Samsung is facing significant challenges in its semiconductor manufacturing, struggling to compete with its primary rival, TSMC. This performance issue has led to the loss of one of its major revenue sources, Qualcomm. Here’s a detailed look at the situation:
Samsung’s Struggles with 3nm Process
- 3nm Transition Issues: Samsung has not achieved the desired performance and efficiency with its transition to the 3nm manufacturing process. The company is now aiming to improve these aspects with the second-generation 3nm GAA (Gate-All-Around) process in the second half of this year.
- Qualcomm’s Shift to TSMC: Due to these shortcomings, Qualcomm, which was one of Samsung’s top five revenue sources, has shifted most of its orders to TSMC. TSMC has proven its reliability and efficiency with its 3nm and 4nm processes, making it a more attractive partner for Qualcomm.
Impact on Samsung’s Revenue
- Loss of a Major Client: Qualcomm’s departure is a significant blow, as it was one of the major contributors to Samsung’s revenue. This change is evident in the latest report where Qualcomm did not appear in the list of top revenue sources for the first time since 2021.
- Current Major Clients: As of May 16, Samsung’s largest revenue source is ironically Apple, followed by Deutsche Telekom, Hong Kong Techtronics, Supreme Electronics, and Verizon. These five companies collectively account for 13% of Samsung’s total revenue.
Future Prospects and Developments
- Second-Generation 3nm GAA: Samsung is focusing on the second-generation 3nm GAA process to potentially win back Qualcomm and other clients. However, it remains to be seen if these efforts will be successful.
- 2nm GAA Technology: Samsung is also working on 2nm GAA technology, although its current status and the potential benefits are unclear. Reports suggest that Apple has visited TSMC to secure priority in their 2nm process, which could influence Qualcomm’s future decisions.
Industry Dynamics
- TSMC’s Dominance: TSMC’s ability to consistently deliver high efficiency and reliability in semiconductor manufacturing places it in a dominant position. This has allowed TSMC to attract major clients like Qualcomm and potentially Apple for future processes.
- Samsung’s Competitive Strategy: To regain competitiveness, Samsung needs to demonstrate substantial improvements in its semiconductor processes. Successfully developing and implementing second-generation 3nm and future 2nm technologies will be crucial for Samsung to regain lost ground.
Conclusion
Samsung’s loss of Qualcomm as a major revenue source highlights the intense competition and high stakes in the semiconductor industry. As Samsung works on advancing its technology, the company’s ability to innovate and improve will determine its future success and ability to attract and retain key clients.
