3nm capacity had been reserved for external customers. This marks the first time it's fabricating a chip for internal use, and the first instance its Mobile eXperience (MX) division is using an in-house chip in a flagship foldable.
That said, rolling out its 3nm chip in a high-profile in-house foldable raises the stakes for Samsung Foundry. It now has to prove yield viability while managing thermals and power consumption on the Exynos 2500—metrics that will be scrutinized as benchmarks of its design and process strength.
SMIC advances despite equipment constraints
SMIC is steadily closing the distance with Samsung Foundry, gaining ground by capitalizing on China's domestic market. Despite US bans on EUV lithography tools, SMIC has pressed ahead with both 7nm and 5nm production.
SMIC still trails Samsung in 5nm yield and chip performance due to its lack of advanced lithography tools. But analysts suggest aggressive government subsidies could help offset that shortfall.
Huawei has launched a notebook powered by SMIC's 5nm chip. Local media hailed it as a breakthrough, highlighting that after being constrained at 7nm, Huawei's in-house development and mass production of a 5nm chip signal a major stride for China's semiconductor goals.
South Korean analysts caution that SMIC's ascent could undermine Samsung's fallback strategy, relying on 5nm and 7nm nodes to compensate for its lagging 3nm and 4nm performance.
Despite headline wins like Nintendo, Samsung faces intensifying competition from Chinese rivals, including SMIC and Hua Hong Semiconductor. Industry sources warn SMIC's growing traction may weaken Samsung's appeal among Chinese clients, posing yet another strategic headwind.
Article edited by Jerry Chen
