TSMC Loses Qualcomm 2nm Chip Production to Samsung, Aiming to Reduce Costs and Resolve Manufacturing Challenges

Samsung has recently made notable strides in reclaiming its position in the semiconductor industry, especially after losing significant market share to TSMC due to previously inadequate management and yield ratios. Reports suggest that Samsung is set to capture TSMC’s 2nm chip business, largely prompted by Qualcomm’s interest in transitioning production to Samsung. Additionally, Apple has opted for 3nm chips for its iPhone 17 Pro, attributing this decision to escalating production costs and supply challenges that have impacted Qualcomm’s plans as well. This scenario highlights a shifting landscape in chip manufacturing as top tech companies seek more competitive and reliable sources.

Qualcomm’s Strategic Shift to Samsung for 2nm Chips

As TSMC contemplates raising prices on its advanced chips by 5 to 10 percent, many clients are now considering switching to Samsung for 2nm chips. This is primarily due to TSMC’s higher costs and constrained production capacities. However, it remains crucial to observe how Samsung will navigate the challenges associated with its lower yield ratios. Qualcomm aims to secure more economical 2nm chips, which would not only benefit its operations but also enable Samsung to restore its former status in the chip market (TrendForce).

The migration of Qualcomm to Samsung’s Foundry can also be attributed to Apple, TSMC’s largest client, having booked the entirety of TSMC’s 2nm production capacity for its needs. This gives Apple a competitive edge, although they too face delays, as the iPhone 17 Pro models will utilize the 3nm N3P process instead of the unavailable 2nm chips.

TSMC’s Production Plans and Market Position

In the interim, TSMC is set to expand its production capabilities substantially by 2026. Holding a commanding 64.9 percent share of the global semiconductor foundry market as of 2024, TSMC’s position may decline if it does not address ongoing issues concerning production costs and capacity limitations. Anticipations suggest an escalation in 2nm production from 10,000 to 80,000 wafers per month during trial runs in 2026, which may restore their competitive edge.

Looking ahead, Apple is likely to incorporate TSMC’s 2nm chips in its 2026 iPhone 18 Pro models, leveraging the N3P process to enhance performance and energy efficiency. Conversely, Qualcomm’s partnership with Samsung will facilitate the manufacturing of the upcoming Snapdragon 8 Elite series chips. Although details remain limited, it is expected that Samsung will refine its yield efficiencies and cost management, providing Qualcomm with a reliable alternative to TSMC, thereby fostering healthy market competition and potentially stabilizing prices.

The Future of Samsung in Chip Manufacturing

According to South Korea’s Chosun Daily, Samsung faces a pivotal moment in its quest to attract clients for its 2nm business. With substantial financial losses already incurred, the company’s ability to regain traction in the semiconductor landscape hinges on its performance in upcoming partnerships. As Qualcomm shifts its focus from TSMC to Samsung Foundry, it remains to be seen how these developments will unfold—stay tuned for further updates on the evolving dynamics between these tech giants.

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