Samsung Foundry is facing a challenging situation as it struggles to attract significant clients for its latest chip manufacturing processes. Despite launching its 3nm node, the foundry has encountered difficulties in drawing major customers, and the same trend appears to be affecting its 2nm node. Competitor TSMC is leading the way with a yield rate of 60-70% at 2nm, which starkly contrasts with Samsung Foundry’s disappointing yield of approximately 30% at both 3nm and 2nm. Yield refers to the percentage of usable chips produced from a silicon wafer that meet quality standards, with non-compliant chips often discarded or repurposed through a process called “Binning.”
The low yields are causing a ripple effect, leading customers to migrate to TSMC. Notably, Google has opted for TSMC for its Tensor G5 application processor for the upcoming Pixel 10 series. Similarly, Qualcomm has chosen to continue its relationship with TSMC for the Snapdragon 8 Elite 2 application processor rather than reverting to Samsung Foundry. This trend has significantly impacted Samsung’s market share, which dropped from 9.1% in Q3 2024 to 8.1% in Q4.
In contrast, TSMC’s market share in the global foundry business surged to 67.1% in the same period, highlighting the growing preference for its services among major chip producers. Currently, Samsung Foundry only has one notable chip, the Exynos 2600, set to be produced on its 2nm process. If successful, this will allow Samsung to be the first in the market with a mobile device powered by a 2nm application processor, ahead of competitors like Apple, which previously pioneered the 5nm process. However, for Samsung Foundry to remain viable, it will need to secure more clients and improve its yield rates significantly.