Overview of Samsung’s Recent Challenges
Samsung’s foundry plans have encountered significant obstacles as the company has informed its workforce at the Taylor, Texas facility of temporary layoffs. This comes amid ongoing difficulties with 2 nm semiconductor yields, leading to a postponement of mass production timelines from late 2024 to 2026. The Taylor site was initially anticipated to serve as the cornerstone for Samsung’s sub-4 nm production capabilities.
Impact of Yield Issues on Market Position
Despite making rapid advances in process development, Samsung is struggling to achieve satisfactory yield rates for its advanced nodes. Current yields for sub-3 nm processes hover around 50%, while the gate-all-around (GAA) technology yields are alarmingly low, ranging from only 10% to 20%. In contrast, competitors like TSMC demonstrate considerably higher efficiencies, boasting yields between 60% and 70% for similar nodes. These discrepancies not only impede production but also widen the gap in market share, with TSMC commanding 62.3% of the global foundry market compared to Samsung’s mere 11.5% in Q2.
Future Implications and Potential Subsidy Risks
The challenges faced by Samsung’s foundry operations extend beyond production delays. Chairman Lee Jae-yong has actively sought to address these yield complications, including visits to major component suppliers such as ASML and Zeiss. However, the ongoing yield issues jeopardize Samsung’s eligibility for significant subsidies under the U.S. CHIPS Act, which hinge on meeting specific operational milestones. As the company navigates these setbacks, its ability to capture market share remains under threat, potentially impacting its long-term strategy in the highly competitive semiconductor landscape.
