Samsung 4nm Breakthrough Paves Way For AI Chip Expansion

Samsung 4nm

According to reports, Samsung Foundry has made significant improvements in its Samsung 4nm process yield rate and has secured an AI chip foundry order from a major data center client. However, the semiconductor sector’s recovery is slower than expected, and the overall demand momentum and economic visibility for the second half of 2023 are unclear.

Significance of Samsung’s enhanced 4nm yield

The sources state that the increased Samsung 4nm process yield at Samsung Foundry has a number of significant ramifications.

The primary consequence is that it makes Samsung more competitive with TSMC for orders for AI chip foundries. Orders for high-end GPU-related AI chips that were obtained by TSMC from significant companies such as Nvidia and AMD were previously out of Samsung Foundry’s reach. Samsung may now be able to manufacture these cutting-edge chips with greater efficiency and dependability, which would make them a more appealing choice for prospective customers, according to the claimed increase in the Samsung 4nm yield rate to 75%.

Second, a significant data center client has probably ordered Samsung’s AI chips as a result of this enhancement; AMD was cited as a potential customer. This suggests that major companies in the market for Artificial Intelligence chips are recognising the increased yield rate and that it is resulting in real financial benefits.

Even if this development is a good thing, it is crucial to remember that it does not, at least not immediately, ensure that TSMC will lose all of its orders to Samsung. The source indicates that because AMD depends on TSMC’s cutting-edge process technology for manufacturing CPUs, it is doubtful that AMD would move CPU orders from TSMC to Samsung.

However, the increased Samsung 4nm yield may have strategic value. In order to exert pressure on Nvidia, the source said AMD may think about shifting further orders to Samsung, particularly because TSMC is now giving priority to increasing production in order to satisfy Nvidia’s demands. Given their increased output, Samsung may be positioned as a viable strategic option for businesses wishing to push their main foundry partner or diversify their supply chain.

According to the insiders, Samsung may not be able to successfully compete with TSMC in the production of high-end AI GPU and HPC chips only by enhancing its Samsung 4nm process and HBM capacity. Advanced back-end packing seems to be the main constraint. According to the source, Samsung’s success will rely on its capacity to offer competitive 2.5D or 3D packaging solutions or form alliances with top-tier OSAT businesses. TSMC’s CoWoS technology is highly valued throughout this process.

In the competitive AI High-Performance Computing industry, Samsung can only fully utilise the promise of its upgraded Samsung 4nm technology by acquiring adequate advanced packaging capacity. In order for Samsung Foundry to successfully compete with TSMC in this market, it is still imperative that the advanced packaging problem be resolved, even if the increased 4nm yield is an important advancement.

Describe why AMD now relies on TSMC for its CPUs

AMD presently uses TSMC’s cutting-edge process technology for its CPUs, according to the sources cited. Because of this dependence, the sources make it clear that AMD is unlikely to move CPU orders from TSMC to Samsung in the near future.
This implies that TSMC’s production procedures and AMD’s CPU designs have a well-established technological reliance. AMD’s CPU designs have probably been tuned to match the unique process nodes and manufacturing methods used by TSMC. This optimization may take into account elements like:

Libraries and Design Guidelines

AMD’s CPU designs most likely draw on TSMC’s standard cell libraries and design guidelines, which are adapted for their cutting-edge process technologies.

Process Improvements

Engineers from AMD and TSMC probably work closely together to optimize the manufacturing process for AMD’s particular CPU designs in order to achieve the required yield, performance, and power efficiency.

Developed Ecosystem

The AMD-TSMC cooperation for CPU manufacture has probably grown into a sophisticated ecosystem of tools, knowledge, and experience over time, making a rapid switch to a new foundry for this important product line difficult and possibly disruptive.

The established and probably closely interwoven connection with TSMC for CPU manufacture makes a change unlikely in the near future, even though Samsung Foundry has improved its Samsung 4nm process yield and AMD may strategically explore Samsung for other sorts of chips, such as Artificial Intelligence accelerators. This dependence highlights how intricate and long-term foundry collaborations are in the semiconductor sector.