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Samsung announced the successful mass production of 3nm on the last day of June. Although the outside world has long known that Samsung can successfully mass produce 3nm, they are still surprised that they are one step ahead of TSMC. After all, TSMC used to lead Samsung in mass-producing advanced process chips.
However, Samsung cannot be too happy yet. 3nm has successfully mass-produced, but does it really have customers? How will Samsung handle the 3nm production line without customer support?
Samsung 3nm customers have doubts
TSMC, Samsung competes with each other for advanced processes, and has successively achieved breakthroughs in 7nm, 5nm, and 4nm chip processes. Through hundreds of billions of dollars of investment, we have established a solid chip manufacturing system and received order support from global customers.
TSMC and Samsung, in addition to competing for advanced manufacturing processes, actually also need to win the favor of customers. In contrast, TSMC has no shortage of customer orders, with a steady stream of orders pouring into its production lines for both its 7nm and 5nm processes.
These two processes currently contribute half of TSMC's revenue, which is enough to show how much customers are pursuing TSMC's advanced process technology . On the contrary, Samsung's customer orders appear to be limited and declining. If and Qualcomm had not handed over the Snapdragon processor to Samsung, the production line might not have much time to operate 24 hours a day.
TSMC’s production lines keep working 24 hours a day, and are fully loaded when demand for production capacity is strongest.
Before TSMC breaks through a process technology, it will receive preemptive bookings of production capacity from customers. It is reported that customers such as apple , Intel , AMD and other customers have already booked TSMC's 3nm production capacity, and will be able to ship soon after TSMC enters 3nm mass production. But Samsung's 3nm customers have great doubts.
Although Samsung is the first to achieve 3nm mass production, does it really have customers? According to news from the industry, Samsung’s 3nm’s first customer is a Chinese Bitcoin mining chip manufacturer named Shanghai Pansilicon Semiconductor Co., Ltd.
The company's business scope includes integrated circuit research and development. But the actual business may have something to do with cryptocurrency. The use of Samsung’s 3nm is probably to build a better “mining machine.”
Anyone who understands this thing knows that some cryptocurrency markets, including Bitcoin, are highly volatile. From a long-term perspective, it is difficult for Samsung to obtain long-term 3nm foundry returns from this customer.
If this company cannot become a long-term customer of Samsung 3nm, what about Qualcomm? Qualcomm has been cooperating with Samsung for many years, and both 5nm and 4nm chips have been manufactured by Samsung.
The situation has changed. Some analysts pointed out that Qualcomm will switch its flagship chips to TSMC from 2023 to 2024, and Samsung will be abandoned. Most of the chips Qualcomm needs to OEM from 2023 to 2024 are 3nm. TSMC will be able to produce 3nm in the second half of this year, so it will have the conditions to OEM 3nm chips for Qualcomm by then.
There are only a few customers who are more likely to cooperate with Samsung OEM for 3nm. After all, not all chip manufacturers are capable of designing 3nm chips. Capable large-scale chip design manufacturers are included in TSMC, and small and medium-sized chip design companies have no need for 3nm foundry.
There are great variables in the "mining companies" themselves, and Qualcomm wants to switch to TSMC. Therefore, it is still unknown whether Samsung can find 3nm customers to cooperate with.
How will Samsung handle the 3nm production line if it lacks customer support?
Samsung is very aware of the gap with TSMC. Because the 4nm yield rate is too low, Qualcomm handed over the Snapdragon 8Gen1 plus order that should have belonged to Samsung to TSMC. There is no accurate answer as to whether we can continue to cooperate with 3nm in the future.
In order to solve the problem of yield rate, Samsung changed its senior management and conducted an internal investigation on the funds used to improve the yield rate to see if the money was used for actual purposes.
After making these preparations, Samsung announced with a high profile the successful mass production of 3nm, using the GAA process to increase performance by 23% and reduce power consumption by 45%.
But after a burst of cheers, Samsung had to face the reality of customer resources. If there is a lack of customer support, what will Samsung do with the 3nm production line? Could it be that all that investment was in vain?
Assuming that Samsung does not have customers placing orders for 3nm in the future, Samsung will most likely produce 3nm chips for itself. Perhaps many people don't know that Samsung is also the world's leading chip designer and can design and manufacture its own chips.
Samsung's self-developed chip series is called "Orion". In 2020, it used its own 5nm process to produce the Orion Exynos 1080.
Since then, Samsung has not further produced 4nm Orion chips, mainly purchasing Qualcomm's Snapdragon processors. According to market demand, the chips equipped with Samsung smartphones are divided into two versions: Orion and Snapdragon .
The reputation of Snapdragon processors will be even better, which led Samsung to reduce the production proportion of Orion chips. If 3nm really doesn’t have too much customer support, Samsung will probably switch to its own Orion chip production to avoid wasting huge investments.
Of course, this is just a possibility in the future. Samsung is also the world's second largest chip manufacturer. It depends on whether Samsung can solve the yield problem and receive the support of corresponding customers.
Summary
Samsung mass-produced 3nm faster than TSMC, which attracted the attention of the global semiconductor industry. This means that Samsung has more time to increase production capacity and stabilize yield rates. As for how much customer support it can receive, Samsung needs to control it itself.
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