Stunning rumor has Qualcomm moving Snapdragon production to Samsung Foundry from TSMC
With Samsung Foundry working diligently to correct the problems it has suffered with low yields for years, a report published today says that the world's leading foundry, TSMC, is about to lose some 2nm business to Samsung. This would be something of a payback for Samsung Foundry which lost a huge chunk of change when its poor yields led Qualcomm to shift Snapdragon 8 Gen 1 production to TSMC. Qualcomm continues to use TSMC to build its flagship Snapdragon 8 application processors.
A foundry's yield is the percentage of usable chips that are diced from a silicon wafer. Typically, a 70% yield is good enough for mass production. In 2nm test runs, TSMC has had a 60% yield. Still, the rumor mill says that Nvidia and Qualcomm are considering switching to Samsung Foundry from TSMC. High costs and limited capacity are two reasons given for this possible move.
TSMC is supposedly hiking prices for advanced chips by 5% to 10% this year. In addition, the foundry is supposedly raising the cost of silicon wafers for 2nm by 50% to $30,000. These higher prices could lead some TSMC clients to switch to Samsung Foundry. On the other hand, using a foundry with low yields like means that it will take more silicon wafers to build the number of chips needed and that could also jack up the cost to Samsung foundry clients significantly.
More likely, TSMC's limited 2nm capacity could be the biggest issue as its largest client, Apple, has reportedly reserved most of TSMC's initial 2nm capacity. TSMC, which had a leading 64.9% share in the global semiconductor foundry market as of 2024's third quarter, plans on increasing its 2nm capacity sharply in 2026. The contract foundry, which builds chips for fabless semiconductor designers, plans to increase its 2nm capacity from 10,000 wafers during trial production to 80,000 wafers per month in 2026.
Samsung Foundry could be facing its last shot to remain a viable business for Samsung. | Image credit-Samsung Foundry
Despite earlier rumors suggesting that Apple would use TSMC's 2nm node for the A19 and A19 Pro chipsets that will power next year's iPhone 17 line, it now seems that the A19 and A19 Pro will be produced using TSMC's third-generation 3nm node (N3P). Higher costs might have convinced Apple to wait for the A20 and A20 Pro before utilizing TSMC's 2nm process node. The A20 and A20 Pro will be powering the iPhone 18 series in 2026.
South Korea's Chosun Daily says that attracting new 2nm business might be Samsung Foundry's last chance to continue operations. The foundry is running multi-billion dollar losses, is way behind TSMC in market share, and Samsung might be looking to stem the ocean-sized flow of red ink.
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