nvidia and qualcomm eye samsung for 2nm chip production
Taipei, Wednesday, 1 January 2025.
Facing high costs and limited capacity from TSMC, NVIDIA and Qualcomm are considering Samsung as a partner for manufacturing 2nm chips. This move comes as both tech giants seek to diversify their supply chains. TSMC, currently leading in advanced chip production, has been a preferred supplier but its pricing and production limitations are pushing clients to explore alternatives. Samsung, although struggling with past production issues, is being eyed as a potential partner. Success in this endeavor could redefine Samsung’s position in the semiconductor market. This shift could also impact market dynamics and TSMC’s stock value. NVIDIA and Qualcomm’s exploration of Samsung’s capabilities highlights a significant trend in the semiconductor industry towards strategic partnerships to overcome production challenges. Samsung’s success in securing these partnerships may hinge on overcoming its reputation and proving its 2nm process capabilities.
Market implications and production capacity
TSMC currently leads the 2nm chip production race with a 60% yield rate and has entered client testing phases [1][3]. However, their production capacity remains limited at 10,000 wafers monthly, with plans to expand to 80,000 wafers by 2026 [1]. This capacity constraint, coupled with high pricing, has prompted major clients to explore alternatives. Apple has already postponed its 2nm chip production to 2026 due to TSMC’s costs [3].
Samsung’s opportunity and challenges
Samsung faces a critical moment in its semiconductor business. The company has secured orders from PFN Semiconductor but needs major clients like NVIDIA and Qualcomm to achieve profitability in its 2nm operations [1][3]. Samsung’s reputation suffered after previous issues with 4nm chips, which experienced overheating and performance problems [3]. The company’s semiconductor division faces additional pressure from declining DRAM and NAND prices [1].
Supply chain diversification strategy
NVIDIA and Qualcomm’s interest in Samsung stems from their desire to reduce dependence on TSMC and gain better negotiating power [1][3]. Both companies are currently testing Samsung’s 2nm process capabilities [1]. This potential partnership represents Samsung’s crucial opportunity to establish itself in the advanced chip manufacturing space [3], particularly as the company aims to enhance its semiconductor production capacity [5].