Samsung Foundry Unable to Secure Crucial Orders from AMD Amidst Worsening Financial Situation

Samsung Foundry was able to get orders from AMD to produce solely those APUs and GPUs based on the 14nm manufacturing technology, according to a recent report from DigiTimes. The South Korean corporation was unable to get orders from AMD to produce Zen 3, Zen 3+, and Zen 4 processors, which are AMD’s most sophisticated CPUs based on 5nm, 6nm, and 7nm production techniques.

According to reports, TSMC and GlobalFoundries will produce the new AMD chips, at least until 2025, and will serve as the company’s principal suppliers for the next three years. Samsung can produce semiconductors in the 4nm, 3nm, and even 5nm processes. Samsung’s 4nm and 5nm circuits, however, are thought to be less effective than those created by TSMC. That could be one of the factors in AMD’s decision to produce its new chips with TSMC (and GF). But it’s still unclear what specifically Samsung did wrong to lose the order. 

Samsung Foundry Under Immense Pressure Following Decline in Company’s Profits

Samsung is now going through a difficult phase. Operating profit for the firm fell to an eight-year low in Q4 2022, and Samsung anticipates that its semiconductor division will generate greater profit in 2023, which will be halved from that of 2022. Due to the increased costs of parts, the operational profit from smartphone sales has also decreased significantly and is predicted to do so further. The situation is made worse by AMD’s loss of the order for new processors.

Samsung’s profits over years | Image: Reuters

Samsung said that despite the uncertainty surrounding the outside variables that have led to a “possible global economic crisis,” this pattern is still evident. The decrease in sales also caused the average sales prices of the chips to drop to lower levels than anticipated. Despite all of these factors and circumstances, some experts believe that in 2024, the semiconductor industry may resume its upward trend. The only way for Samsung to get through these difficult times then is to enhance its process yield rates as well as offer high-volume production at a competitive price.

ABOUT THE AUTHOR

Muhammad Zuhair


Passionate about technology and gaming content, Zuhair focuses on analysing information and then presenting it to the audience.
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