Nvidia CEO Jensen Huang speaks at SIGGRAPH 2024 in Denver, July 29. AP-Yonhap
Nvidia CEO hints at switching suppliers from TSMC
By Nam Hyun-woo
Samsung Electronics faces an pressing want to reinforce its foundry manufacturing yield for synthetic intelligence (AI) processors as Nvidia has urged the potential of shifting orders away from Taiwan’s TSMC, citing sustained sturdy demand for its chipsets.
Throughout a Goldman Sachs know-how convention in San Francisco, Wednesday (native time), Nvidia CEO Jensen Huang advised the viewers that TSMC’s “agility and their functionality to reply to our wants is simply unbelievable,” however “if essential, after all, we will at all times deliver up others.”
Shrugging off considerations about AI chip demand, Huang stated demand for Nvidia’s Blackwell chips is “so nice,” and that Nvidia’s suppliers are doing their greatest to maintain up with it.
On the similar time, he famous that Nvidia might swap suppliers if essential, attributable to considerations like rising geopolitical tensions in Taiwan. Nevertheless, he warned that such a change would possibly “lead to lower-quality merchandise.”
Nvidia is outsourcing the bodily manufacturing of most of its superior AI processors to the world’s largest foundry, TSMC, quite than to different foundries, together with the second-largest, Samsung Electronics.
Final yr, Samsung’s foundry secured Nvidia’s orders for 8-nanometer-based chips just like the Tegra for cars and the RTX-3000 graphics processing unit (GPU) in 2020. Nevertheless, it has not been profitable in securing orders for extra superior AI processors, such because the H sequence or Blackwell, which require extra superior manufacturing processes.
Samsung Electronics’ Pyeongtaek Campus in Gyeonggi Province / Courtesy of Samsung Electronics
The query, as Huang famous, is the standard. Samsung’s foundry is scrambling to enhance its manufacturing yield, which refers back to the ratio of fine and error-free items to the overall variety of items produced. However the quantity isn’t bettering as quick as Samsung hopes.
Samsung’s foundry struggled with a 3-nanometer course of yield that remained within the single digits till the primary quarter of this yr, leading to delays in supplying engineering samples for its personal Exynos 2500 chipsets.
Home analysts assume that Samsung managed to enhance the yield to just about 20 % within the second quarter, however that is nonetheless inadequate for mass manufacturing, which requires a yield of at the very least 60 %.
In opposition to this backdrop, Samsung seems to be struggling to safe foundry orders. Based on business officers, the corporate has just lately adjusted its plans for putting in gear in its latest fab, P4 in Pyeongtaek, Gyeonggi Province, to prioritize the manufacturing of superior DRAM reminiscence, similar to high-bandwidth reminiscence (HBM) chips, first.
The fab was initially scheduled to start out with gear set up for NAND, adopted by foundry after which DRAM merchandise. Nevertheless, this order has been altered attributable to sluggish foundry orders. There are rumors that Samsung could determine to make use of P4 solely for manufacturing reminiscence chips, given the steady demand for high-bandwidth reminiscence (HBM) and different superior reminiscence merchandise utilized in AI servers.
On this context, Samsung’s funding in its plant in Taylor, Texas, is dealing with questions. The corporate initially deliberate to make use of the plant to mass produce 4-nanometer chips beginning subsequent yr, however has postponed this plan till 2026. Whereas the yield for the 4-nanometer course of is reportedly steady, Samsung is struggling to safe orders from fabless corporations.
Because of this, there may be additionally hypothesis that Samsung would possibly shift its focus to 2-nanometer chips as a substitute of 4-nanometer ones to safe orders for extra superior merchandise sooner or later. Nevertheless, experiences point out that the corporate can be dealing with challenges in bettering the manufacturing yield for the 2-nanometer course of, in addition to the 3-nanometer course of.
“One of many core causes of Samsung foundry’s cumulative losses is the low yield,” a semiconductor business official stated. “The corporate managed to stabilize its yield for the 4-nanometer course of, however has not carried out that but in additional superior processes, similar to second technology 3-nanometer or 2-nanometer processes.”
Samsung doesn’t disclose the separate earnings of its foundry enterprise, however market observers estimate that the corporate has incurred roughly 1.5 trillion received ($1.12 billion) in working losses through the first half of this yr.
“Samsung’s achievements within the HBM enterprise nonetheless falls in need of what ought to be anticipated from a model like Samsung, and its foundry division continues to be fighting losses,” Eugene Funding & Securities analyst Lee Seung-woo stated. “Because of this, the working revenue for Samsung’s semiconductor enterprise within the third quarter of this yr is predicted to say no to five.5 trillion received.”
