Samsung Foundry is on the brink of a significant turnaround, hinging on a critical opportunity to secure a contract with Nvidia. This comes as the foundry seeks to recover from a difficult period in 2022, when a yield rate of just 35% caused Qualcomm to shift its chip orders to TSMC, which maintained a yield of 70%. Yield rates are crucial for Samsung Foundry as they directly impact production capabilities and cost.
Low yields not only create financial strain but can also disrupt product plans, as seen in the previous year’s inability to produce satisfactory quantities of Exynos 2500 application processors. This setback resulted in Samsung opting for Qualcomm’s Snapdragon chips, incurring unexpected costs of around $400 million. As the company prepares for the upcoming Galaxy S26 series, the challenge remains whether it can successfully manufacture enough Exynos 2600 processors for widespread use, excluding markets like the U.S., China, and Canada.
Achieving a yield of 70% is vital for making the jump to mass production and maintaining competitive pricing for its components. Recent reports indicate that Samsung Foundry is vying for an important order from Nvidia to produce its next-generation GPUs using a new 2nm process node. This is a crucial opportunity as GPUs apply parallel processing, making them far more efficient for AI tasks compared to traditional CPUs.
Currently, Samsung’s yield rate for the 2nm process stands at 40%, but with efforts projected to ramp up, the foundry could soon position itself as a credible alternative to TSMC, which dominates the market with a share of approximately 67.6%. On a positive note, Samsung Foundry has already made strides by producing the Tegra T239 SoC for the Nintendo Switch 2, transitioning some business away from TSMC. The potential acquisition of Nvidia’s GPU business may further bolster Samsung’s market reputation and growth trajectory in the semiconductor industry.