Samsung Foundry’s new manager plans to improve conditions

Perhaps one of the most obvious things that can indicate your success is the numbers and output of your work. Accordingly, it must be said that Samsung Foundry is not performing brilliantly. That is why changes have been made to its structure, and now the new Samsung Foundry CEO’s plan is to improve the situation to better compete with TSMC and increase the gap with SMIC.

Samsung’s New Foundry CEO
It is not bad to know that TSMC, as the world’s leading chip foundry, has a 65% share of this market. Its key customers include Apple, Nvidia, MediaTek, Qualcomm and even Intel.

Meanwhile, Samsung Foundry has a market share of approximately 18%. This is good enough to take second place after TSMC, but its lead over the third-ranked foundry has decreased.

Despite its inability to obtain an extreme ultraviolet lithography machine (due to US and Dutch sanctions), Chinese foundry SMIC is in third place, trailing Samsung by just 3.3 percentage points in the third quarter of this year. This gap has narrowed from 5.8 percentage points in the previous quarter.

Although Samsung Foundry was the first to introduce Gate-all-around (GAA) transistors with a 3nm process, it has not seen much demand for its product. The technology reduces current leakage, resulting in chips with better performance and better energy efficiency.

Samsung Foundry’s main problem is its low production yield, which means that the chips produced from silicon wafers are not sufficiently usable.

This increases the cost of chips for customers as more wafers are needed to produce the ordered chip. Samsung Foundry’s 2nm process yields have been reported to be in the 20-30% range, while TSMC’s experiments with the same process have been in the 60% range. It’s not bad to know that yields near 70% are typically required to start mass production.

Samsung has named Han Jin-man as its new foundry chief. He has a “two-pronged strategy” to help Samsung Foundry close the gap with TSMC and move closer to SMIC.

His plan is to increase Samsung Foundry’s efficiency in its 2nm production. That sounds easier said than done, and he says higher efficiency could bring customers back to Samsung. He also says he will secure more orders for older 10nm and above processes to ensure that factories are running closer to full capacity.

While it sounds like a plan, it’s unclear whether either part of it can be implemented. And even if both parts can be implemented, it’s still unclear whether the plan can save Samsung Foundry.

What do you think? Do you think the Koreans can compete well against the Taiwanese and Chinese?