In the dynamic semiconductor landscape, rumors are swirling about Qualcomm potentially moving its Snapdragon chip production from TSMC to Samsung Foundry. This speculation emerges as Samsung Foundry works to rectify its historical issues related to low production yields, a challenge that has long plagued the company.
The yield—a crucial metric that indicates the percentage of functional chips derived from a silicon wafer—plays a significant role in chip manufacturing. Typically, a yield of 70% is considered adequate for mass production; however, TSMC's yield during its recent 2nm test runs was reported at a mere 60%. Despite these challenges, Qualcomm, alongside Nvidia, is reportedly considering making a strategic switch due to escalating costs and limited production capacity at TSMC.
Recent reports suggest TSMC is planning to increase prices for advanced chips by 5% to 10% this year, with an even steeper hike of 50% for the cost of silicon wafers used in 2nm production, bringing the price to $30,000. Such increases could prompt some clients to explore more cost-effective options with Samsung Foundry. However, the decision is not without risks; Samsung's historically low yields could mean that manufacturers may need more silicon wafers to achieve their desired production volumes, potentially leading to significant cost increments for their clients.
TSMC's constrained capacity for 2nm chips is also a critical factor, particularly as it caters to significant clients like Apple, which further complicates the decision for companies like Qualcomm. Meanwhile, the South Korean outlet Chosun Daily highlights that Samsung Foundry could be on the precipice of a pivotal moment—attracting new 2nm business could be essential for its viability, as it faces considerable multi-billion dollar losses and an uphill struggle to catch up with TSMC's dominating market share.
