Clients Tend to Partner with Multiple Foundries

Executives of Samsung Electronics’ foundry division celebrate the world’s first mass production of 3-nm semiconductors on June 30.

Competition is intensifying between Korea’s Samsung Electronics and Taiwan’s TSMC to secure foundry customers.

According to foreign media reports, major foundry clients such as Qualcomm, Nvidia, and Tesla are moving to reduce their reliance on a certain foundry partner.

In this regard, PhoneArena, an American IT media outlet, recently reported that Qualcomm will place orders for production of the Snapdragon 8 Gen 2 with both TSMC and Samsung Electronics. It forecast that the new chip will be produced through a 4-nm process and have two versions – a standard version and a customized version with improved performances. Samsung Electronics will be in charge of the production of the customized version.

Previously, Qualcomm partnered with Samsung for the production of the Snapdragon 8 Gen 1. But it teamed up with TSMC for the production of the Snapdragon 8+ Gen 1 announced in May of this year. Industry insiders believe that Qualcomm's decision to outsource part of the Snapdragon 8 Gen 2 production to Samsung suggests that the Korean company has earned Qualcomm's trust in its cutting-edge process to some extent.

Samsung Electronics has lost its foundry customers to TSMC due to concerns about the yields of its 4-nm and 5-nm processes. Nvidia, a large customer of Samsung Electronics, partnered with TSMC for the production of the RTX40 series, the next-generation graphics processing unit (GPU) unveiled in September. Recently, Taiwanese media outlets reported that Tesla asked TSMC to make semiconductors for next-generation full self drive (FSD).

However, Samsung Electronics succeeded in mass-producing 3-nm chips ahead of TSMC in the first half of this year and raised the yields of its 4-nm and 5-nm processes, securing competitiveness. Samsung expects that an increase in orders for 3-nm processes will create more opportunities for it.

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