The second-biggest chipmaker in the world, Samsung Semiconductor, is vitally in hurtle to mass-produce cutting-edge 2nm processors. The company’s capacity to challenge market leader TSMC and recover market share may depend on how well it performs in this undertaking.
According to many familiar with the situation, Samsung Semiconductor competitiveness and profitability in the future are heavily dependent on its ability to succeed in this next-generation chip technology, predominantly focusing on 2nm processors.
Currently, TSMC holds a handsome 62% of the global semiconductor foundry industry, compared to only 11% for Samsung.
Samsung’s approach is focused on its process technologies for 2nm and lower. The company intends to establish new manufacturing lines at its Pyeongtaek and Hwaseong plants, as well as make significant investments in its fabrication facilities.
Following TSMC’s roadmap, mass manufacturing of 2nm chips is intended to be achieved by 2025, and 1.4nm devices by 2027. Samsung Semiconductor is actively seeking Qualcomm to be a crucial partner for its 2nm technology, as a result of the company gaining notable clients for its cutting-edge semiconductors.
Securing significant clients for its 2nm process will be one of the key elements in Samsung’s success. The business is in active talks with Qualcomm in the hopes that the US semiconductor manufacturer will select Samsung’s technology for its upcoming Snapdragon CPUs. Samsung may be able to draw in more clients and grow its foundry business considerably if it can establish these kinds of alliances.
At its plants in Pyeongtaek and Hwaseong, Samsung is heavily investing in new production lines in an effort to begin mass producing 2nm chips in 2025 and scale up to 1.4nm by 2027.
3nm Exynos Processor Still Faces Commercialization Hurdle
The road ahead for Samsung Semiconductor is not going to be a cake walk. The South-Korean chip giant has had hiccups in the past, like its 3nm Exynos processor’s delayed debut. Furthermore, rumors indicate that Qualcomm’s Snapdragon 8 Gen 4 will be included in the forthcoming Samsung Galaxy S25 series globally, indicating that Samsung might not be as confident in its own 3nm Exynos processors as it is in the Snapdragon substitute. In the meantime, the Galaxy Z Fold 7 and Flip 7, which are scheduled for release later in 2024, are anticipated to be powered by the Exynos 2500.
The Cost War
Recently, The Volt Post reported that the plan to start mass producing 2nm chips in 2025 is still on track, as TSMC is said to have started trial production of the chips at its Baoshan Plant in Hsinchu, northern Taiwan. The 2nm wafers are anticipated to cost twice as much as 4/5nm wafers, perhaps surpassing USD 30,000 per wafer.
Lower prices for customers may result from more competition if Samsung is able to catch up to TSMC. Additionally, it can make South Korea a more significant player in the growing decorated chip industry.
Development Cost for 28nm
As an illustration, the development cost for 28nm is approximately USD 50 million, whereas the potential expenditure for 16nm might reach USD 100 million. The R&D cost for 5nm has risen to USD 550 million when the costs of software verification, IP li