Samsung has a history of having trouble producing flagship smartphone chipsets that are competitive. In recent years, the company has struggled to compete head-to-head with its fiercest rival, TSMC, in the foundry market. Investors in Samsung are concerned that the company is losing control of the semiconductor market and could fall further behind TSMC in the years to come.
SAMSUNG IS DEFAULTING IN THE SEMICONDUCTOR MARKET COMPETITION. Investors, staff members, and experts have reportedly warned Samsung that it is losing its technological edge in the foundry market, according to Financial Times . Earlier last year, the company lost two significant clients to TSMC: Qualcomm and Nvidia. Due to its low yield rates, it was apparently unable to deliver 4nm and 5nm chips consistently. According to earlier sources, the yield rate for the Snapdragon 8 Gen 1 was only 35%. This indicates that only 35 of every 100 manufactured chips pass the quality inspection. In contrast, TSMC had a yield rate for the identical chipset of 70%, which was twice as high as Samsung’s.
It makes sense that TSMC earned a staggering 54 percent of the foundry market in Q1 2022. The amount exceeds Samsung’s market share by more than three times. Investors are worried that internal problems are to blame for the Korean companies’ failures in this industry. They are criticizing Lee Jae-yong, the company’s vice chair and de facto boss. According to reports, Samsung has prioritized quick development and cost reductions over quality and creativity under his administration.
Advertisement Samsung’s risk-averse culture has gotten worse under Lee Jae-leadership, yong’s with engineers avoiding new attempts at innovation, according to an industry expert. Designing their own semiconductors demands imagination and engineering prowess.
The most prolific manufacturer of memory chips is Samsung. However, the foundry segment’s difficulties are apparent. Its fabrication chip technology has also shown to be inferior to that of TSMC, not simply in yield rates. The latest chips have superior thermal control and are more power-efficient. The narrative over the previous few years has been this. Investors would eventually start blaming it, so it was only a matter of time.
Employees at Samsung are also questioning the leadership group. Employees at Samsung are also challenging the leadership of the company, in addition to investors. According to the current allegation, a junior engineer on the company’s semiconductor technology development team recently stated that researchers are under extreme time pressure and given unachievable goals for developing new technologies and products.
Advertisement In a letter to Samsung’s leadership, the engineer claimed that it appears that the senior decision-maker is unable to understand the underlying source of the issues. I’ve heard many tales of crises, but I believe that the current situation is riskier than ever.
As Samsung’s business units begin blaming one another, these internal problems are getting worse. Due to the performance disadvantage compared to Qualcomm solutions, the mobile division has restricted the use of internal Exynos processors. The Galaxy S23 flagships of the upcoming generation will exclusively have Snapdragon processors. As a result, next year may see a further drop in the Korean company’s market share for processors. Since 2019, its share has practically decreased. Last year, it barely took 6.6% of the market. With a share of 37.7%, Qualcomm led the table, followed by MediaTek (26.3%) and Apple (26 percent).
In the foundry industry, Samsung announced a $150 billion investment last year. President Joe Biden personally urged the business to increase production in the US, and as a result, it is constructing additional chip factories there. As gaming-related tensions with China increase, he wants to lessen his reliance on Taiwanese companies. Earlier this year, Biden started his trip to South Korea at a Samsung semiconductor factory in Pyeongtaek. The Korean titan’s ability to revive its foundry industry in the near future is still unknown.