Building Launchpad to Chase TSMC?
CEO Lisa Su of AMD, a U.S. fabless semiconductor company, has hinted at finding alternatives beyond TSMC, the world’s leading foundry. With TSMC holding a 60% market share, struggling to meet demand due to recent production capacity issues, all eyes are on whether Samsung Electronics, the only competitor of TSMC in advanced processes, can reap benefits in the future.
According to the industry on July 24, TSMC’s 3-nm process yield is known to be at 55%. There have been yield issues from 3 nm, but improvements have not been made thus far.
In contrast, Samsung Electronics is on track for stabilization with a yield of over 60% in the 3-nm foundry process. There are also analyses that the yield for 4 nm has recently exceeded 75%, so the improving yield in the 3-5-nm foundry processes has caught the interest of global tech companies. Samsung was the first to introduce Gate-All-Around (GAA) technology at 3 nm.
As Samsung rapidly recovers and stabilizes yields in ultra-fine processes, the hearts of fabless customers, who relied solely on TSMC, are wavering. TSMC’s production capacity is not as strong as before, and even the prices for advanced process foundries have been set high. In fact, TSMC has priced this year’s 3-nm foundry process at $19,865 per wafer (approximately 25.44 million won), and it is known that the price of the quantity to be produced in future U.S. factories will be increased by about 30%.
An industry official said, “In the competition for advanced processes, many clients were taken to TSMC while Samsung Electronics was suffering from yield issues. With Samsung’s yield now stable and even higher than TSMC at 3 nm, and applying new technology, the likelihood of big tech companies switching back to Samsung Electronics is high.”
Currently, TSMC is manufacturing advanced semiconductors for companies including AI semiconductor company Nvidia, Apple, AMD, and Qualcomm, but it is known to be struggling to meet demand as production capacity has reached its limit.
Against this backdrop, AMD CEO Lisa Su recently surprised the industry in an interview with Nikkei Asia, saying that she was looking for alternatives. In response to the question “Is there a possibility of increasing outsourcing to other companies besides TSMC?” Lisa Su said, “It’s a good thing that more manufacturing facilities are being developed around the world, including in the U.S. and Japan. We want to utilize manufacturing facilities in various regions to ensure flexibility.” Although most of the semiconductor chip manufacturing is currently outsourced to TSMC, this shows a willingness to diversify the supply chain in the future.
The industry predicts that Samsung Electronics will be the most viable alternative for AMD. This is because TSMC and Samsung Electronics are the only companies capable of implementing the AI semiconductor development and mass production that AMD is prioritizing.
This comment contrasts with Lisa Su’s previous response to Taiwanese reporters asking about Korean media reports that AMD could switch its nano foundry process and next-generation product volumes to Samsung Electronics’ foundry. Su had scoffed, “Do you believe the Korean media?” However, some interpret that from AMD’s perspective, challenging Nvidia, which controls more than 90% of the GPU market, AMD will inevitably reach out to Samsung.
An industry insider said, “Given that TSMC’s production lines are fully operational producing Nvidia GPUs, it’s likely that AMD will also place orders with Samsung. The fact that AMD and Samsung have collaborated on Samsung’s Exynos application processor suggests that collaboration between the two could become more active in the future.”
Another appealing factor is that Samsung Electronics is constructing a foundry plant in Taylor, Texas, in contrast to TSMC, and is expected to start 4-nm mass production from the end of next year. TSMC has postponed semiconductor production at its first Arizona factory, originally scheduled for operation next year, to 2025, one year later than initially planned, due to a shortage of skilled labor. TSMC planned to produce 3.5-nm semiconductors from next year. But with the delay in production plans, some companies, including Apple, which intended to secure semiconductors from here, have run into problems securing parts. Samsung Electronics, which already built a foundry factory in Austin, Texas, 20 years ago and secured sufficient skilled labor locally, is viewed as having the upper hand.
An industry insider said, “Samsung’s production capacity is still only about a third of TSMC’s, so it won’t be easy to attract all big tech customers just because TSMC has temporarily postponed the construction of its U.S. factory. However, starting mass production earlier than TSMC could be advantageous in improving yield, which could somewhat facilitate bringing back Nvidia and Qualcomm, which had left for TSMC.”