Samsung’s Foundry Business Reached $20 Billion In Sales Last Year, And Is Making Accelerated Attempts To Catch Up To TSMC

Samsung experienced one of the worst financial quarters for any technology giant, reporting a miserable 96 percent drop in operating profit compared to the same period in 2022. However, where the Korean giant has been forced to cut memory chip production, its foundry business has been doing somewhat better, generating $20 billion so far. As Samsung prepares to churn out more cutting-edge wafers, it can mean taking the fight directly to TSMC and taking some of that market share away.

Samsung established its foundry business just five years ago

Last year, Samsung’s foundry brought in around $7.2 billion in chip sales, according to market research firm Omdia. Despite being inferior to TSMC’s manufacturing processes, generating billions after just half a decade is a raving accomplishment for the company, and it is likely that the competition will get more heated as both foundries race to develop next-generation technology for a variety of applications.

Samsung’s foundry business could have crossed the $20 billion sales mark in 2022 if Qualcomm did not jump ship to TSMC for its 4nm node, but that was due to unfavorable yields and disappointing performance results from Samsung’s own 4nm variant. Fortunately, the company is said to have bounced back this year and is said to have developed a new 4nm process dubbed 4LPP that is strong on both power efficiency and performance. However, there is other positive news for Samsung too.

The manufacturer is said to be mass producing 4LPP+ wafers, which are rumored to be reserved for the upcoming Exynos 2400. The 4LPP+ process is a step up compared to 4LPP, possibly attracting major clients such as AMD. However, Samsung likely wants to secure customers for its most advanced manufacturing process to date; 3nm GAA. As TSMC reportedly struggles to meet chip demand for Apple, Samsung is in a strong position to dictate its 3nm GAA node, which it announced last year.

Unfortunately, there have not been any recent reports where Samsung is said to have interested entities in its 3nm GAA process, though during its previous earnings call, the company did state that yields were stable, and mass production was already underway. For obvious reasons, the names of its potential customers were not listed, but we may hear positive news disseminating in the second half of 2023. While we do not expect the likes of Apple to switch foundries, Samsung could appease lost names like Qualcomm and others in the future.

Written by Omar Sohail